TRAVELERS SEPARATE ACCOUNT SEVEN FOR VARIABLE ANNUITIES, N-4/A, 1998-11-09

TRAVELERS SEPARATE ACCOUNT SEVEN FOR VARIABLE ANNUITIES
N-4/A, 1998-11-09

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<PAGE> 1
Registration Statement No. 333-60227
811-08909

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-4

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective No. 1

And

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Pre-Effective No. 1

THE TRAVELERS SEPARATE ACCOUNT SEVEN 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 Public Offering: As soon as practicable following
the 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 SEVEN 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 Not Applicable

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 in Statement of Additional
Information
----------------------------------

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 PREMIER ADVISERS -- ASSETMANAGER PROSPECTUS:

THE TRAVELERS SEPARATE ACCOUNT SEVEN
FOR VARIABLE ANNUITIES

This prospectus describes TRAVELERS PREMIER ADVISERS -- ASSETMANAGER, 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"). Travelers Premier Advisers -- Asset
Manager 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,
we refer to both Contracts and certificates as "Contracts."

Your purchase payments will accumulate on a fixed basis and/or a variable basis
depending on the investment options you select. You may direct your purchase
payments to the Fixed Account (funded through the Company's general account)
and/or to one or more of the sub-accounts ("funding options") of the Travelers
Separate Account Seven for Variable Annuities ("Separate Account"). Your
contract value will vary daily to reflect the investment experience of the
funding options you select and any interest credited to the Fixed Account. The
variable funding options are:

MORGAN STANLEY UNIVERSAL FUNDS, INC.:
Emerging Markets Equity Portfolio
Global Equity Portfolio
Mid Cap Value Portfolio
Value Portfolio
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.:
Salomon Brothers Variable Capital Fund
Salomon Brothers Variable High Yield Bond Fund
Salomon Brothers Variable Investors Fund
Salomon Brothers Variable Strategic Bond Fund

VAN KAMPEN LIFE INVESTMENT TRUST:
Domestic Income Portfolio
Emerging Growth Portfolio
Enterprise Portfolio
Government Portfolio
Growth and Income Portfolio
Money Market Portfolio
Morgan Stanley Real Estate Securities
Portfolio

The Fixed Account is described in Appendix A. Unless specified otherwise, this
prospectus refers to the variable funding options. 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 VARIABLE FUNDING
OPTIONS. READ AND RETAIN THEM FOR FUTURE REFERENCE.

This prospectus provides the information that you should know before investing
in the Contract. You can receive additional information about the Separate
Account by requesting a copy of the Statement of Additional Information ("SAI")
dated _______ , 1998. 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 Investor
Services, One Tower Square, Hartford, Connecticut 06183, call (800) 599-9460 or
access the SEC's website (http://www.sec.gov). See Appendix B for the SAI's
table of contents.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS PASSED UPON THE 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 _______ , 1998
<PAGE> 5

TABLE OF CONTENTS

<TABLE>
<S> <C>
INDEX OF SPECIAL TERMS................. 2
SUMMARY................................ 3
FEE TABLE.............................. 6
THE ANNUITY CONTRACT................... 8
Contract Owner Inquiries............... 8
Purchase Payments...................... 8
Accumulation Units..................... 8
The Funding Options.................... 8
CHARGES AND DEDUCTIONS................. 10
General................................ 10
Administrative Charges................. 10
Mortality and Expense Risk Charge...... 11
Funding Option Expenses................ 11
Premium Tax............................ 11
Changes in Taxes Based Upon Premium or
Value................................ 11
TRANSFERS.............................. 11
Dollar Cost Averaging.................. 12
ACCESS TO YOUR MONEY................... 12
Systematic Withdrawals................. 12
Loans.................................. 13
OWNERSHIP PROVISIONS................... 13
Types of Ownership..................... 13
Beneficiary............................ 13
Annuitant.............................. 13
DEATH BENEFIT.......................... 13
Death Proceeds Before the Maturity
Date................................. 14
Payment of Proceeds.................... 14
Death Proceeds After the Maturity
Date................................. 15
THE ANNUITY PERIOD..................... 15
Maturity Date.......................... 15
Allocation of Annuity.................. 15
Variable Annuity....................... 16
Fixed Annuity.......................... 16
PAYMENT OPTIONS........................ 16
Election of Options.................... 16
Annuity Options........................ 17
Income Options......................... 18
MISCELLANEOUS CONTRACT PROVISIONS...... 18
Right to Return........................ 18
Termination............................ 18
Required Reports....................... 18
Suspension of Payments................. 19
Transfers of Contract Values to Other
Annuities............................ 19
THE SEPARATE ACCOUNT................... 19
Performance Information................ 19
FEDERAL TAX CONSIDERATIONS............. 20
General Taxation of Annuities.......... 20
Types of Contracts: Qualified or
Nonqualified......................... 20
Nonqualified Annuity Contracts......... 20
Qualified Annuity Contracts............ 21
Penalty Tax for Premature
Distributions........................ 21
Diversification Requirements for
Variable Annuities................... 21
Ownership of the Investments........... 21
Mandatory Distributions for Qualified
Plans................................ 22
OTHER INFORMATION...................... 22
The Insurance Company.................. 22
Financial Statements................... 22
IMSA................................... 22
Year 2000 Compliance................... 23
Distribution of Variable Annuity
Contracts............................ 23
Conformity with State and Federal
Laws................................. 23
Voting Rights.......................... 23
Legal Proceedings And Opinions......... 24
APPENDIX A: The Fixed Account.......... 25
APPENDIX B: Contents of the Statement
of Additional Information............ 26
</TABLE>

INDEX OF SPECIAL TERMS

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

<TABLE>
<S> <C>
Accumulation Unit...................... 8
Accumulation Period.................... 8
Annuitant.............................. 13
Annuity Payments....................... 15
Annuity Unit........................... 16
Contract Date.......................... 8
Contract Owner (You, Your)............. 8
Contract Value......................... 8
Contract Year.......................... 8
Fixed Account.......................... 25
Funding Option(s)...................... 8
Income Payments........................ 15
Maturity Date.......................... 15
Purchase Payment....................... 8
Written Request........................ 8
</TABLE>

2
<PAGE> 6

SUMMARY:

TRAVELERS PREMIER ADVISERS -- ASSETMANAGER

THIS SUMMARY DETAILS SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD KNOW AND
CONSIDER BEFORE PURCHASING THE CONTRACT. PLEASE READ THE ENTIRE PROSPECTUS
CAREFULLY.

1. THE VARIABLE ANNUITY CONTRACT. The Contract is intended for retirement
savings or other long-term investment purposes. We may issue it 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, we refer to Contracts and certificates as
"Contracts." The Contract provides a choice of a standard or enhanced death
benefit as well as guaranteed income options. You direct your payment(s) to one
or more of the variable funding options and/or to the Fixed Account. We
guarantee money directed to the Fixed Account as to principal and interest. The
variable funding options are designed to produce a higher rate of return than
the Fixed Account; however, this is not guaranteed. You may also lose money in
the variable funding options.

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

2. ANNUITY PAYMENTS (THE INCOME PHASE). You may choose to receive annuity
payments from the Fixed Account or the variable funding options. If you want to
receive payments from your annuity, you can choose one of a number of annuity
options or income options.

Once you elect an annuity option or an income 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 variable 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
$20,000. You may make additional payments of at least $500 at any time during
the accumulation phase.

WHO SHOULD PURCHASE THIS CONTRACT? The Contract is currently available for use
in connection with (1) individual nonqualified purchases; (2) rollovers from
Individual Retirement Annuities (IRAs); and (3) rollovers from 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.

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

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
$75,000, the Company deducts an annual contract administrative charge of $50.
The subaccount administrative charge and the mortality and expense risk ("M&E")
charge are deducted from the amounts in the variable funding options. The

3
<PAGE> 7

subaccount charge is .15% annually. The annual M&E charge depends on the death
benefit you choose:

<TABLE>
<CAPTION>
CONTRACT YEARS 1-6 CONTRACT YEARS 7 AND LATER
------------------ --------------------------
<S> <C> <C>
Standard Death Benefit................... 1.45% 1.40%
Enhanced Death Benefit................... 1.60% 1.40%
</TABLE>

Each funding option has a charge for investment management and other expenses.
The charges, which vary by funding option, range from 0.60% to 1.75% annually,
of the average daily net asset balance of the funding option. Certain funding
options have fee reimbursement and/or fee waiver arrangements which serve to
reduce the charges shown. Please refer to the Fee Table for more details.

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 or income 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.

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. While there is no withdrawal charge, income taxes and a
penalty tax may apply to taxable amounts withdrawn.

8. PERFORMANCE. The value of the Contract will vary depending upon the
investment performance of the funding options you choose. Past performance is
not a guarantee of future results. The Separate Account is new, and therefore
has no past performance. However, the funding options have been available for
various time periods. Performance information that predates the separate account
is considered "nonstandard" by the SEC. Such nonstandard performance is shown in
the Statement of Additional Information that you may request free of charge.

9. DEATH BENEFIT. You may choose to purchase the Standard or the Enhanced Death
Benefit. The death benefit applies upon the first death of the owner, joint
owner, or annuitant. Assuming you are the Annuitant, the death benefit is as
follows: If you die before the Contract is in the income phase, the person you
have chosen as your beneficiary will receive a death benefit. The death benefit
paid depends on your age at the time of your death. 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. The enhanced death benefit may not be available in
all states. Certain states may have varying age requirements. Please refer to
the Death Benefit section in the prospectus for more details.

10. OTHER INFORMATION

RIGHT TO RETURN. If you cancel the Contract within twenty 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 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.

4
<PAGE> 8

TRANSFERS BETWEEN FUNDING OPTIONS. 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. You may transfer between the Fixed Account and the
funding options twice a year (during the 30 days after the six-month contract
date anniversary), provided the amount is not greater than 15% of the Fixed
Account Value on that date.

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

DOLLAR COST AVERAGING. This is a program that allows you to invest a fixed
amount of money in funding options each month, theoretically giving you a lower
average cost per unit over time than a single one-time purchase. Dollar Cost
Averaging requires regular investments regardless of fluctuating price levels,
and does not guarantee profits or prevent losses in a declining market.
Potential investors should consider their financial ability to continue
purchases through periods of low price levels.

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.

AUTOMATIC REBALANCING. You may elect to have the Company periodically
reallocate the values in your Contract to match your original (or your latest)
funding option allocation request.

5
<PAGE> 9

SEPARATE ACCOUNT SEVEN FEE TABLE
- --------------------------------------------------------------------------------

<TABLE>
<S> <C>
ANNUAL CONTRACT ADMINISTRATIVE CHARGE $50
(Waived if contract value is $75,000 or more)
</TABLE>

ANNUAL SEPARATE ACCOUNT CHARGES:
(as a percentage of the average daily net assets of the Separate Account)

<TABLE>
<CAPTION>
CONTRACT YEARS 1-6 CONTRACT YEARS 7 AND LATER
------------------ --------------------------
<S> <C> <C>
STANDARD DEATH BENEFIT
Mortality & Expense Risk Charge................ 1.45% 1.40%
Administrative Expense Charge.................. 0.15% 0.15%
---- ----
Total Separate Account Charges............. 1.60% 1.55%
ENHANCED DEATH BENEFIT
Mortality & Expense Risk Charge................ 1.60% 1.40%
Administrative Expense Charge.................. 0.15% 0.15%
---- ----
Total Separate Account Charges............. 1.75% 1.55%
</TABLE>

FUNDING OPTION EXPENSES:
(as a percentage of average daily net assets of the Funding Option as of
December 31, 1997, unless otherwise noted)

<TABLE>
<CAPTION>
TOTAL ANNUAL
MANAGEMENT OTHER OPERATING
FEE EXPENSES EXPENSES
(AFTER EXPENSES (AFTER EXPENSES (AFTER EXPENSES
PORTFOLIO NAME ARE REIMBURSED) ARE REIMBURSED) ARE REIMBURSED)
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MORGAN STANLEY UNIVERSAL FUNDS, INC.:
Emerging Markets Equity Portfolio.............. 0.00%(1) 1.75% 1.75%
Global Equity Portfolio........................ 0.00%(1) 1.15% 1.15%
Mid Cap Value Portfolio........................ 0.00%(1) 1.05% 1.05%
Value Portfolio................................ 0.00%(1) 0.85% 0.85%
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.:
Salomon Brothers Variable Investors Fund....... 0.70% 0.30%(2) 1.00%
Salomon Brothers Variable Capital Fund......... 0.85% 0.15%(2) 1.00%
Salomon Brothers Variable High Yield Bond Fund... 0.75% 0.25%(2) 1.00%
Salomon Brothers Variable Strategic Bond
Fund......................................... 0.75% 0.25%(2) 1.00%
VAN KAMPEN LIFE INVESTMENT TRUST:
Domestic Income Portfolio...................... 0.05%(3) 0.55% 0.60%
Emerging Growth Portfolio...................... 0.00%(3) 0.85% 0.85%
Enterprise Portfolio........................... 0.44%(3) 0.16% 0.60%
Government Portfolio........................... 0.36%(3) 0.24% 0.60%
Growth and Income Portfolio.................... 0.00%(3) 0.75% 0.75%
Money Market Portfolio......................... 0.12%(3) 0.48% 0.60%
Morgan Stanley Real Estate Securities
Portfolio.................................... 1.00%(3) 0.07% 1.07%
</TABLE>

NOTES:

(1) The Advisers, with respect to the Portfolios listed in the Morgan Stanley
Universal Funds, Inc. Series Trust, have voluntarily agreed to a reduction
in its management fees and to reimburse the Portfolios for which it acts as
investment adviser if such fees would cause total annual operating expenses
to exceed the amounts set forth in the tables above. Absent such reductions,
the expenses would have been as follows:

6
<PAGE> 10

(2) Reflects the voluntary agreement by Salomon Brothers Asset Management to
impose an expense cap for the fiscal year ending December 31, 1998 on the
total annual operating expenses of each fund at the amount shown in the
table through the reimbursement of expenses. Absent such agreement, the
ratio of other expenses and total operating expenses would be:

(3) Van Kampen has voluntarily agreed to a reduction in its management fees and
to reimburse the Portfolios for which it acts as investment adviser if such
fees would cause total annual operating expenses to exceed the amounts set
forth in the tables above. Absent such reductions, the expenses would have
been:

<TABLE>
<CAPTION>
TOTAL ANNUAL
MANAGEMENT OTHER OPERATING
PORTFOLIO FEES EXPENSES EXPENSES
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Domestic Income Portfolio...................... 0.50% 0.55% 1.05%
Enterprise Portfolio........................... 0.50% 0.16% 0.66%
Emerging Growth Portfolio...................... 0.70% 1.44% 2.14%
Government Portfolio........................... 0.50% 0.24% 0.74%
Growth and Income Portfolio.................... 0.60% 1.03% 1.63%
Morgan Stanley Real Estate Securities
Portfolio.................................... (no waiver) (no waiver) (no waiver)
Money Market Portfolio......................... 0.50% 0.48% 0.98%
</TABLE>

EXAMPLE*

Assuming a 5% annual return, a $1,000 investment would be subject to the
following expenses whether the Contract is surrendered, annuitized, or if no
withdrawals have been made:

<TABLE>
<CAPTION>
STANDARD DEATH BENEFIT ENHANCED DEATH BENEFIT
AT THE END OF THE PERIOD SHOWN AT THE END OF THE PERIOD SHOWN
- ------------------------------------------------------------------------------------------------------------------
PORTFOLIO NAME 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MORGAN STANLEY UNIVERSAL FUNDS,
INC.:
Emerging Markets Portfolio...... $34 $105 $178 $368 $36 $109 $185 $375
Global Equity Portfolio......... 28 87 149 312 30 92 156 320
Mid Cap Value Portfolio......... 27 84 144 303 29 89 151 310
Value Portfolio................. 25 78 134 283 27 83 141 291
SALOMON BROTHERS VARIABLE SERIES
FUNDS, INC.:
Variable Capital Fund........... 27 83 141 298 28 87 149 306
Variable High Yield Bond Fund... 27 83 141 298 28 87 149 306
Variable Investors Fund......... 27 83 141 298 28 87 149 306
Variable Strategic Bond Fund.... 27 83 141 298 28 87 149 306
VAN KAMPEN LIFE INVESTMENT TRUST:
Domestic Income Portfolio....... 23 71 121 258 24 75 129 266
Emerging Growth Portfolio....... 25 78 134 283 27 83 141 291
Enterprise Portfolio............ 23 71 121 258 24 75 129 266
Government Portfolio............ 23 71 121 258 24 75 129 266
Growth and Income Portfolio..... 24 75 129 273 26 80 136 281
Money Market Portfolio.......... 23 71 121 258 24 75 129 266
Morgan Stanley Real Estate
Securities Portfolio.......... 28 85 145 305 29 89 152 312
</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 ANNUAL CONTRACT ADMINISTRATIVE CHARGE AS AN ANNUAL CHARGE
OF .0006% OF ASSETS.

7
<PAGE> 11

THE ANNUITY CONTRACT
-------------------------------------------------------------------------------
Travelers Premier Advisers -- Asset Manager is a contract between the contract
owner ("you"), and Travelers Insurance Company (called "us" or the "Company").
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 or income
payments, beginning on a future date that you choose, the maturity date. The
purchase payments accumulate tax deferred in the funding options of your choice.
We offer multiple variable funding options, and one fixed account option. The
contract owner assumes the risk of gain or loss according to the performance of
the variable 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. The date the contract and
its benefits became effective is referred to as the contract date. Each 12-month
period following the 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.

CONTRACT OWNER INQUIRIES

Any questions you have about your Contract should be directed to the Company's
Home Office at 1-800-599-9460.

PURCHASE PAYMENTS

The initial purchase payment must be at least $20,000. You may make additional
payments of at least $500 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 in good order at our Home Office. 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 their values 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 its 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, we credit your Contract. The
period between the contract effective date and the maturity date is the
accumulation period. During the annuity period (i.e., after the maturity date),
you are credited with annuity units.

THE FUNDING OPTIONS

You choose which of the following variable funding options to have your purchase
payments allocated to. These funding options are subsections of the Separate
Account, which invest in the underlying mutual funds. 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. You
are not investing directly in the underlying mutual fund. Since each option has
varying degrees
8
<PAGE> 12

of risk, please read the prospectuses carefully before investing. Contact your
registered representative or call 1-800-599-9460 to request additional copies of
the prospectuses.

If any of the funding options becomes 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.

The current variable funding options are listed below, along with their
investment advisers and any subadviser:

<TABLE>
<CAPTION>
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FUNDING INVESTMENT INVESTMENT
OPTION OBJECTIVE ADVISER/SUBADVISER
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<S> <C> <C>
MORGAN STANLEY UNIVERSAL
FUNDS, INC.:
Emerging Markets Equity Seeks long-term capital appreciation by investing Morgan Stanley Asset
Portfolio primarily in equity securities of emerging market Management Inc. ("MSAM")
country issuers with a focus on those in which the
adviser believes the economies are developing strongly
and in which the markets are becoming more
sophisticated.
Global Equity Portfolio Seeks long-term capital appreciation by investing MSAM
primarily in equity securities of issuers throughout the
world, including the U.S.
Mid Cap Value Portfolio Seeks above-average total return over a market cycle of Miller Anderson &
three to five years by investing in common stock and Sherrerd, LLP ("MAS")
other equity securities of issuers with equity
capitalizations in the range of the companies
represented in the S&P Mid Cap 400 Index (currently $100
million to $8 billion).
Value Portfolio Seeks above-average total return over a market cycle of MAS
three to five years by investing primarily in a
diversified portfolio of common stocks and other equity
securities that the adviser believes to be relatively
undervalued based on various measures such as price
earnings ratios and price book ratios.
SALOMON BROTHERS VARIABLE
SERIES FUNDS, INC.:
Variable Capital Fund Capital appreciation, primarily through investments in Salomon Brothers Asset
common stocks which are believed to have above-average Management ("SBAM")
price appreciation potential and which may involve
above-average risk.
Variable High Yield To maximize current income, and, secondarily, to seek SBAM
Bond Fund capital appreciation through investments in medium or
lower rating categories.
Variable Investors Fund Long-term growth of capital, and, secondarily, current SBAM
income, through investments in common stocks of well-
known companies.
Variable Strategic Bond Seeks a high level of current income. As a secondary SBAM
Fund objective, the portfolio will seek capital appreciation.
VAN KAMPEN LIFE INVESTMENT
TRUST:
Domestic Income Seeks current income, primarily and capital appreciation Van Kampen Asset
Portfolio as a secondary objective only when consistent with its Management, Inc. ("VKAM")
primary investment objective. The Portfolio attempts to
achieve these objectives through investment primarily in
a diversified portfolio of fixed-income securities. The
Portfolio may invest in investment-grade securities and
lower rated and nonrated securities. Lower rated
securities (commonly known as "junk bonds") are regarded
by the rating agencies as predominantly speculative with
respect to the issuer's continuing ability to meet
principal and interest payments.
</TABLE>

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CHARGES AND DEDUCTIONS
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GENERAL

We deduct the charges described below. The charges are for the service and
benefits we provide, costs and expenses we incur, and risks we assume under the
Contracts. Services and benefits we provide include: the ability for you to make
withdrawals and surrenders under the Contracts; the death benefit paid on the
death of the contract owner, annuitant, or first of the joint contract owners,
the available funding options and related programs, including dollar-cost
averaging, portfolio rebalancing, and systematic withdrawal programs;
administration of the annuity options available under the Contracts; and the
distribution of various reports to contract owners. Costs and expenses we incur
include those associated with various overhead and other expenses associated
with providing the services and benefits provided by the Contracts, sales and
marketing expenses, and other costs of doing business. Risks we assume include
the risks that annuitants may live longer than estimated when the annuity
factors under the Contracts were established, that the amount of the death
benefit will be greater than the contract value or the maximum of all step-up
values for the Enhanced Death Benefit and that the costs of providing the
services and benefits under the Contracts will exceed the charges deducted. We
may also deduct a charge for taxes.

Unless otherwise specified, charges are deducted proportionately from all
funding options in which you are invested.

ADMINISTRATIVE CHARGES

We will deduct an annual contract administrative charge on the fourth Friday of
each August from Contracts with a value of less than $75,000 on that date. This
charge compensates us for expenses incurred in establishing and maintaining the
Contract. The $50 charge is deducted from the

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contract value by canceling accumulation units applicable to each variable
funding option on a pro rata basis. For the first contract 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) if the distribution results from
the death of the contract owner or the annuitant with no contingent annuitant
surviving, (2) after an annuity payout has begun, or (3) if the contract value
on the date of assessment is equal to or greater than $75,000.

An administrative expense charge (sometimes called "sub-account administrative
charge") is deducted on each business day from amounts allocated to the variable
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 variable funding
options.

MORTALITY AND EXPENSE RISK CHARGE

Each business day, the Company deducts a mortality and expense risk ("M&E")
charge from amounts held in the variable funding options. The deduction is
reflected in our calculation of accumulation and annuity unit values. We reserve
the right to lower this charge at any time.

If you choose the Standard Death Benefit, the M&E charge is 1.45% annually for
the first six Contract years. Beginning in the seventh year, the charge is
reduced to 1.40%.

If you choose the Enhanced Death Benefit, the M&E charge is 1.60% annually for
the first six Contract years. Beginning in the seventh Contract year, the charge
is reduced to 1.40%.

FUNDING OPTION EXPENSES

The charges and expenses of the 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, we 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 we have 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.

TRANSFERS
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Up to 30 days before the maturity date, you may transfer all or part of the
contract value between funding options. Transfers are made at the value(s) next
determined after we receive your request at the Home Office. 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, and to
limit the number of transfers to one 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.

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DOLLAR COST AVERAGING

Dollar cost averaging (or "automated transfers") allows you to transfer a set
dollar amount to other funding options on a monthly or quarterly basis so that
more accumulation units are purchased in a funding option if the cost per unit
is low and less accumulation units are purchased if the cost per unit is high.
Therefore, a lower-than-average cost per unit may be achieved over the long run.

You may elect automated transfers through written request or other method
acceptable to the Company. (For Contracts issued in New York, the election must
be made in writing.) You must have a minimum total contract value of $5,000 to
enroll in the Dollar Cost Averaging program. The minimum amount that may be
transferred through this program is $400.

You may establish automated transfers from the Fixed Account, subject to certain
restrictions. Automated transfers from the Fixed Account may not deplete your
Fixed Account Value in less than twelve months from your enrollment in the
Dollar Cost Averaging program.

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

ACCESS TO YOUR MONEY
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Any time before the maturity date, you may redeem all or any portion of the
contract value, less any premium tax not previously deducted. Unless you submit
a written request specifying the fixed or variable funding option(s) from which
amounts are to be withdrawn, the withdrawal will be made on a pro rata 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

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 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.

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LOANS

Loans may be available under your Contract. If available, all loan provisions
are described in your Contract or loan agreement.

OWNERSHIP PROVISIONS

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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. If the first joint owner to die is also
the annuitant, the death benefit will be paid to the beneficiary. If the first
joint owner to die is not the annuitant, the entire interest under 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.

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, where the owner and the annuitant are not the
same person, the contract owner may also name one individual as a contingent
annuitant by written request before the Contract becomes effective. If the
annuitant dies before the maturity date, and a contingent annuitant has been
named, the contingent annuitant becomes the annuitant and the Contract
continues. A contingent annuitant may not be changed, deleted or added after the
Contract becomes effective.

DEATH BENEFIT
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Before the maturity date, when there is no contingent annuitant, a death benefit
is payable when either the annuitant, the contract owner or the first of joint
owners dies. At purchase, you elect

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either the Standard Death Benefit, or the Enhanced Death Benefit. The death
benefit is calculated at the close of the business day on which the Company's
Home Office receives due proof of death and written payment instructions.

DEATH PROCEEDS BEFORE THE MATURITY DATE

STANDARD DEATH BENEFIT: The Company will pay the beneficiary an amount equal to
the greater of (1) and (2) below, each reduced by any applicable premium tax,
withdrawals not previously deducted and any outstanding loans:

1) the contract value; or

2) the total purchase payments made under the Contract.

ENHANCED DEATH BENEFIT: The Company will pay the beneficiary a death benefit in
an amount equal to the greatest of (1), (2) or (3) below, each reduced by any
applicable premium tax, withdrawals not previously deducted and any outstanding
loans:

1) the contract value;

2) the total purchase payments made under the Contract; or

3) the maximum "step-up value" associated with any contract year
anniversary occurring before the annuitant's 80th birthday.

Under Option (3), the step-up value established on each anniversary is increased
by the amount of any subsequent purchase payments and reduced by a partial
withdrawal reduction for any withdrawals. The examples shown below approximate
the level of the partial withdrawal reduction.

PARTIAL WITHDRAWAL REDUCTION. On each contract anniversary, a step-up value is
established, and equals the contract value on that day. If you make a partial
surrender, each step-up value is reduced by a partial surrender reduction which
equals (1) the step-up value multiplied by (2) the amount of the partial
surrender divided by the contract value before the surrender.

For example, assume your current contract value is $55,000. If your original
step-up value is $50,000, and you decide to make a partial withdrawal of
$10,000, the step-up value would be reduced as follows:

50,000 x (10,000/55,000)59,000

Your new step-up value would be 50,000-9,000, or $41,000.

The following example shows what would happen in a declining market. Assume your
current contract value is $30,000. If your original step-up value is $50,000,
and you decide to make a partial withdrawal of $10,000, the step-up value would
be reduced as follows:

50,000 x (10,000/30,000)516,500

Your new step-up value would be 50,000-16,500, or $33,500.

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 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 which is payable over the life of the
beneficiary or over a period not exceeding the beneficiary's life expectancy.

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Under a nonqualified contract, 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. 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.

DEATH OF CONTRACT OWNER WHO IS NOT THE ANNUITANT. 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.

ENTITY AS OWNER. In the case of a nonqualified Contract owned by a nonnatural
person (e.g. a trust or other entity), the death benefit will be paid only upon
the death of the annuitant.

DEATH PROCEEDS AFTER THE MATURITY DATE

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

THE ANNUITY PERIOD
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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). You can also choose among income plans (annuity or income options). While
the annuitant is alive, you can change your selection any time up to the
maturity date. Annuity or income 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.

You may choose to annuitize at any time after you purchase the contract. Unless
you elect otherwise, the maturity date will be the annuitant's 90th birthday or
ten years after the effective date of the contract, if later. (For Contracts
issued in Florida and New York, the maturity date elected may not be later than
the annuitant's 90th birthday.)

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 90th birthday
or 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. You should seek independent tax advice
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 may not be available
in all states. Refer to your contract.) If,

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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 as you have selected during the accumulation period. 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 accumulation 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. If a variable annuity is elected,
the amount applied to it 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
and the annuitant's adjusted age. 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 Contract tables by
the number of thousands of dollars of Contract value applied to that annuity
option and factors in an assumed daily net investment factor. The Assumed Daily
Net Investment Factor corresponds to an annual interest rate of 3%, used to
determine the guaranteed payout rates shown. If investment rates are higher at
the time annuitization is selected, payout rates will be higher than those
shown. Payout rates will not be lower than those shown. 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 payment
options. 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 payment options.

DETERMINATION OF SECOND AND SUBSEQUENT ANNUITY PAYMENTS. The dollar amount of
all subsequent annuity payments changes from month to month based on the
investment experience of the applicable funding options. 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 begin the annuity will be the contract 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.

PAYMENT OPTIONS
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ELECTION OF OPTIONS

While the annuitant is alive, you can change your annuity or income option
selection any time up to the maturity date. Income options differ from annuity
options in that the amount of the payments made under income options are not
based upon the life of any person. Therefore, the annuitant

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may outlive the payment period. Once annuity or income 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 or income 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. The amount
applied to begin an income or annuity option will be the contract value as of
the date the payments begin, less any applicable premium taxes not previously
deducted. (Certain states may have different requirements that we will honor.).

On the maturity date, we will pay the amount due under the Contract in one lump
sum (except in Florida, where this is not permitted), 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.

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 -- Other Annuity Options. The Company will make any other arrangements
for annuity payments as may be mutually agreed upon.

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INCOME OPTIONS

Instead of one of the annuity options described above, and subject to the
conditions described under "Election of Options," all or part of the contract
value may be paid under one or more of the following income options, provided
that they are consistent with federal tax law qualification requirements.
Payments under the income options may be elected on a monthly, quarterly,
semiannual or annual basis:

Option 1 -- Payments of a Fixed Amount. The Company will make equal payments of
the amount elected until the contract value applied under this option has been
exhausted. The first payment and all later payments will be paid from amounts
attributable to each investment option in proportion to the contract value
attributable to each. The final payment will include any amount insufficient to
make another full payment.

Option 2 -- Payments for a Fixed Period. The Company will make payments for the
fixed period selected based on the contract value as of the date payments begin.
If, at the death of the annuitant, the total number of fixed payments has not
been made, the payments will be made to the beneficiary.

Option 3 -- Other Income Options. The Company will make any other arrangements
for income payments as may be mutually agreed upon.

MISCELLANEOUS CONTRACT PROVISIONS
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RIGHT TO RETURN

You may return the Contract for a full refund of the contract value (including
charges) within twenty 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 $1,000 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 premium tax, and any applicable
administrative charge.

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 report date 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 and state laws.

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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.

THE SEPARATE ACCOUNT
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The Travelers Separate Account Seven For Variable Annuities was established on
June 30, 1998 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 the Separate Account will be invested exclusively in
the shares of the variable funding options.

The assets of the Separate Account 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 the Separate
Account are, in accordance with the Contracts, credited to or charged against
the Separate Account without regard to other income, gains and losses of the
Company. The assets held by the Separate Account 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 the Separate Account. 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).

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

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<PAGE> 23

returns will not reflect the deduction of the annual contract administrative
charge, which, if reflected, would decrease the level of performance shown.

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

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

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.

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<PAGE> 24

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.

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 contract 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

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<PAGE> 25

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 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 or the year of retirement.
Distributions must begin or be continued according to required patterns
following
the death of the contract owner or annuitant of both qualified and nonqualified
annuities.

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 Citigroup Inc. The Company's Home Office is located at One Tower
Square, Hartford, Connecticut 06183.

FINANCIAL STATEMENTS

The financial statements for the insurance company are located in the Statement
of Additional Information. The financial statements for the separate account
will be made available through annual reports to shareholders. These reports are
accessible through the SEC's website that appears on the first page of the
prospectus.

IMSA

The Company is a member of the Insurance Marketplace Standards Association
("IMSA"), and as such may use the IMSA logo and IMSA membership in its
advertisements. Companies that belong to IMSA subscribe to a set of ethical
standards covering the various aspects of sales and service for individually
sold life insurance and annuities. IMSA members have adopted policies and
procedures that demonstrate a commitment to honesty, fairness and integrity in
all customer contacts involving the sale and service of individual life
insurance and annuity products.

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<PAGE> 26

YEAR 2000 COMPLIANCE

The Company is highly dependent on computer systems and system applications for
conducting its ongoing business functions. In 1996, the Company began the
process of identifying, assessing and implementing changes to computer programs
to address the year 2000 issue and developed a comprehensive plan to address the
issue. The issue involves the ability of computer systems that have time
sensitive programs to recognize properly the year 2000. The inability to do so
could result in major failures or miscalculations that would disrupt the
Company's ability to meet its customer and other obligations on a timely basis.

The Company is in the process of implementing necessary changes, in accordance
with its Year 2000 plan, to bring all its critical business systems into year
2000 compliance by year end 1998. As part of, and following achievement of year
2000 compliance, systems have been, and will continue to be, subjected to a
certification process which validates the renovated code before it is certified
for use in production. In addition, the Company is developing contingency plans
to be used in the event of an unexpected failure, which may result from the
complex interrelationships among our clients, business partners, and other
parties upon whom it relies.

The total cost associated with the required modifications and conversions, which
are expensed as incurred, is not expected to have a material effect on its
financial position, results of operations or liquidity. The Company also has
third party customers, financial institutions, vendors and others with which it
conducts business and has communicated with them on their plans to address and
resolve year 2000 issues on a timely basis. While it is likely that these
efforts by third party vendors will be successful, it is possible that a series
of failures by third parties could have a material adverse effect on the
Company's results of operations in future years.

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 up front
Contracts will be sold by life insurance sales agents who represent the Company,
and who are licensed registered representatives of the Company or certain other
registered broker-dealers. The up-front compensation paid to sales
representatives will not exceed 7% of the payments made under the Contracts. If
"trail" compensation is paid, it will not exceed 2% annually of the average
account value.

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 CFBDS, Inc.,
21 Milk St., Boston MA. CFBDS, Inc. is not affiliated with the Company or the
Separate Account.

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.

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<PAGE> 27

LEGAL PROCEEDINGS AND OPINIONS

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

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

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<PAGE> 28

APPENDIX A
- --------------------------------------------------------------------------------

THE FIXED ACCOUNT

The Fixed Account is secured by part of the general assets of the Company. The
general assets of the Company include all assets of the Company other than those
held in the separate accounts sponsored by the Company or its affiliates.

The staff of the SEC does not generally review the disclosure in the prospectus
relating to the Fixed Account. Disclosure regarding the Fixed Account and the
general account may, however, be subject to certain provisions of the federal
securities laws relating to the accuracy and completeness of statements made in
the prospectus.

Under the Fixed Account, the Company assumes the risk of investment gain or
loss, guarantees a specified interest rate, and guarantees a specified periodic
annuity payment. The investment gain or loss of the Separate Account or any of
the funding options does not affect the Fixed Account portion of the contract
owner's contract value, or the dollar amount of fixed annuity payments made
under any payout option.

We guarantee that, at any time, the Fixed Account contract value will not be
less than the amount of the purchase payments allocated to the Fixed Account,
plus interest credited as described below, less any applicable premium taxes or
prior surrenders.

Purchase payments allocated to the Fixed Account and any transfers made to the
Fixed Account become part of the Company's general account which supports
insurance and annuity obligations. Neither the general account nor any interest
therein is registered under, nor subject to the provisions of, the Securities
Act of 1933 or Investment Company Act of 1940. We will invest the assets of the
Fixed Account at our discretion. Investment income from such Fixed Account
assets will be allocated to us and to the Contracts participating in the Fixed
Account.

Investment income from the Fixed Account allocated to us includes compensation
for mortality and expense risks borne by us in connection with Fixed Account
Contracts. The amount of such investment income allocated to the Contracts will
vary from year to year in our sole discretion at such rate or rates as we
prospectively declare from time to time.

The initial rate for any allocations into the Fixed Account is guaranteed for
one year from the date of such allocation. Subsequent renewal rates will be
guaranteed for the calendar quarter. We also guarantee that for the life of the
Contract we will credit interest at not less than 3% per year. Any interest
credited to amounts allocated to the Fixed Account in excess of 3% per year will
be determined in our sole discretion. You assume the risk that interest credited
to the Fixed Account may not exceed the minimum guarantee of 3% for any given
year.

TRANSFERS

You may make transfers from the Fixed Account to any other available funding
option(s) twice a year during the 30 days following the semiannual anniversary
of the contract effective date. The transfers are limited to an amount of up to
15% of the Fixed Account Value on the semiannual contract effective date
anniversary. (This restriction does not apply to transfers under the Dollar Cost
Averaging Program.) Amounts previously transferred from the Fixed Account to
other funding options may not be transferred back to the Fixed Account for a
period of at least six months from the date of transfer. We reserve the right to
waive either of these restrictions.

Automated transfers from the Fixed Account to any of the funding options may
begin at any time. Automated transfers from the Fixed Account may not deplete
your Fixed Account value in a period of less than twelve months from your
enrollment in the Dollar Cost Averaging Program.

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<PAGE> 29

APPENDIX B
- --------------------------------------------------------------------------------

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
Valuation of Assets
Performance Information
Mixed and Shared Funding

Federal Tax Considerations

Independent Accountants

Financial Statements

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

Copies of the Statement of Additional Information dated ________ , 1998 (Form
No. L-21258S) 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 Investor
Services, One Tower Square, Hartford, Connecticut 06183.

Name:
- ----------------------------------------

Address:
- ----------------------------------------

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

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THIS PAGE INTENTIONALLY LEFT BLANK.
<PAGE> 31
PART B

Information Required in a Statement of Additional Information
<PAGE> 32
TRAVELERS PREMIER ADVISERS - ASSET MANAGER

STATEMENT OF ADDITIONAL INFORMATION

dated

_____ , 1998

for

THE TRAVELERS SEPARATE ACCOUNT SEVEN 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 Variable Annuity Contract
Prospectus dated _______, 1998. A copy of the Prospectus may be obtained by
writing to The Travelers Insurance Company, Annuity Services, One Tower Square,
Hartford, Connecticut 06183-8036, or by calling (800) 599-9460.

TABLE OF CONTENTS

THE INSURANCE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . .. 1

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

DISTRIBUTION AND MANAGEMENT AGREEMENT . . . . . . . . . . . . . . . . . . 1

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

MIXED AND SHARED FUNDING . . . . . . . . . . . . . . . . . . . . . . . . 3

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

FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . .. . . . . . . . . . . . 7

INDEPENDENT ACCOUNTANTS . . . . . . . . . . . . . . . . . . . . . . . . 10

FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

<PAGE> 33

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. The Company is licensed to conduct life
insurance business in all states of the United States, the District of Columbia,
Puerto Rico, Guam, the U.S. and British Virgin Islands and the Bahamas. The
Company's Home Office is located at One Tower Square, Hartford, Connecticut
06183.

The Company is indirectly owned by a wholly owned subsidiary of
Citigroup, Inc. Citigroup consists of businesses that produce a broad range of
financial services, including asset management, banking and consumer finance,
credit and charge cards, insurance, investments, investment banking and trading.
Among its businesses are Citibank, Commercial Credit, Primerica Financial
Services, Salomon Smith Barney, Salomon Smith Barney Asset Management, and
Travelers Property Casualty.

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. The Separate Account 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 the Separate Account 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

CFBDS, Inc. serves as principal underwriter for the Separate Account
and the Contracts. The offering is continuous. CFBDS's principal executive
offices are located at 21 Milk St., Boston, MA 02109.

DISTRIBUTION AND MANAGEMENT AGREEMENT

Under the terms of the Distribution and Management Agreement among the
Separate Account, the Company and the Principal Underwriter, the Company
provides all administrative services and mortality and expense risk guarantees
related to variable annuity contracts sold by the Company in connection with the
Separate Account. The Principal Underwriter performs the sales functions related
to the Contracts. The Company reimburses CFBDS for commissions paid, other sales
expenses and

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<PAGE> 34

certain overhead expenses connected with sales functions. The Company also pays
all costs (including costs associated with the preparation of sales literature);
all costs of qualifying the Separate Account and the variable annuity contract
with regulatory authorities; the costs of proxy solicitation; and all custodian,
accountant's and legal fees. The Company also provides without cost to the
Separate Account all necessary office space, facilities, and personnel to manage
its affairs.

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

<PAGE> 35

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 the accumulation unit for each funding
option was initially established at $1.00. 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.

ANNUITY UNIT VALUE. The initial Annuity Unit Value applicable to each funding
option was established at $1.00. An annuity unit value as of any business day is
equal to (a) the value of the annuity unit on the 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.)

MIXED AND SHARED FUNDING

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

PERFORMANCE INFORMATION

From time to time, the Company may advertise several types of
historical performance for the Funding Options of 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 "nonstandardized 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 contract 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

<PAGE> 36

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.

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 annual contract administrative charge, which, if reflected, would
decrease the level of performance shown.

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

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

Average annual total returns for each of the Funding Options (excluding
Money Market Portfolio) computed according to the standardized and
nonstandardized methods for the period ending December 31, 1997 are set forth in
the following table.

ACTUAL RETURNS FOR THE SEPARATE ACCOUNT ARE NOT AVAILABLE, SINCE THE
SEPARATE ACCOUNT IS NEW AND THEREFORE HAS NO INVESTMENT HISTORY. However,
average annual total returns have been calculated using each funding option's
investment performance since inception. The returns were computed according to
the standardized and nonstandardized methods for the period ending December 31,
1997 as if they had been available under the Separate Account during that time.
They are set forth in the following tables.

<PAGE> 37

TRAVELERS PREMIER ADVISERS ASSET MANAGER
NONSTANDARDIZED PERFORMANCE AS OF 12/31/1997

<TABLE>
<CAPTION>
NONSTANDARDIZED
(TAKING INTO ACCOUNT ALL CHARGES AND NONSTANDARDIZED
FEES EXCEPT CONTRACT ADMINISTRATIVE (TAKING INTO ACCOUNT ALL
CHARGE AND DEFERRED SALES CHARGE) CHARGES AND FEES)

10 YEAR 10 YEAR
OR OR
STANDARD DEATH BENEFIT (1) 1 YEAR 3 YEAR 5 YEAR INCEPTION 1 YEAR 5 YEAR INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C>
MORGAN STANLEY ASSET MANAGEMENT INC.
MAS Mid Cap Value Portfolio 38.75% * 38.60% *
MAS Value Portfolio 19.10% * 18.95% *
Morgan Stanley Emerging Markets Equity Portfolio -1.29% -2.96% * -1.43% -3.07% *
Morgan Stanley Global Equity Portfolio 18.17% * 18.02% *
Morgan Stanley Real Estate Securities Portfolio 19.59% 25.84% * 19.45% 25.72% *
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Capital Fund
Salomon Brothers High Yield Bond Fund
Salomon Brothers Investors Fund
Salomon Brothers Strategic Bond Fund
VAN KAMPEN LIFE INVESTMENT TRUST
Van Kampen Domestic Income 10.15% 11.36% 8.29% 6.57% 10.01% 8.20% 6.53%
Van Kampen Emerging Growth 18.54% 20.13% * 18.39% 20.02% *
Van Kampen Enterprise Portfolio 28.63% 28.65% 16.78% 15.37% 28.47% 16.70% 10.38%
Van Kampen Government Portfolio 7.89% 7.72% 4.49% 6.46% 7.75% 4.41% 6.35%
Van Kampen Growth and Income 19.66% 18.81% * 19.52% 18.67% *
Van Kampen Money Market Portfolio 3.40% 3.46% 2.70% 3.82% 3.26% 2.61% 3.79%
</TABLE>

<TABLE>
<CAPTION>
FUND
INCEPTION
STANDARD DEATH BENEFIT (1) DATE

<S> <C>
MORGAN STANLEY ASSET MANAGEMENT INC.
MAS Mid Cap Value Portfolio 1/2/1997
MAS Value Portfolio 1/2/1997
Morgan Stanley Emerging Markets Equity Portfolio 10/1/1996
Morgan Stanley Global Equity Portfolio 1/3/1997
Morgan Stanley Real Estate Securities Portfolio 7/3/1995
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Capital Fund 2/17/1998
Salomon Brothers High Yield Bond Fund 5/1/1998
Salomon Brothers Investors Fund 2/17/1998
Salomon Brothers Strategic Bond Fund 2/17/1998
VAN KAMPEN LIFE INVESTMENT TRUST
Van Kampen Domestic Income 11/4/1987
Van Kampen Emerging Growth 7/3/1995
Van Kampen Enterprise Portfolio 4/7/1986
Van Kampen Government Portfolio 4/7/1986
Van Kampen Growth and Income 12/23/1996
Van Kampen Money Market Portfolio 4/7/1986
</TABLE>

<PAGE> 38

<TABLE>
<CAPTION>
NONSTANDARDIZED
(TAKING INTO ACCOUNT ALL CHARGES AND NONSTANDARDIZED
FEES EXCEPT CONTRACT ADMINISTRATIVE (TAKING INTO ACCOUNT ALL
CHARGE AND DEFERRED SALES CHARGE) CHARGES AND FEES)

10 YEAR 10 YEAR
OR OR
ENHANCED DEATH BENEFIT (2) 1 YEAR 3 YEAR 5 YEAR INCEPTION 1 YEAR 5 YEAR INCEPTION
<S> <C> <C> <C> <C> <C> <C> <C>
STANLEY ASSET MANAGEMENT INC.
MAS Mid Cap Value Portfolio 38.55% * 38.39% *
MAS Value Portfolio 18.92% * 18.77% *
Morgan Stanley Emerging Markets Equity Portfolio -1.44% -3.11% * -1.57% -3.21% *
Morgan Stanley Global Equity Portfolio 18.00% * 17.85% *
Morgan Stanley Real Estate Securities Portfolio 19.42% 25.66% * 19.27% 25.53% *
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Capital Fund
Salomon Brothers High Yield Bond Fund
Salomon Brothers Investors Fund
Salomon Brothers Strategic Bond Fund
VAN KAMPEN LIFE INVESTMENT TRUST
Van Kampen Domestic Income 9.98% 11.20% 8.12% 6.41% 9.84% 8.04% 6.37%
Van Kampen Emerging Growth 18.36% 19.96% * 18.22% 19.84% *
Van Kampen Enterprise Portfolio 28.44% 28.46% 16.61% 15.20% 28.29% 16.52% 10.22%
Van Kampen Government Portfolio 7.72% 7.56% 4.33% 6.30% 7.59% 4.25% 6.19%
Van Kampen Growth and Income 19.49% 18.64% * 19.34% 18.49% *
Van Kampen Money Market Portfolio 3.24% 3.31% 2.54% 3.66% 3.11% 2.46% 3.63%
</TABLE>

<TABLE>
<CAPTION>
FUND
INCEPTION
ENHANCED DEATH BENEFIT (2) DATE

STANLEY ASSET MANAGEMENT INC.
<S> <C>
MAS Mid Cap Value Portfolio 1/2/1997
MAS Value Portfolio 1/2/1997
Morgan Stanley Emerging Markets Equity Portfolio 10/1/1996
Morgan Stanley Global Equity Portfolio 1/ 3/1997
Morgan Stanley Real Estate Securities Portfolio 7/3/1995
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Salomon Brothers Capital Fund 2/17/1998
Salomon Brothers High Yield Bond Fund 5/1/1998
Salomon Brothers Investors Fund 2/17/1998
Salomon Brothers Strategic Bond Fund 2/17/1998
VAN KAMPEN LIFE INVESTMENT TRUST
Van Kampen Domestic Income 11/4/1987
Van Kampen Emerging Growth 7/3/1995
Van Kampen Enterprise Portfolio 4/7/1986
Van Kampen Government Portfolio 4/7/1986
Van Kampen Growth and Income 12/23/1996
Van Kampen Money Market Portfolio 4/7/1986
</TABLE>

* Reflects performance since inception

(1) Reflects maximum total asset based fees of 1.60% comprised of 1.45%
mortality and expense charge and 0.15% sub-account administrative
charge; the mortality and expense risk charge reduces to 1.40 at the
end of the 6th contract year

(2) Reflects maximum total asset based fees of 1.75% comprised of 1.60%
mortality and expense charge and 0.15% sub-account administrative
charge; the mortality and expense risk charge reduces to 1.40 at the
end of the 6th contract year

<PAGE> 39
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 70-1/2. Distributions must also begin or be continued according to required
patterns following the death of the contract owner or the annuitant.

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

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

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

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

<PAGE> 40
INDIVIDUAL RETIREMENT ANNUITIES
To the extent of earned income for the year and not exceeding $2,000
per individual, an individual may make deductible contributions to an individual
retirement annuity (IRA). There are certain limits on the deductible amount
based on the adjusted gross income of the individual and spouse and based on
their participation in a retirement plan. If an individual is married and the
spouse does not have earned income, the individual may establish IRAs for the
individual and spouse. Purchase payments may then be made annually into IRAs for
both spouses in the maximum amount of 100% of earned income up to a combined
limit of $4,000.

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

SIMPLE Plan IRA Form

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

ROTH IRAS

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

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

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.

<PAGE> 41

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

FEDERAL INCOME TAX WITHHOLDING

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

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

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

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

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

(c) a minimum required distribution as defined under the tax law
is taken after the attainment of the age of 70-1/2 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, 1998, a recipient receiving
periodic payments (e.g., monthly or annual payments under an

<PAGE> 42

annuity option) which total $15,200 or less per year, will generally be exempt
from periodic withholding.

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

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

INDEPENDENT ACCOUNTANTS

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

Since there were no assets in the Separate Account as of December 31,
1997, there are no financial statements.

<PAGE> 43
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

INDEPENDENT AUDITORS' REPORT

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

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

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

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

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

F-1
<PAGE> 44
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND RETAINED EARNINGS
($ IN MILLIONS)

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

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

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

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

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

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

See Notes to Consolidated Financial Statements.

F-2
<PAGE> 45
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ IN MILLIONS)

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

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

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

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

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

See Notes to Consolidated Financial Statements.

F-3
<PAGE> 46
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
($ IN MILLIONS)

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

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

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

See Notes to Consolidated Financial Statements.

F-4
<PAGE> 47
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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

Basis of Presentation

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

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

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

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

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

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

Certain prior year amounts have been reclassified to conform with the 1997
presentation.
F-5
<PAGE> 48
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Accounting Changes

EMPLOYERS' DISCLOSURES ABOUT PENSIONS AND OTHER POSTRETIREMENT BENEFITS

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

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

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

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

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

F-6
<PAGE> 49
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

ACCOUNTING FOR STOCK-BASED COMPENSATION

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

Accounting Policies

INVESTMENTS

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

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

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

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

F-7
<PAGE> 50
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

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

DERIVATIVE FINANCIAL INSTRUMENTS

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

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

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

INVESTMENT GAINS AND LOSSES

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

POLICY LOANS

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

DEFERRED ACQUISITION COSTS AND VALUE OF INSURANCE IN FORCE

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

F-8
<PAGE> 51
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

SEPARATE AND VARIABLE ACCOUNTS

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

GOODWILL

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

CONTRACTHOLDER FUNDS

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

FUTURE POLICY BENEFITS

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

F-9
<PAGE> 52
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

PERMITTED STATUTORY ACCOUNTING PRACTICES

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

PREMIUMS

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

OTHER REVENUES

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

INTEREST CREDITED TO CONTRACTHOLDERS

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

FEDERAL INCOME TAXES

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

Future Application of Accounting Standards

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

F-10
<PAGE> 53
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

2. DISPOSITIONS AND DISCONTINUED OPERATIONS

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

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

F-11
<PAGE> 54
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

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

3. COMMERCIAL PAPER AND LINES OF CREDIT

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

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

F-12
<PAGE> 55
\ THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

4. REINSURANCE

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

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

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

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

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

F-13
<PAGE> 56
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

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

5. SHAREHOLDER'S EQUITY

Additional Paid-In Capital

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

Unrealized Investment Gains (Losses)

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

Shareholder's Equity and Dividend Availability

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

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

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

F-14
<PAGE> 57
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

6. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

Derivative Financial Instruments

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

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

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

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

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

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

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

F-15
<PAGE> 58
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

Financial Instruments with Off-Balance Sheet Risk

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

Fair Value of Certain Financial Instruments

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

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

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

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

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

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

F-16
<PAGE> 59
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

7. COMMITMENTS AND CONTINGENCIES

Financial Instruments with Off-Balance Sheet Risk

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

Litigation

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

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

8. BENEFIT PLANS

Pension and Other Postretirement Benefits

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

F-17
<PAGE> 60
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

401(k) Savings Plan

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

9. RELATED PARTY TRANSACTIONS

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

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

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

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

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

F-18
<PAGE> 61
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

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

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

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

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

10. LEASES

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

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

F-19
<PAGE> 62
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

11. FEDERAL INCOME TAXES

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

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

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

F-20
<PAGE> 63
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

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

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

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

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

F-21
<PAGE> 64
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

12. NET INVESTMENT INCOME

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

13. INVESTMENTS AND INVESTMENT GAINS (LOSSES)

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

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

F-22
<PAGE> 65
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

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

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

Fixed Maturities

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

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

F-23
<PAGE> 66
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

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

F-24
<PAGE> 67

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

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

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

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

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

F-25
<PAGE> 68
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

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

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

Mortgage Loans and Real Estate Held For Sale

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

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

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

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

F-26
<PAGE> 69
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

Joint Venture

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

Trading Securities

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

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

TRADING SECURITIES SOLD NOT YET PURCHASED

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

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

F-27
<PAGE> 70
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Concentrations

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

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

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

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

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

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

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

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

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

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

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

F-28
<PAGE> 71
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

Non-Income Producing Investments

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

Restructured Investments

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

14. DEPOSIT FUNDS AND RESERVES

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

F-29
<PAGE> 72
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

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

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

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

16. NON-CASH INVESTING AND FINANCING ACTIVITIES

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

F-30
<PAGE> 73

STATEMENT OF ADDITIONAL INFORMATION
SEPARATE ACCOUNT SEVEN

Individual Variable Annuity Contract
issued by

The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183

L-21258S ______, 1998

11
<PAGE> 74
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 Prospectus. The consolidated financial statements of
The Travelers Insurance Company and Subsidiaries include:

Consolidated Statements of Income and Retained Earnings for the years
ended December 31, 1997, 1996 and 1995

Consolidated Balance Sheets as of December 31, 1997 and 1996

Consolidated Statements of Cash Flows for the years ended December 31,
1997, 1996 and 1995

Notes to Consolidated Financial Statements

(b) Exhibits

1. Resolution of The Travelers Insurance Company Board of Directors
authorizing the establishment of the Registrant. (Incorporated herein
by reference to Exhibit 1 to the Registration Statement on Form N-4,
filed July 30, 1998.)

2. Not Applicable.

3(a). Form of Distribution and Principal Underwriting Agreement among the
Registrant, The Travelers Insurance Company and CFBDS, Inc.

3(b). Form of Selling Agreement.

4. Variable Annuity Contract.

5. Application.

6(a). Charter of The Travelers Insurance Company, as amended on October 19,
1994. (Incorporated herein by reference to Exhibit 6(a) to the
Registration Statement on Form N-4, File No. 333-40193, filed November
13, 1998.)

6(b). By-Laws of The Travelers Insurance Company, as amended on October 20,
1994. (Incorporated herein by reference to Exhibit 6(b) to the
Registration Statement on Form N-4, File No. 333-40193, filed November
13, 1998.)

9. Opinion of Counsel as to the legality of securities being registered.
(Incorporated herein by reference to Exhibit 3(a) to the Registration
Statement on Form N-4, filed July 30, 1998.).

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

13. Computation of Total Return Calculations - Standardized and
Non-Standardized.
<PAGE> 75
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. (Incorporated herein by reference to Exhibit 15 to the
Registration Statement on Form N-4, filed July 30, 1998.).

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
Ambrose J. Murphy* Deputy General Counsel
Paula Burton* Vice President
Virginia M. Meany* Vice President
Selig Ehrlich* Vice President and Actuary
Ernest J. Wright* Vice President and Secretary
Kathleen A. McGah* Assistant Secretary and Counsel
Donald R. Munson, Jr.* Second Vice President
</TABLE>

Principal Business Address:
* The Travelers Insurance Company *** Citigroup Inc.
One Tower Square 399 Park Avenue
Hartford, CT 06183 New York, N.Y. 10043

** Travelers Portfolio Group
1345 Avenue of the Americas
New York, NY 10105

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

Incorporated herein by reference to Item 26 to Post-Effective Amendment
No. 5 to the Registration Statement on Form N-4, File No. 33-73466 filed
April 10, 1998.
<PAGE> 76
Item 27. Number of Contract Owners

Not applicable.

Item 28. Indemnification

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

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

Citigroup 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> 77
Item 29. Principal Underwriter

(a) CFBDS, Inc.
21 Milk Street
Boston, MA 02109

CFBDS, 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 Separate Account TM for Variable Annuities
The Travelers Separate Account TM II for Variable Annuities
The Travelers Separate Account Five for Variable Annuities
The Travelers Separate Account Six for Variable Annuities
The Travelers Separate Account Eight 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

CitiFunds Trust I
CitiFunds Trust II
CitiFunds Trust III
CitiFunds International Trust
CitiFunds Fixed Income Trust
CitiFunds Tax Free Income Trust
CitiFunds Tax Free Reserves
CitiFunds Multi-State Tax Free Trust
CitiFunds Premium Trust
CitiFunds Institutional Trust
CitiVariable Annuity
CitiVariable Annuity Plus
Variable Annuity Portfolios
The Premium Portfolios
Asset Allocation Portfolios
Cash Reserve Portfolio
Tax Free Reserves Portfolio
U.S. Treasury Reserves Portfolio
<PAGE> 78
CONCERT INVESTMENT SERIES:
Emerging Growth Fund
Government Fund
Growth and Income Fund
International Equity Fund
Municipal Fund
CONSULTING GROUP CAPITAL MARKETS FUNDS:
Balanced Investments
Emerging Markets Equity Investments
Government Money Investments
High Yield Investments
Intermediate Fixed Income Investments
International Equity Investments
International Fixed Income Investments
Large Capitalization Growth Investments
Large Capitalization Value Equity Investments
Long-Term Bond Investments
Mortgage Backed Investments
Municipal Bond Investments
Small Capitalization Growth Investments
Small Capitalization Value Equity Investments
GREENWICH STREET SERIES FUND:
Appreciation Portfolio
Diversified Strategic Income Portfolio
Emerging Growth Portfolio
Equity Income Portfolio (Class I)
Equity Income Portfolio (Class II)
Equity Index Portfolio
Growth & Income Portfolio
Intermediate High Grade Portfolio
International Equity Portfolio
Money Market Portfolio
Total Return Portfolio
SMITH BARNEY ADJUSTABLE RATE GOVERNMENT INCOME FUND
SMITH BARNEY AGGRESSIVE GROWTH FUND INC.
SMITH BARNEY APPRECIATION FUND
SMITH BARNEY ARIZONA MUNICIPALS FUND INC.
SMITH BARNEY CALIFORNIA MUNICIPALS FUND INC.
SMITH BARNEY CONCERT ALLOCATION SERIES INC.:
Balanced Portfolio
Conservative Portfolio
Growth Portfolio
High Growth Portfolio
Income Portfolio
Global Portfolio
Select Balanced Portfolio
Select Conservative Portfolio
Select Growth Portfolio
Select High Growth Portfolio
Select Income Portfolio
SMITH BARNEY EQUITY FUNDS:
Concert Social Awareness Fund
Smith Barney Large Cap Blend Fund
SMITH BARNEY FUNDAMENTAL VALUE FUND INC.
<PAGE> 79
SMITH BARNEY FUNDS, INC.:
Large Cap Value Fund
Short-Term High Grade Bond Fund
U.S. Government Securities Fund
SMITH BARNEY INCOME FUNDS:
Smith Barney Convertible Fund
Smith Barney Diversified Strategic Income Fund
Smith Barney Exchange Reserve Fund
Smith Barney High Income Fund
Smith Barney Municipal High Income Fund
Smith Barney Premium Total Return Fund
Smith Barney Total Return Bond Fund
SMITH BARNEY INSTITUTIONAL CASH MANAGEMENT FUND, INC.:
Cash Portfolio Government Portfolio
Municipal Portfolio
SMITH BARNEY INVESTMENT FUNDS INC.:
Concert Peachtree Growth Fund
Smith Barney Contrarian Fund
Smith Barney Government Securities Fund
Smith Barney Hansberger Global Small Cap Value Fund
Smith Barney Hansberger Global Value Fund
Smith Barney Investment Grade Bond Fund
Smith Barney Special Equities Fund
SMITH BARNEY INVESTMENT TRUST:
Smith Barney Intermediate Maturity California Municipals Fund
Smith Barney Intermediate Maturity New York Municipals Fund
Smith Barney Large Cap Capitalization Growth Fund
Smith Barney S&P 500 Index Fund
Smith Barney Mid Cap Blend Fund
SMITH BARNEY MANAGED GOVERNMENTS FUND INC.
SMITH BARNEY MANAGED MUNICIPALS FUND INC.
SMITH BARNEY MASSACHUSETTS MUNICIPALS FUND
SMITH BARNEY MONEY FUNDS, INC.:
Cash Portfolio
Government Portfolio
Retirement Portfolio
SMITH BARNEY MUNI FUNDS:
California Money Market Portfolio
Florida Portfolio
Georgia Portfolio
Limited Term Portfolio
New York Money Market Portfolio
New York Portfolio
Pennsylvania Portfolio
SMITH BARNEY MUNICIPALS MONEY MARKET FUND, INC.
SMITH BARNEY NATURAL RESOURCES FUND INC.
SMITH BARNEY NEW JERSEY MUNICIPALS FUND INC.
SMITH BARNEY OREGON MUNICIPALS FUND
SMITH BARNEY PRINCIPAL RETURN FUND:
Zeros Plus Emerging Growth Series 2000
Smith Barney Security and Growth Fund
SMITH BARNEY SMALL CAP BLEND FUND, INC.
SMITH BARNEY TELECOMMUNICATIONS TRUST:
Smith Barney Telecommunications Income Fund
<PAGE> 80
SMITH BARNEY VARIABLE ACCOUNT FUNDS:
Income and Growth Portfolio
Reserve Account Portfolio
U.S. Government/High Quality Securities Portfolio
SMITH BARNEY WORLD FUNDS, INC.:
Emerging Markets Portfolio
European Portfolio
Global Government Bond Portfolio
International Balanced Portfolio
International Equity Portfolio
Pacific Portfolio
TRAVELERS SERIES FUND INC.:
AIM Capital Appreciation Portfolio
Alliance Growth Portfolio
GT Global Strategic Income Portfolio
MFS Total Return Portfolio
Putnam Diversified Income Portfolio
Smith Barney High Income Portfolio
Smith Barney Large Cap Value Portfolio
Smith Barney International Equity Portfolio
Smith Barney Large Capitalization Growth Portfolio
Smith Barney Money Market Portfolio
Smith Barney Pacific Basin Portfolio
TBC Managed Income Portfolio
Van Kampen American Capital Enterprise Portfolio
CENTURION FUNDS, INC.:
Centurion Tax-Managed U.S. Equity Fund
Centurion Tax-Managed International Equity Fund
Centurion U.S. Protection Fund
Centurion International Protection Fund
AMERICAN ODYSSEY FUNDS:
Global High-Yield Bond Fund
International Equity Fund
Emerging Opportunities Fund
Core Equity Fund
Long-Term Bond Fund
Intermediate-Term Bond Fund
SALOMON BROTHERS VARIABLE SERIES FUND:
Salomon Brothers Total Return Fund
Salomon Brothers Capital Fund
Salomon Brothers High Yield Bond Fund
Salomon Brothers Variable Investors Fund
Salomon Brothers Strategic Bond Fund
<PAGE> 81
(b) Name and Principal Positions and Offices
Business Address * With Underwriter
-------------------- ---------------------------------------
Phillip W. Coolidge Chairman of the Board, Director
Chief Executive Officer, and President
Linda T. Gibson Secretary
Molly S. Mugler Assistant Secretary
Linwood C. Downs Treasurer
John R. Elder Assistant Treasurer
Susan Jakuboski Assistant Treasurer
Donald S. Chadwick Director
Robert G. Davidoff Director
Leeds Hackett Director
Laurence E. Levine Director

* Principal business address: 21 Milk Street, Boston, MA 02109

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> 82
SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant has duly caused this Pre-Effective Amendment No. 1 to the
Registration Statement to be signed on its behalf in the City of Hartford, State
of Connecticut, on November 9, 1998.

THE TRAVELERS SEPARATE ACCOUNT SEVEN 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 Pre-Effective
Amendment No. 1 to the Registration Statement has been signed below by the
following persons in the capacities indicated on November 9, 1998.

*MICHAEL A. CARPENTER Director, Chairman of the Board, President
(Michael A. Carpenter) and Chief Executive Officer

*JAY S. BENET Director and Senior Vice President
(Jay S. Benet)

*GEORGE C. KOKULIS Director and Senior Vice President
(George C. Kokulis

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

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

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

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

*By: /s/ Ernest J. Wright, Attorney-in-Fact
<PAGE> 83
EXHIBIT INDEX

Exhibit
No. Description Method of Filing

1. Resolution of The Travelers Insurance Company Board
of Directors authorizing the establishment of the
Registrant. (Incorporated herein by reference to
Exhibit 1 to the Registration Statement on Form
N-4, filed July 30, 1998.)

3(a). Form of Distribution and Principal Underwriting Electronically
Agreement among the Registrant, The Travelers
Insurance Company and CFBDS, Inc.

3(b). Form of Selling Agreement. Electronically

4. Form of Variable Annuity Contract. Electronically

5. Application. Electronically

6(a). Charter of The Travelers Insurance Company, as
amended on October 19, 1994. (Incorporated herein
by reference to Exhibit 6(a) to the Registration
Statement on Form N-4, File No. 333-40193, filed
November 13, 1998.)

6(b). By-Laws of The Travelers Insurance Company, as
amended on October 20, 1994. (Incorporated herein
by reference to Exhibit 6(a) to the Registration
Statement on Form N-4, File No. 333-40193, filed
November 13, 1998.)

9. Opinion of Counsel as to the legality of securities
being registered by Registrant. (Incorporated
herein by reference to Exhibit 9 to the
Registration Statement on Form N-4, filed July 30,
1998.)

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

13. Schedule for Computation of Total Return Electronically
Calculations - Standardized and Non-Standardized.

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. (Incorporated herein by reference to
Exhibit 15 to the Registration Statement on Form
N-4, filed July 30, 1998.)

<PAGE> 1
EXHIBIT 3(a)

DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT

THIS AGREEMENT is made this 8th day of October, 1998, by and among The
Travelers Insurance Company ("The Travelers"), a Connecticut stock insurance
company, with its principal offices in Hartford, Connecticut and each of the
investment companies as set forth in Schedule A attached hereto, as the same may
be amended from time to time, each acting on its own behalf and not on behalf of
any other investment company and each being solely responsible for its
obligations, (each, a "Separate Account" and collectively, the "Separate
Accounts"), each of which is a registered, open-end management investment
company under the Investment Company Act of 1940, as amended (the "1940 Act") of
The Travelers established pursuant to Connecticut State Insurance Law with its
principal offices in Hartford. Connecticut, and CFBDS, Inc. (the "Distributor")
a Massachusetts general business corporation.

WHEREAS, the Distributor is engaged principally in the business of
distributing variable insurance products and investment company shares, is
registered as a broker-dealer under the Securities Exchange Act of 1934, as
amended (the "1934 Act"), and is a member of the National Association of
Securities Dealers, Inc. ("NASD");

WHEREAS, The Travelers and each Separate Account have registered
variable annuity contracts (the "Contracts") under the Securities Act of 1933,
as amended (the "1933 Act"), and desire to retain the Distributor to distribute
the Contracts and the Distributor is willing to distribute the Contracts in the
manner and on the terms set forth herein;

NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, The Travelers, each Separate Account, and the
Distributor hereby agree as follows:

1. Definitions. The terms "affiliated person," "assignment,"
"interested person," and "majority of the outstanding voting securities," when
used in this Agreement, shall have the respective meanings specified under the
1940 Act and rules thereunder. In addition, the term "representative," when used
in this Agreement shall have the meaning specified under the 1934 Act and rules
thereunder.

2. Distribution and Principal Underwriting of the Contracts.

(a) Right to Distribute Contracts. The Travelers and each
Separate Account hereby grant to the Distributor the exclusive right, subject to
the requirements of the 1933 Act, the 1934 Act, and the 1940 Act, and the terms
set forth herein, to act as agent for distribution of the Contracts and as
principal underwriter during the term of this Agreement. The Distributor shall
at all times function as and be deemed to be an independent contractor and
nothing herein contained shall constitute the Distributor or its agents,
officers, or employees as agents, officers, or employees of The Travelers solely
by virtue of their activities in connection with the sale of the Contracts
hereunder. The Distributor will use its best efforts to distribute the Contracts
in accordance with applicable laws, including the rules of the NASD.
<PAGE> 2
The Travelers and each Separate Account hereby authorize the
Distributor to enter into written sales or service agreements, on such terms and
conditions as the Distributor may determine are consistent with this Agreement,
with broker-dealers that are registered under the 1934 Act and are members of
the NASD and who agree to distribute the Contracts. Distributor shall not be
obligated or authorized to make retail sales to the public.

(b) Limits on Authority. This Agreement notwithstanding, The
Travelers retains the ultimate right to control the sale of the Contracts,
including the right to suspend sales in any jurisdiction or jurisdictions, to
appoint and discharge agents of The Travelers, or to refuse to sell a Contract
to any applicant for any reason whatsoever. Furthermore, the Distributor and its
representatives shall not have authority, on behalf of The Travelers: to make,
alter, or discharge any Contract or other variable contract entered into
pursuant to a Contract; to waive any Contract forfeiture provision; to extend
the time of paying any premium, or to receive any monies or premiums. The
Distributor shall not expend, nor contract for the expenditure of, the funds of
The Travelers. The Distributor shall not possess or exercise any authority on
behalf of The Travelers other than that expressly conferred on the Distributor
by this Agreement.

(c). Registration; Compliance with NASD Conduct Rules. To the
extent necessary to distribute the Contracts, the Distributor shall be duly
registered or otherwise qualified under all applicable securities laws of any
state or other jurisdiction in which the Distributor is licensed or otherwise
authorized to distribute the Contracts, if required. The Distributor shall be
responsible for the training, supervision, and control of its representatives
for the purpose of the NASD Conduct Rules and all applicable federal and state
securities law requirements.

(d) Representations and Warranties of the Distributor. The
Distributor represents and warrants to The Travelers that the Distributor is,
and during the term of this Agreement shall remain, registered as a
broker-dealer under the 1934 Act, admitted as a member with the NASD, and duly
registered under applicable state securities laws, and that the Distributor is
and shall remain during the term of this Agreement in compliance with Section
9(a) of the 1940 Act.

(e) Marketing Materials; Preparation and Filing. The Travelers
shall design and develop all promotional, sales, and advertising material
relating to the Contracts and any other marketing-related documents for use in
the sale of the Contracts, subject to review and approval by Distributor of such
material and documents in accordance with Section 2210 of the NASD Conduct
Rules. The Distributor shall be responsible for filing such material with the
NASD and any state securities regulatory authorities requiring such filings. The
Travelers shall be responsible for filing all promotional, sales, or advertising
material, as required, with any state insurance regulatory authorities. The
Travelers shall be responsible for preparing the Contract forms and filing them
with applicable state insurance regulatory authorities, and for preparing the
prospectuses and registration statements for the Contracts and filing them with
the Securities and Exchange Commission (the "SEC") and state regulatory
authorities, to the extent required. The parties shall notify each other
expeditiously of any comments provided by the SEC, NASD, or any securities or
insurance regulatory authority on such material, and will cooperate
expeditiously in resolving and implementing any comments, as applicable.

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3. Books and Records.

(a) The Travelers, each Separate Account, and the Distributor
shall cause to be maintained and preserved all books of account and related
financial records as are required by the 1934 Act, the NASD, and any other
applicable laws and regulations. These books and records as to all transactions
hereunder shall be maintained so as to disclose clearly and accurately the
nature and details of the transactions. All the books and records maintained by
The Travelers on behalf of the Distributor, or by any person on behalf of The
Travelers, or by the Distributor directly, in connection with the offer and sale
of the Contracts, shall be maintained and preserved in conformity with the
requirements of Rules 17a-3 and 17a-4 under the 1934 Act or the corresponding
provisions of any future federal securities laws or regulations. All such books
and records shall be maintained and held by The Travelers or by any person on
behalf of The Travelers on behalf of and as agent for the Distributor, whose
property they are and shall remain. Such books and records shall be at all times
subject to inspection by the SEC in accordance with Section 17(a) of the 1934
Act. The Travelers shall have access to all records maintained in connection
with the Contracts.

(b) The Travelers, as agent for the Distributor, shall confirm
to each purchaser of a Contract, in accordance with Rule 10b-10 under the 1934
Act, acceptance of premiums and such other transactions as are required by and
in accordance with Rule 10b-10 and administrative interpretations thereunder.

4. Reports.

(a) The Distributor shall cause The Travelers and each
Separate Account to be furnished with such reports as either or both may
reasonably request for the purpose of meeting reporting and record keeping
requirements under the 1933 Act, the 1934 Act, and the 1940 Act and rules
thereunder, as well as the insurance laws of the State of Connecticut and any
other applicable states or jurisdictions.

(b) The Distributor and The Travelers shall submit to all
regulatory and administrative bodies having jurisdiction over the present and
future operations of each Separate Account, any information, reports, or other
material which any such body by reason of this Agreement may request or require
pursuant to applicable laws or regulations.

5. Maintaining Registration and Approvals. The Travelers shall be
responsible for maintaining the registration of the Contracts with the SEC and
any state securities regulatory authority with which such registration is
required, and for gaining and maintaining approval of the Contract forms where
required under the insurance laws and regulations of each state or other
jurisdiction in which the Contracts are to be offered.

6. Issuance and Administration of Contracts. The Travelers shall be
responsible for issuing the Contracts and administering the Contracts and each
Separate Account and a Travelers affiliated broker-dealer shall have full
responsibility for the securities activities of all persons employed by The
Travelers, engaged directly or indirectly in the Contract operations, and for
the training, supervision, and control of such persons to the extent of such
activities.

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<PAGE> 4
7. Non-Exclusivity. The Travelers and each Separate Account agree that
the services to be provided by the Distributor hereunder are not to be deemed
exclusive and the Distributor is free to act as distributor of other variable
insurance products or investment company shares.

8. Affiliated Persons. It is understood that any Contract owner or
agent of each Separate Account may be a Contract owner, shareholder, director,
officer, employee, or agent of, or be otherwise interested in, the Distributor,
any affiliated person of the Distributor, any organization in which the
Distributor may have an interest or any organization which may have an interest
in the Distributor; that the Distributor, any such affiliated person, or any
such organization may have an interest in each Separate Account and that the
existence of any such dual interest shall not affect the validity hereof or any
transaction thereunder except as may otherwise be provided in the articles of
organization or by-laws of the Distributor or by specific provisions of
applicable law.

9. Indemnification.

(a) By The Travelers. The Travelers on its behalf and on
behalf of each Separate Account shall indemnify and hold harmless the
Distributor and any officer, director, or employee of the Distributor against
any and all losses, claims, damages, or liabilities, joint or several (including
any investigative, legal, and other expenses reasonably incurred in connection
with, and any amounts paid in settlement of, any action, suit, or proceeding or
any claim asserted), to which the Distributor and/or any such person may become
subject, under any statute or regulation, any NASD rule or interpretation, at
common law or otherwise, insofar as such losses, claims, damages, or
liabilities:

(i) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, in light of the circumstances in which they
were made, contained in any registration statement or in any prospectus for the
Contracts; provided that The Travelers shall not be liable in any such case to
the extent that such loss, claim, damage, or liability arises out of, or is
based upon, an untrue statement or alleged untrue statement or omission or
alleged omission made in reliance upon information furnished in writing to The
Travelers by the Distributor specifically for use in the preparation of any such
registration statement or any amendment thereof or supplement thereto; or

(ii) result from any breach by The Travelers of any provision
of this Agreement.

This indemnification agreement shall be in addition to any liability that The
Travelers may otherwise have; provided, however, that no person shall be
entitled to indemnification pursuant to this provision if such loss, claim,
damage, or liability is due to the willful misfeasance, bad faith, gross
negligence, or reckless disregard of duty by the person seeking indemnification.

(b) By The Distributor. The Distributor shall indemnify and
hold harmless The Travelers on its behalf and on behalf of each Separate Account
and any officer, director, or

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<PAGE> 5
employee of The Travelers or each Separate Account against any and all losses,
claims, damages, or liabilities, joint or several (including any investigative,
legal, and other expenses reasonably incurred in connection with, and any
amounts paid in settlement of, any action, suit, or proceeding or any claim
asserted), to which The Travelers and/or any such person may become subject
under any statute or regulation, any NASD rule or interpretation, at common law
or otherwise, insofar as such losses, claims, damages, or liabilities:

(i) arise out of or are based upon any untrue statement or
alleged untrue statement of a material fact or omission or alleged omission to
state a material fact required to be stated therein or necessary in order to
make the statements therein not misleading, in light of the circumstances in
which they were made, contained in any registration statement or in any
prospectus for the Contracts; in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon information furnished in writing by
the Distributor to The Travelers specifically for use in the preparation of any
such registration statement or any amendment thereof or supplement thereto; or

(ii) result from any breach by the Distributor of any
provision of this Agreement; or

(iii) result from the Distributor's own misconduct or
negligence.

This indemnification agreement shall be in addition to any liability
that the Distributor may otherwise have; provided, however, that no person shall
be entitled to indemnification pursuant to this provision if such loss, claim,
damage, or liability is due to the willful misfeasance, bad faith, gross
negligence, or reckless disregard of duty by the person seeking indemnification.

(c) General. Promptly after receipt by a party entitled to
indemnification ("indemnified person") under this Paragraph 9 of notice of the
commencement of any action as to which a claim will be made against any person
obligated to provide indemnification under this Paragraph 9 ("indemnifying
party"), such indemnified person shall notify the indemnifying party in writing
of the commencement thereof as soon as practicable thereafter, but failure to so
notify the indemnifying party shall not relieve the indemnifying party from any
liability which it may have to the indemnified person otherwise than on account
of this Paragraph 9. The indemnifying party will be entitled to participate in
the defense of the indemnified person but such participation will not relieve
such indemnifying party of the obligation to reimburse the indemnified person
for reasonable legal and other expenses incurred by such indemnified person in
defending himself or itself.

The indemnification provisions contained in this Paragraph 9 shall
remain operative in full force and effect, regardless of any termination of this
Agreement. A successor by law of the Distributor or The Travelers, as the case
may be, shall be entitled to the benefits of the indemnification provisions
contained in this Paragraph 9.

10. Regulation. This Agreement shall be subject to the provisions of
the 1933 Act, the 1934 Act, and the 1940 Act and the rules, regulation, and
rulings thereunder, and of the NASD, as in effect from time to time, including
such exemptions and other relief as the SEC, its

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<PAGE> 6
staff, or the NASD may grant, and the terms hereof shall be interpreted and
construed in accordance therewith.

11. Investigation and Proceedings.

(a) Each party hereto shall advise the other promptly of (i)
any action of the SEC or any authorities of any state or territory, of which it
has knowledge, affecting registration or qualification of each Separate Account
and the Contracts, or the right to offer the Contracts for sale, and (ii) the
happenings of any event that makes untrue any statement or which requires the
making of any change, in the registration statement or prospectus for the
Contracts in order to make the statements therein not misleading.

(b) The Travelers, each Separate Account, and the Distributor
agree to cooperate fully in any regulatory inspection, inquiry, investigation,
or proceeding or any judicial proceeding with respect to The Travelers, each
Separate Account, or the Distributor, their affiliates and their representatives
to the extent that such inspection, inquiry, investigation, or proceeding is in
connection with the Contracts distributed under this Agreement.

12. Duration and Termination of the Agreement.

(a) This Agreement shall become effective with respect to the
Contracts as of the date first written above, and shall continue in full force
and effect until termination or expiration. This Agreement may be amended at any
time by mutual agreement of the parties hereto.

(b) This Agreement shall continue in effect for two years from
the date of its execution, and thereafter from year to year, but only so long as
such continuance is specifically approved at least annually by (i) each Separate
Account's Board of Managers (the "Board"), or by a vote of the majority of the
outstanding voting securities of each Separate Account, and (ii) a vote of a
majority of those members of the Board who are not parties to this Agreement nor
interested persons of such parties, cast in person at a meeting called for the
purpose of voting on such approval.

(c) This Agreement may be terminated at any time for any
reason by either party upon 60 days' written notice to the other party, without
payment of any penalty. This Agreement may be terminated immediately at the
option of either party to this Agreement upon the other party's material breach
of any provision of this Agreement, unless such breach has been cured within 10
days after receipt of notice from the non-breaching party of such breach.

(d) This Agreement shall automatically terminate in the event
of its assignment. (The term "assigned" shall not include any transaction
exempted from Section 15(b)(2) of the 1940 Act).

(e) Upon termination of this Agreement, all authorizations,
rights and obligations shall cease except the obligation to settle accounts, and
the provisions contained in Paragraph 9 regarding indemnification agreements.

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<PAGE> 7
13. Rights, Remedies, etc. are Cumulative. The rights, remedies, and
obligations contained in this Agreement are cumulative and are in addition to
any and all rights, remedies, and obligations, at law or in equity, which the
parties hereto are entitled to under state and federal laws. Failure of either
party to insist upon strict compliance with any of the conditions of this
Agreement shall not be construed as a waiver of any of the conditions, but the
same shall remain in full force and effect. No waiver of any of the provisions
of this Agreement shall be deemed, or shall constitute, a waiver of any other
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver.

14. Interpretation. This Agreement constitutes the whole agreement
between the parties hereto with respect to the subject matter hereof, and
supersedes all prior oral or written understandings, agreements, or negotiations
between the parties with respect to such matter. No prior writing by or between
the parties with respect to the subject matter hereof shall be used by either
party in connection with the interpretation of any provisions of this Agreement.

15. Severability. This is a severable Agreement. In the event that any
provision of this Agreement would require a party to take action prohibited by
applicable federal or state law or prohibit a party from taking action required
by applicable federal or state law, then it is the intention of the parties
hereto that such provision shall be enforced to the extent permitted under the
law, and, in any event, that all other provisions of this Agreement shall remain
valid and duly enforceable as if the provision at issue had never been a part
hereof.

16. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original and all of which shall
be deemed one instrument.

17. Notices. All notices and other communications provided for
hereunder shall be in writing and shall be either hand-delivered, transmitted by
registered or certified United States mail with return receipt requested, or by
overnight mail by a nationally recognized courier. All notices shall be
effective upon delivery and shall be addressed as follows:

(a) If to The Travelers -

The Travelers Insurance Company
One Tower Square
Hartford, CT 01683
Attention: General Counsel

(b) If to the Separate Accounts

The Travelers Insurance Company, Separate Accounts
One Tower Square
Hartford, CT 06183
Attention: General Counsel

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(c) If to the Distributor -

CFBDS, Inc.
21 Milk Street
Boston, MA 02109
Attention:____________________

or to such other address as The Travelers, the Separate Accounts, or the
Distributor shall designate by written notice to the other parties.

18. Miscellaneous. Captions in this Agreement are included for
convenience or reference only and in no way define or limit any of the
provisions hereof or otherwise affect their construction or effect.

IN WITNESS WHEREOF, The Travelers, each Separate Account, and the
Distributor have caused this Agreement to be executed in their names and on
their behalf by and through their duly authorized officer on the day and year
first above written.

THE TRAVELERS INSURANCE COMPANY

Attest:____________________ By:___________________________________

Name:_________________________________
Title:________________________________

EACH OF THE SEPARATE ACCOUNTS
LISTED ON SCHEDULE A, ATTACHED HERETO.

Attest:____________________ By:___________________________________

Name:_________________________________
Title:________________________________

CFBDS, INC.

Attest:____________________ By:___________________________________

Name:_________________________________
Title:________________________________

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SCHEDULE A
TO THE

DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT

LIST OF SEPARATE ACCOUNTS

1. The Travelers Fund U for Variable Annuities

2. The Travelers Fund BD for Variable Annuities

3. The Travelers Fund BD III for Variable Annuities

4. The Travelers Fund ABD for Variable Annuities

5. The Travelers Separate Account QP for Variable Annuities

6. The Travelers Separate Account PF for Variable Annuities

7. The Travelers Separate Account TM for Variable Annuities

8. The Travelers Separate Account Five for Variable Annuities

9. The Travelers Separate Account Seven for Variable Annuities

10. The Travelers Fund UL for Variable Life Insurance

11. The Travelers Variable Life Insurance Separate Account Three

12. The Travelers Variable Life Insurance Separate Account Four

13. The Travelers Separate Account MGA

<PAGE> 1
EXHIBIT 3(b)

FORM OF
SELLING AGREEMENT

THIS AGREEMENT is made among The Travelers Insurance Company ("TIC"), The
Travelers Life and Annuity Company ("TLAC") (collectively the "Insurance
Companies"), CFBDS, Inc. ("Underwriter") and ___________ ("Broker/Dealer"),
together with its affiliated insurance agencies (collectively the "Selling
Entities") as are specified on the Selling Agreement Schedule Pages attached to
this agreement as Exhibit 1 (the "Schedule Pages").

In consideration of the mutual promises contained in this agreement, the parties
agree as follows:

1. Purpose and Background. The Underwriter, the Insurance Companies,
Broker/Dealer and Selling Entities enter into this agreement for the purpose of
authorizing Broker/Dealer and Selling Entities through certain of their
insurance licensed agents to solicit applications for such life insurance,
annuity contracts, long term care insurance contracts and such other insurance
products as shall be mutually agreed upon (collectively the "Insurance
Policies") as are listed on the Schedule Pages. The Schedules Pages may be
amended from time to time to add other Insurance Policies and to note any
additional insurance agency affiliates.

2. Licensing and Appointment. The Insurance Companies have each respectively
appointed Underwriter to serve as the distributor and principal underwriter of
the variable life or variable annuity Insurance Policies. The Underwriter is
registered with the SEC, the National Association of Securities Dealers, Inc.
("NASD") and all appropriate state securities regulatory authorities as a
broker/dealer.

The Underwriter hereby appoints the Broker/Dealer to distribute the variable
Insurance Policies listed on the Schedule Pages through its validly insurance
licensed representatives ("Registered Representatives").

3. Securities Licensing/NASD Compliance. Broker/Dealer shall at all times when
performing its functions under this agreement, be registered as a securities
broker with the SEC and NASD and licensed or registered as a securities
broker/dealer in the states and other local jurisdictions that require such
licensing or registration in connection with sales of variable products.

Broker/Dealer agrees to abide by all applicable state and federal rules and
regulations promulgated thereunder. For the purpose of compliance with any such
laws or regulations, Broker/Dealer acknowledges and agrees that in performing
Broker/Dealer services covered by this Agreement, it is acting in the capacity
of an independent broker and dealer, as defined by the By-Laws of the NASD, and
not as an agent or employee of either Underwriter or any registered investment
company.

4. Insurance Licensing. Broker/Dealer and Selling Entities represent that at all
times when performing their functions under this agreement, each of them shall
be validly licensed as an insurance agency in the states and other jurisdictions
that require such licensing or registration in connection with sales or
solicitation of the Insurance Policies. Broker/Dealer represents that the
Selling Entities are properly authorized as required under applicable state law
to receive insurance commissions generated from sales of the Insurance Policies.

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5. Selling Entities; Sale and Solicitation of Variable Insurance Products

Broker/Dealer and Selling Entities each represent that they will engage in the
solicitation and sale of Insurance Policies in accordance with applicable
securities laws and regulations. In this regard, Broker/Dealer may have
established affiliation agreements with each of the Selling Entities pursuant to
which such agencies may receive commissions from the sale of variable insurance
products.

In this process, Broker/Dealer represents that each Selling Entity is an
associated person as that term is defined under Section 3(a)(18) of the
Securities Exchange Act of 1934, as amended. Broker/Dealer further represents
that it will maintain supervision and control over the activities of each
Registered Representative appointed by a Selling Entity engaged in the
solicitation and sales of Insurance Policies pursuant to this agreement.

Broker/Dealer will ensure that each Selling Entity designated to receive
commissions on behalf of Broker/Dealer will be licensed as required to receive
commissions for the sale of variable products in each applicable state.
Additionally, Broker/Dealer represents that individuals who are not properly
licensed under securities laws and regulations will not engage in any way in the
solicitation or sale of variable Insurance Policies.

Broker/Dealers agrees that it will maintain such books and records (including
but not limited to FOCUS reports) as are necessary to comply with the rules of
the NASD or other self-regulatory organizations.

6. Appointment of Broker/Dealer and Selling Agencies. The Insurance Companies
(and with respect to any variable life insurance or annuity product,
Underwriter) hereby authorize the Broker/Dealer and the Selling Entities to sell
those Insurance Policies listed on the Schedule Pages, as such pages may be
amended from time to time, including the variable Insurance Policies through its
validly appointed and licensed Registered Representatives. Broker/Dealer is also
appointed to perform certain administrative services necessary to facilitate the
solicitation and sales of the variable Insurance Policies.

Selling Entities are each appointed general agencies of Insurance Companies and
each is authorized to sell the Insurance Policies listed on the Schedule Pages.

Pursuant to the appointments described in this Section 6, Broker/Dealer and
Selling Entities must comply with the following requirements:

(a) All securities services provided in connection with the sale of
variable Insurance Policies will be through Broker/Dealer and its Registered
Representatives;

(b) All individuals soliciting sales of Insurance Policies will be
properly licensed and appointed to the Insurance Companies as required in
accordance with the state insurance laws of those jurisdictions in which the
Insurance Policies are distributed;

(c) Unregistered employees will not engage in any securities activities,
nor receive any compensation based on transactions in insurance securities or
the provision of securities advice;

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(d) Broker/Dealer will maintain books and records relating to transactions
in insurance securities at its home office;

(e) Customers purchasing variable Insurance Policies will make their
checks payable to Insurance Companies unless a netting agreement has been
entered into;

For the purpose of compliance with any applicable state insurance laws or
regulations promulgated under them, Broker/Dealer and the Selling Entities
acknowledge and agrees that solely in performing the insurance-selling functions
reflected by this Agreement, they or the Registered Representative are acting as
the agent of the Insurance Companies, and in that capacity is authorized only to
solicit applications from the public for the Insurance Policies.

7. Responsibility for Registered Representatives Activities. Broker/Dealer and
Selling Entities. will select and supervise persons whom it will train to
solicit applications for the Insurance Policies in conformance with applicable
state and federal laws and regulations. Persons engaged in the sale of variable
Insurance Policies will be registered representatives of Broker/Dealer in
accordance with the rules of the NASD. All individuals soliciting sales of
Insurance Policies will be properly licensed and appointed to the Insurance
Companies in accordance with the state insurance laws of those jurisdictions in
which the Insurance Policies may lawfully be distributed.

The Insurance Companies shall have authority to determine whether to appoint or
terminate a particular registered representative of the Broker Dealer as an
insurance agent of the Insurance Companies. Broker/Dealer agrees to cooperate in
supplying information or making recommendations necessary to complete such
insurance agent appointments.

Additionally, Broker/Dealer represents and warrants that it has reviewed the
"General Recommendation Letter" set forth as Exhibit 1 to this Agreement and
that all of the information contained in the General Recommendation Letter is
true for each of its agents for whom it seeks appointment. Should Broker/Dealer
become aware of any information which would contradict the representations
contained in the General Letter of Recommendation for any of its Registered
Representatives who the Insurance Companies have appointed, it will promptly
provide such information to the Insurance Companies.

Broker/Dealer further represents and warrants that each of its Registered
Representatives who have been appointed by the Insurance Companies will continue
to meet the requirements set forth in the General Letter of Recommendation.

In jurisdictions which require that Insurance Companies perform background
information prior to appointment, Broker/Dealer agrees to provide such
information as may be necessary to perform such review, including but not
limited to obtaining permission from each Registered Representative who seeks
such appointment.

Upon request by Underwriter, Broker/Dealer and/or any such Selling Entities
shall furnish such appropriate records as may be necessary to establish
supervision of its Registered Representatives in connection with sales of the
Insurance Policies. Upon Underwriter's review of such supervisory materials,
Broker/Dealer shall make such changes to its registered representatives' rules
of conduct as

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Underwriter may reasonably request but only to the extent that such requests
relate to sales of the Insurance Policies.

Broker/Dealer shall notify Underwriter if any Registered Representative ceases
to be a registered representative of Broker/Dealer or ceases to maintain the
proper licensing required for the sale of the Insurance Policies or fails to
meet material rules and standards imposed by either Broker/Dealer or the Selling
Entities.

8. Suitability of Sales of Contract. Broker/Dealer will review all contract and
policy applications for suitability, completeness, and correctness as to form.
Broker/Dealer shall also be responsible for ensuring compliance with NASD
suitability rules and standards applicable to purchases of the Insurance
Policies and that all sales are in compliance with applicable laws and
regulations.

Broker/Dealer will promptly, but in no case later than the end of the business
day that Broker/Dealer receives applications and payment, forward to the
applicable Insurance Company, at addresses provided, all such applications found
suitable and in good form, together with any payments received with such
applications. Broker/Dealer will immediately return to the applicant all
applications deemed by Broker/Dealer to be unsuitable together with any payments
received therewith. The Insurance Companies reserve the right to reject any
Insurance Product application and return any payment made in connection with an
application which is rejected. Insurance Policies issued will be forwarded to
Broker/Dealer, or at the direction of Broker/Dealer, to the Registered
Representative for delivery to the Contract Owner. Broker/Dealer shall obtain
and retain a written receipt for each Insurance Policy which it or its
Registered Representative delivers.

The parties acknowledge that sales and solicitations may, where consistent with
state insurance laws and regulations, be conducted either without an
application, or on a basis where an application is submitted subsequent to a
sale. If such sales procedures are permitted, Broker/Dealer agrees that it will
continue to be responsible for compliance with applicable laws concerning, among
other things, suitability and policy delivery requirements. Broker/Dealer agrees
to hold Underwriter harmless for any failure to follow such rules or
regulations.

9. Solicitation/Representatives Concerning the Contracts. Broker/Dealer will
perform the selling functions required by this Agreement in accordance with the
terms and conditions of any applicable prospectus(es). Broker/Dealer will make
only representations included in the prospectus or in any authorized
supplemental material. No sales solicitations, including the delivery of
supplemental sales literature or other such materials, shall occur, be delivered
to, or used with a prospective purchaser unless accompanied or preceded by
appropriate and then-current prospectus(es).

Any material prepared or used by Broker/Dealer or its Registered Representative,
which describes in whole or in part or refers by name or form to any of the
Insurance Policies or underlying funds or uses the name of the Insurance
Companies, Underwriter or the logos or service marks of any of them, or the
name, logos or service marks of any "Affiliated Company" of any of them, as that
term is defined in Section 2(a)(2) of the Investment Company Act of 1940, must
be approved by Underwriter in writing prior to any such use.

Broker/Dealer and Selling Entities acknowledge that information pertaining to
Underwriter and Insurance Companies is proprietary in nature. Selling Entities
agree that they will not disclose any

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<PAGE> 5
information concerning Insurance Companies or Underwriter's products, services
or programs to any person for consideration or otherwise unless Broker/Dealer
and/or Selling Entities consent to such use in writing. Broker/Dealer and
Selling Entities agree that, following the termination of this Agreement for any
reason, they will not enter into any plan, program scheme or course of action
which would systematically attempt to induce any Contract owner(s) away from
Insurance Companies, except that Broker/Dealer may always recommend a move to
another company's product if such move would be more suitable than Insurance
Companies' product for a particular client or clients or in the event of a
detrimental change in the financial stability of Insurance Companies which
Broker/Dealer believes would jeopardize their clients.

10 Client Information/Confidential Information: During the term of this
Agreement Insurance Companies and Underwriter will have access to confidential
information ("Confidential Information"). Confidential Information includes, but
is not limited to, the names, addresses, telephone numbers and social security
numbers of Registered Representatives and of applicants for and purchasers of
Insurance Policies. Neither Underwriter nor either Insurance Company shall use,
copy or disclose such Confidential Information in any systematic manner, except
as required to perform services under this Agreement. The parties acknowledge
that the Insurance Companies may continue to service the Insurance Policies sold
pursuant to this agreement, including, as appropriate, to accept additional
contributions and premium for and to modify, add, or exchange coverage to the
Insurance Policy of a policyowner who purchased from an agent of the Selling
Entities.

The parties also understand that Insurance Companies and/or Underwriter may
respond to policyowners inquiries concerning other Insurance Company products
and services. The parties also agree that this Section 10 shall not apply to
individuals with whom the Underwriter or Insurance Companies have a pre-existing
relationship. Similarly, the parties understand that Broker/Dealer and Selling
Entities may have access to trade secrets belonging to the Insurance Companies
and the Underwriter. Broker/Dealer agrees that it will not use or disclose such
trade secrets without the written permission of the Insurance Companies and/or
the Underwriter as the case may be.

11. Compensation. Compensation payable to Broker/Dealer on sales of the
Insurance Policies sold by Registered Representatives will be paid to the
Selling Entity Broker/Dealer designates, in accordance with the compensation
schedule(s) set forth on the Schedule Pages. Such Schedule Pages may be amended
from time to time and compensation will be paid in accordance with the
compensation schedule in effect at the time the premium payments are received by
the applicable Insurance Company (in the case of annuities) or at the time the
applications are received (in the case of life insurance). The Insurance
Companies and Underwriter reserve the privilege of revising the compensation
schedules set forth in the Schedule Pages at any time with reasonable prior
written notice to Broker/Dealer.

12. Assignment of Agreement. This Agreement may not be assigned except by mutual
consent and will continue, subject to the termination by any party on written
notice to the other party, except that in the event Broker/Dealer ceases to be a
registered Broker/Dealer or a member of the NASD, this Agreement will
immediately terminate. Underwriter reserves the right to designate, at its sole
discretion, an alternative Principal Underwriter for the distribution of the
Contracts covered by this Agreement with thirty (30) days prior written notice
to Broker/Dealer, except in the event that TIC replaces Underwriter as discussed
below.

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The parties understand that if TIC replaces Underwriter any such substituted
party will automatically assume all of Underwriter's rights and duties under
this agreement. TIC may assume such functions itself, or assign these to
affiliated, properly licensed broker-dealers. TIC will notify Broker/Dealer if
any such substitution occurs.

13. Indemnification. No party to this Agreement will be liable for any
obligation, act or omission of the other. Each party to this Agreement will hold
harmless and indemnify the (1) Registered Investment Companies which are used to
fund the Contracts, (2) Insurance Companies, (3) Underwriter, (4) Broker/Dealer,
and (5) Selling Entities, as appropriate, for any loss or expense suffered as a
result of the violation or noncompliance by any party to this agreement of any
of the terms of this agreement or of any applicable law or regulation. No party
nor any of its employees or agents will be liable to the other party for any
direct, special or consequential damages arising out of or in connection with
the performance of any services pursuant to the Agreement. Each party to this
agreement agrees to indemnify and hold harmless any other affected party for any
losses, claims, damages or liabilities (or actions in respect thereof) which
arise out of or are based on any untrue statement or alleged untrue statement of
a material fact required to be stated or necessary to make the statements made
not misleading in the connection with the solicitation, sale, or administration
of the of the Insurance Policies.

14. Notices. All notices to the Insurance Companies or Underwriter relating to
this Agreement should be sent to the attention of :

Travelers Life & Annuity
One Tower Square
Hartford, CT 06183-6091
Attention: General Counsel

All notices to Broker/Dealer will be duly given if mailed or faxed to the
address provided to Insurance Companies by Broker/Dealer from time to time.

15. Independent Contractors. Underwriter and Insurance Companies are
independent contractors with respect to Broker/Dealer, Selling Entities, and
to Registered Representatives.

16. Governing Law. This Agreement shall be construed in accordance with and
governed by the laws of the state of Connecticut.

17. Amendment of Agreement. Except as provided in this section, the terms of
this agreement may not be amended except by the written agreement of all parties
hereto. Notwithstanding the requirement that any amendment to this agreement be
in writing, the parties agree that Underwriter reserves the right to amend this
Agreement at any time, and the submission of an application by Broker/Dealer
after notice of any such amendment has been sent to the other parties shall
constitute the other parties' agreement to any such amendment. The parties also
agree that Insurance Companies may amend the Compensation Schedules attached to
Exhibit 1 of this agreement at any time upon reasonable notice in writing to the
Broker/Dealer and Selling Entities. Following provision of notice of a change in
compensation schedules, submission of additional business shall operate to
ratify acceptance of such schedules.

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<PAGE> 7
18. Termination. This Agreement may be terminated, without cause, by any party
upon thirty (30) days' prior written notice, and may be terminated, for failure
to perform satisfactorily or other cause, by any party immediately; and shall be
terminated if Broker/Dealer shall cease to be a registered Broker/Dealer under
the Securities Exchange Act of 1934, as amended, or a member of the NASD.
Notwithstanding, the following sections shall survive any such termination:
Sections 7, 9, 10 11, 13, 16, 19, 20, and 21.

19. Waiver Upon Termination. Failure of any party to terminate this Agreement
for any of the causes set forth in this agreement will not constitute a waiver
of the right to terminate this Agreement at a later time for any of these
causes.

20. Books and Records. Broker/Dealer shall maintain all books and records
required by applicable laws and regulations in connection with the offer and
sale of the Insurance Policies. The books, accounts and records of Broker/Dealer
relating to the sale of the Insurance Policies shall be maintained so as to
clearly and accurately disclose the nature and details of all transactions.
Underwriter and Insurance Companies reserve the right to request reasonable
periodic inspection of such books and records as relate to the sale and
solicitation of the Insurance Products.

21. Cooperation with Regulatory Investigations. Broker/Dealer, Selling Entities
and Underwriter and Insurance Companies agree to cooperate fully in any
insurance, securities or other regulatory investigation, inquiry, inspection, or
proceeding or in any judicial proceeding arising in connection with the
Insurance Policies. Broker/Dealer and Underwriter shall cooperate with each
other to resolve any customer complaint, and each agrees to promptly notify the
other upon receipt of notice of any investigation, claim, or proceeding
involving the Insurance Policies or any situation which would materially affect
the respective party's ability to perform its obligations hereunder. Each of the
parties to this agreement agrees that it will promptly notify the other parties
of any material claim of which it becomes aware involving the sale or
solicitation of the Insurance Policies.

22. Fidelity Bond. Broker/Dealer represents that all of its directors, officers,
employees and Registered Representatives are and shall be continuously covered
by a blanket fidelity bond, covering for larceny and embezzlement, issued by a
reputable bonding company. This bond shall be maintained at Broker/Dealer's
expense and shall be, at least, of the form, type and amount required under the
NASD Rules of Fair Practice.

23. Counterparts. This Agreement may be executed in one or more counterpart,
each of which shall be deemed in all respects an original.

24. Arbitration. Broker/Dealer, Selling Entities and Underwriter and Insurance
Companies agree that any dispute or claim arising out of the terms of this
Agreement shall be submitted and settled in accordance with the Code of
Arbitration Procedure of the NASD.

7
<PAGE> 8
In reliance on the representations set forth and in consideration of the
undertakings described herein, the parties represented below do hereby contract
and agree. This agreement is effective ____________, 199_.

The Travelers Insurance Company The Travelers Life &
Annuity Company

By:______________________________ By:_____________________________
Title:___________________________ Title:__________________________
Date:____________________________ Date:___________________________

CFBDS, Inc. ________________________________
(Broker/Dealer)

_________________________________ ________________________________
(Insurance Agency) (Insurance Agency)

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<PAGE> 9
Exhibit 1
Selling Agreement Schedule Page

Broker/Dealer and Selling Entities are authorized to solicit applications for
the life insurance policies, annuity contracts, long term care contracts, and
the other insurance products listed below:

I. Life Insurance
Portfolio Architect Variable Life
Market Life Variable Life
MVP Universal Life
Special T Term Life
Travelers Survivorship Life
Travelers Survivorship Life 2

II. Annuity
Travelers Portfolio Architect Variable Annuity
Travelers Universal Annuity
Single Premium Immediate Annuity (SPIA)
T-Mark
Travelers Target Maturity Annuity
Travelers Index Annuity
Travelers Vintage
Travelers Portfolio Architect Access
Travelers Marquis
Travelers Retirement Variable Annuity
Premier Adviser Asset Manager

III. Long Term Care
Travelers LTC3
Travelers LTC4

All products described herein are subject to state availability. Compensation
Schedules and additional terms for each product described above are listed on
the following pages. Consistent with the terms of this Agreement, Compensation
Schedules may be changed at any time.

Payment of compensation for any product is subject to the following conditions
and limitations, in addition to any applicable provision of the Selling
Agreement.

1. Chargebacks of Commissions. If the Insurance Companies return all or a
portion of a premium paid with respect to an Insurance Product, Broker/Dealer
shall be obligated to refund to Underwriter applicable commissions on the amount
of such premium only where:

(a) consistent with the Selling Agreement, the Insurance Product solicited
is returned as not taken under the policy "free look" provisions;

(b) premiums are refunded due to overpayments, errors in billing or in the
timing of automatic premium collection deductions, or errors resulting in policy
reissue;

9
<PAGE> 10
(c) the check delivered in payment of any contract premium does not clear
and the premium collection deductions, or errors resulting in policy reissue;

(d) the Insurance policy on which commission payments were made is
terminated or premium is refunded because the Registered Representative(s) or
Broker-Dealer who sold the Insurance Policy committed an act, error or omission
which materially contributed to the termination of the Insurance Policy or the
need to return premium;

(e) the issuing Insurance Company rejects the application;

(f) a judicial or regulatory authority directs the issuing Insurance
Company to return premium payments without assessment of a surrender charge;

(g) the applicant's initial premium on a 1035 exchange is returned because
the expected rollover amount from another policy or contract is not transferred
due to the exchange not meeting the legal requirements to qualify for a tax-free
exchange;

(h) the issuing Insurance Company returns unearned premium on a life
insurance contract as required by the provisions of the policy;

(i) the issuing Insurance Company determines that it has a legal liability
to return premiums on a life insurance contract within the first year after the
Insurance Product is issued; or

(j) the issuing Insurance Company and Broker/Dealer mutually agree to
return all or a portion of a premium with respect to a particular contract or
policy.

2. Free Look Provision. If any Contract or Policy is redeemed at any time or if
within forth-five (45) days after confirmation by the Insurance Companies of any
premium payments credited to a Contract or Policy, that Contract is tendered for
full or partial surrender, or the life at risk thereunder dies, then, at the
option of the Insurance Companies or Underwriter, no commission will be payable
with respect to such premium payments and any commission previously paid for
said premium payments must be refunded to the applicable Insurance Company or
Underwriter as directed by Underwriter. Underwriter agrees to notify
Broker/Dealer with ten (10) business days after the request for repurchase or
redemption, or notification of death of the life at risk is received by the
applicable Insurance Company.

3. Rebating. If Broker/Dealer or any Registered Representative of Broker/Dealer
rebates or offers to rebate all or any part of a premium on an Insurance Policy
issued by the Insurance Companies in violation of applicable state insurance
laws or regulations, or if Broker/Dealer or any Registered Representative of
Broker/Dealer shall withhold any premium on an Insurance Policy issued by the
Insurance Companies, the same may be grounds for termination of this Agreement
by Underwriter. If Broker/Dealer induces or attempts to induce any Policy or
Contract Owner to relinquish an Insurance Policy except under circumstances
where there is reasonable grounds for believing the policy, contract or
certificate is not suitable for such person, Broker-Dealers right to receive any
compensation under this agreement shall cease and terminate.

10
<PAGE> 11
COMMISSION SCHEDULE FOR
ANNUITY CONTRACTS
A1

This Schedule is attached to and is made a part of the Agreement. In no event
will either TIC or TLAC be liable for the payment of any compensation with
respect to any solicitation made, in whole or in part, by any person not
appropriately licensed to conduct such activities.

The compensation arrangements described below shall govern commission payouts.
Commission will be paid in accordance with instructions received from
Broker/Dealer.

1. Commissions based on premium payments will be based only on premium
actually received and accepted by the Insurance Companies.

2. No commission will be earned on the initial exchange of any TIC or TLAC
contract. Subsequent premium payments will, as permitted by law be
eligible for commission payments.

3. The Insurance Companies reserve the right to reduce first year commissions
and renewal commissions if necessary, on any annuity contracts sold to
residents of any jurisdiction which imposes new, and/or additional premium
or similar taxes or charge. In such event, the Insurance Companies will
notify Broker/Dealer.

4. If, within forty-five (45) days (one year for Tax Sheltered Annuities)
after confirmation of any premium credited to any Annuity Contract by
either of the Insurance Companies, the Annuity contract is canceled or
surrendered, or if the Annuitant shall die, then, at the option of the
Company, no commissions will be payable with respect to that premium and
any commission previously paid on that premium must be refunded to the
Company.

Compensation is listed by annuity product as follows:

11
<PAGE> 12
EXHIBIT 2
GENERAL LETTER OF RECOMMENDATION

Broker/Dealer("we") hereby represent and warrants to The Travelers Insurance
Company and The Travelers Life and Annuity Company (collectively "Travelers
Insurance Companies") that all the following requirements will be fulfilled in
conjunction with the submission of licensing/appointment papers for all
applicants as sub-agents submitted by Broker/Dealer. Broker/Dealer will, upon
request, forward proof of compliance with same to Travelers Insurance Companies.

1. We have made a thorough and diligent inquiry and investigation relative
to each applicant's identity, residence and business reputation and declare that
each applicant is personally known to us, has been examined by us, is known to
be of good moral character, has a good business reputation, is reliable, is
financially responsible and is worthy of appointment by Insurance Companies.
Each individual is trustworthy, competent and qualified to act as an agent for
Travelers Insurance Companies to hold himself out in good faith to the general
public. Broker/Dealer will notify Travelers Insurance companies of any applicant
who has been discharged from bankruptcy within three years preceding the date of
application.

2. We have on file a B-300, B-301, or U-4 form which was completed by each
applicant. We have fulfilled all the necessary investigative requirements for
the registration of each applicant as a registered representative through our
NASD member firm, and each applicant is presently registered as an NASD
registered representative.

The above information in our files indicates no fact or condition
which would disqualify the applicant from receiving a license and all the
findings of all investigative information is favorable.

3. We certify that all education requirements have been met for the
specific state each applicant is requesting a license in, and that, all such
persons have fulfilled the appropriate examination, education and training
requirements.

4. If the applicant is required to submit his picture, his signature, and
securities registration in the state in which he is applying for a license, we
certify that those items forwarded to Travelers Insurance Companies are those of
the applicant and the securities registration is a true copy of the original.

5. We hereby warrant that the applicant is not applying for a license with
Travelers Insurance Companies in order to place insurance chiefly and solely on
his life or property, lives or property of his relatives, or property or
liability of his associates.

6. We certify that each applicant will receive close and adequate
supervision, and that we will make inspection when needed or any or all risks
written by these applicants, to the end that the insurance interest of the
public will be properly protected.

7. We will be responsible for all acts and omissions of each applicant
within the scope of his agency appointment during any period of a temporary
license and a permanent license. This

12
<PAGE> 13
responsibility is full and complete without regard to any technical distinction
between this relationship and that which exists in law between principal and
agent.

8. We will not permit any applicant to transact insurance as an agent
until duly licensed therefore. No applicants have been given a contract or
furnished supplies, nor have any applicants been permitted to write, solicit
business, or act as an agent in any capacity, and they will not be so permitted
until the certificate of authority or license applied for is received.

<PAGE> 1

THE TRAVELERS INSURANCE COMPANY - ONE TOWER SQUARE -
HARTFORD, CONNECTICUT - 06183

A STOCK COMPANY

We are pleased to provide you the benefits of this Variable
Annuity Contract. Please read your contract and all attached forms
carefully.

RIGHT TO EXAMINE THIS CONTRACT

IF THIS CONTRACT IS RETURNED TO US AT OUR OFFICE OR TO OUR
AGENT TO BE CANCELLED WITHIN 20 DAYS AFTER ITS DELIVERY TO
YOU, WE WILL PAY YOU THE CONTRACT VALUE DETERMINED AS OF
THE NEXT VALUATION DATE AFTER WE RECEIVE THE WRITTEN
REQUEST AT OUR OFFICE, PLUS ANY PREMIUM TAX CHARGES OR
CONTRACT CHARGES PAID. AFTER THE CONTRACT IS RETURNED, IT
WILL BE CONSIDERED AS NEVER IN EFFECT.

This contract is issued in consideration of the purchase payment.
It is subject to the terms and conditions stated on the attached
pages, all of which are a part of it.

Executed at Hartford, Connecticut

/s/ M.A. CARPENTER

Chairman

This is a legal contract between you and us. READ YOUR CONTRACT CAREFULLY.

INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT
TAX QUALIFIED
LIFE ANNUITY COMMENCING AT MATURITY DATE

ELECTIVE OPTIONS NON-PARTICIPATING

ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.

L-14539 TIC Ed. 01-96

<PAGE> 2
TABLE OF CONTENTS

Right to Examine this Contract Cover Page

Contract Specifications Page 3

Definitions Page 5

Owner, Beneficiary and Annuitant Provisions Page 6

Purchase Payment and Valuation Provisions Pages 7-9

Death Benefit Provisions Page 10

Settlement Provisions Pages 11-13

General Provisions Pages 14-15

Table of Values Page 16

Life Annuity Tables Pages 17-18

Any Riders or Endorsements follow the Life Annuity Tables.

L-14539 Page 2 TIC Ed. 01-96

<PAGE> 3
CONTRACT SPECIFICATIONS

OWNER JOHN DOE

ANNUITANT JOHN DOE

CONTRACT NUMBER SPECIMEN 12/01/95 CONTRACT DATE

MONTHLY LIFE ANNUITY 12/01/25 MATURITY DATE

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

PURCHASE PAYMENTS:

Minimum Initial Purchase Payment: $20,000
Minimum Subsequent Purchase Payment: $500
Maximum Purchase Payment: $1,000,000 unless we consent to a larger amount

FIXED ACCOUNT GUARANTEED INTEREST PERIODS: The initial rate for any deposit is
guaranteed for one year from date of deposit. Subsequent renewal rates will be
guaranteed for the calendar quarter.

TRANSFER CHARGE: $0.00

You may transfer up to 15% of the Fixed Account value to any of the Sub-Accounts
twice a year during the 30 days following the semi-annual Contract Date
anniversary.

AMOUNTS DEDUCTED ON SURRENDER: 0%

CONTRACT CHARGE

$50.00, annually. This charge will be taken on the fourth Friday of August of
each year. This charge will be waived if your Contract Value is equal to or
greater than $75,000 on the date the charge would be taken. No contract charge
will be deducted from the Fixed Account.

UPON ANNUITIZATION, THE ASSUMED DAILY NET INVESTMENT FACTOR IS 1.000081 FOR ALL
SUB-ACCOUNTS.

DEATH BENEFIT
You have elected the Standard Death Benefit for this Contract; please see the
attached Standard Death Benefit Endorsement for a complete description of this
benefit.

TERMINATION

We reserve the right to terminate this contract when the Contract Value is less
than the Termination Amount of $1,000 and no purchase payments have been made
for at least two years.

L-14540DW 3 Asset Manager
TIC ED. 7-98

<PAGE> 4
SEPARATE ACCOUNT: THE TRAVELERS SEPARATE ACCOUNT SEVEN FOR VARIABLE ANNUITIES

FUNDING OPTIONS:

Morgan Stanley Universal Funds, Inc.:
Emerging Markets Equity Portfolio
Global Equity Portfolio
Mid Cap Value Portfolio
Value Portfolio
Van Kampen American Capital Life Investment Trust:
Domestic Income Portfolio
Emerging Growth Portfolio
Enterprise Portfolio
Government Portfolio
Growth and Income Portfolio
Money Market Portfolio
Morgan Stanley Real Estate Securities Portfolio
Salomon Brothers Variable Series Funds, Inc.:
Salomon Brothers Variable Capital Fund
Salomon Brothers Variable High Yield Bond Fund
Salomon Brothers Variable Investors Fund
Salomon Brothers Variable Strategic Bond Fund

For Contract Years 1-6, there is a Sub-Account Deduction of .0000438 for each
day in the Valuation Period.
For Contract Years 7 and thereafter, there is a Sub-Account Deduction of
.0000425 for each day in the Valuation Period.

Information about the Separate Account is provided in the prospectus for The
Travelers Separate Account Seven For Variable Annuities.

L-14540DW 4 Asset Manager
TIC ED. 7-98

<PAGE> 5
CONTRACT SPECIFICATIONS

OWNER JOHN DOE

ANNUITANT JOHN DOE

CONTRACT NUMBER SPECIMEN 12/01/95 CONTRACT DATE

MONTHLY LIFE ANNUITY 12/01/25 MATURITY DATE

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

PURCHASE PAYMENTS:

Minimum Initial Purchase Payment: $20,000
Minimum Subsequent Purchase Payment: $500
Maximum Purchase Payment: $1,000,000 unless we consent to a larger amount

FIXED ACCOUNT GUARANTEED INTEREST PERIODS: The initial rate for any deposit is
guaranteed for one year from date of deposit. Subsequent renewal rates will be
guaranteed for the calendar quarter.

TRANSFER CHARGE: $0.00

You may transfer up to 15% of the Fixed Account value to any of the Sub-Accounts
twice a year during the 30 days following the semi-annual Contract Date
anniversary.

AMOUNTS DEDUCTED ON SURRENDER: 0%

CONTRACT CHARGE

UPON ANNUITIZATION, THE ASSUMED DAILY NET INVESTMENT FACTOR IS 1.000081 FOR ALL
SUB-ACCOUNTS.

DEATH BENEFIT
You have elected the Enhanced Death Benefit for this Contract; please see the
attached Enhanced Death Benefit Endorsement for a complete description of this
benefit.

TERMINATION

We reserve the right to terminate this contract when the Contract Value is less
than the Termination Amount of $1,000 and no purchase payments have been made
for at least two years.

L-14540DWE 3 Asset Manager
TIC ED. 7-98

<PAGE> 6
SEPARATE ACCOUNT: THE TRAVELERS SEPARATE ACCOUNT SEVEN FOR VARIABLE ANNUITIES

FUNDING OPTIONS:

For Contract Years 1-6, there is a Sub-Account Deduction of .0000479 for each
day in the Valuation Period.
For Contract Years 7 and thereafter, there is a Sub-Account Deduction of
.0000425 for each day in the Valuation Period.

Information about the Separate Account is provided in the prospectus for The
Travelers Separate Account Seven For Variable Annuities.

L-14540DWE 4 Asset Manager
TIC ED. 7-98

<PAGE> 7
- --------------------------------------------------------------------------------
DEFINITIONS
- --------------------------------------------------------------------------------

(a) ACCOUNT(s) - the Sub-Accounts and/or the Fixed Account under this
contract.

(b) ACCUMULATION UNIT - an accounting unit of measure used to calculate
the value of this contract before Annuity payments begin.

(d) ANNUITANT - the person on whose life the Maturity Date and Annuity
payments depend.

(e) ANNUITY UNIT - an accounting unit of measure used to calculate the
amount of Annuity Payments.

(f) CODE - the Internal Revenue Code of 1986, as amended, and all related
laws and regulations which are in effect during the term of this
contract.

(g) CONTRACT DATE - the date on which the contract is issued.

(h) CONTRACT YEARS - twelve month periods beginning with the Contract
Date.

(i) DEATH REPORT DATE - the Valuation Date coincident with or next
following the day on which we have received 1) Due Proof of Death and
2) a Written Request for an election of a single sum payment or an
alternate Settlement Option as described in the contract.

(j) DUE PROOF OF DEATH - (I) a copy of a certified death certificate; (ii)
a copy of a certified decree of a court of competent jurisdiction as
to the finding of death; (iii) a written statement by a medical doctor
who attended the deceased; or (iv) any other proof satisfactory to us.

(k) FIXED ACCOUNT - an account that consists of all of the assets under
this contract other than those in the Separate Account.

(l) FUNDING OPTION - an open-end diversified management investment company
indicated in the CONTRACT SPECIFICATIONS, which serves as an
investment option under the Separate Account.

(m) MATURITY DATE - the date on which the Annuity payments are to begin.

(n) OUR OFFICE - the Home Office of The Travelers Insurance Company
or any other office which we may designate for the purpose of
administering this contract.

(o) RECORDED - a Written Request is recorded when the information is noted
in our file for this contract.

(p) SEPARATE ACCOUNTS - those Separate Accounts indicated in the CONTRACT
SPECIFICATIONS which we established for this class of contracts and
certain other contracts.

(q) SETTLEMENT OPTIONS - an Annuity or Income option elected under this
contract.

(r) SUB-ACCOUNT - that portion of the assets of a Separate Account which
is allocated to a particular Underlying Fund.

(s) TAX QUALIFIED CONTRACT - a contract used in a retirement plan or
program that is intended to qualify under Sections 401, 403, 408, or
414(d) of the Code.

(t) VALUATION DATE - a date on which a Sub-Account is valued.

(u) VALUATION PERIOD - the period between successive valuations.

(v) WE, US, OUR - The Travelers Insurance Company.

(w) WRITTEN REQUEST - written information including requests for contract
changes sent to us in a form and content satisfactory to us and
received at Our Office.

(x) YOU, YOUR - the Owner.

L-14541 5 TIC Ed. 01-96

<PAGE> 8
- --------------------------------------------------------------------------------
OWNER, BENEFICIARY AND ANNUITANT PROVISIONS
- --------------------------------------------------------------------------------

OWNER

This contract belongs to the owner shown on the CONTRACT SPECIFICATIONS. As
owner, you have sole power to exercise rights and receive benefits under this
contract during the Annuitant's lifetime. In order to maintain tax
qualification, this contract may not be sold, assigned, transferred, discounted
or pledged as collateral for a loan or as security for the performance of an
obligation or for any other purpose except as may be required or permitted under
applicable sections of the Code. We will administer this contract only as a Tax
Qualified Contract.

You will be the recipient of all payments while the Annuitant is alive unless
you direct them to an alternative recipient under a Recorded payment direction.
An alternative recipient under a payment direction does not become the owner. A
payment direction is revocable by you at any time by Written Request giving 30
days advance notice.

CREDITOR CLAIMS

To the extent permitted by law, no right or benefit of the owner, Annuitant or
Beneficiary under this contract shall be subject to the claims of creditors or
any legal process.

BENEFICIARY

The Beneficiary is the party named in a Written Request. The Beneficiary
receives any remaining contractual benefits upon the death of the Annuitant.

You may change or add a Beneficiary by Written Request during the lifetime of
the Annuitant and while this contract continues. Once a change of Beneficiary is
Recorded by us, it will take effect as of the date of the request, subject to
any payments made or other actions taken by us before the recording.

If no beneficiary has been named by you, or none survives when the Annuitant
dies, the interest of any Beneficiary will pass:

a. to the estate of the owner of a Tax Qualified Contract qualifying
under Section 408 of the Code, or to the estate of the owner of a
non-trusteed Tax Qualified Contract under other than Section 408 of
the Code; or

b. to the trustee or plan administrator of a trusteed Tax Qualified plan
contract for further distribution in accordance with the plan.

ANNUITANT

The Annuitant is the individual shown on the CONTRACT SPECIFICATIONS on whose
life the first Annuity payment is made. The Annuitant may not be changed after
the Contract Date except as may be provided under a provision of the tax law
qualification rider currently in effect for this contract.

L-14541 6 TIC Ed. 01-96

<PAGE> 9
- --------------------------------------------------------------------------------
PURCHASE PAYMENT AND VALUATION PROVISIONS
- --------------------------------------------------------------------------------

PURCHASE PAYMENTS

PURCHASE PAYMENT
Purchase payments are the payments you make for this contract and the benefits
it provides. An initial lump sum purchase payment must be made to the contract
and is due and payable before the contract becomes effective. Each purchase
payment is payable as shown on the CONTRACT SPECIFICATIONS to us at Our Office
or to one of our authorized representatives. No purchase payments after the
initial purchase payment are required to continue this contract in force, except
as provided in the "Termination" provision.

Net purchase payments are that part of your purchase payments applied to the
Contract Value. A net purchase payment is equal to the purchase payment less any
applicable premium tax charge.

ALLOCATION OF PURCHASE PAYMENTS
We will apply any net purchase payments to provide Accumulation Units of
selected Sub-Accounts and/or the Fixed Account of this contract. The initial
purchase payment will be applied within two business days following its receipt
at Our Office. Any subsequent purchase payments will be applied as of the next
valuation following receipt of those payments at Our Office. The net purchase
payment will be allocated to the Accounts in the proportion specified by you for
this contract. By Written Request, you may change your choice of Accounts or
allocation percentages. The available Funding Options to which Sub-Account
assets are allocated are shown on the CONTRACT SPECIFICATIONS; funds may be
subsequently added or deleted.

SUB-ACCOUNT VALUATION

NUMBER OF ACCUMULATION UNITS
The number of Accumulation Units to be credited to each Sub-Account once a
purchase payment has been received by us will be determined by dividing the net
purchase payment applied to that Sub-Account by the then Accumulation Unit Value
of that Sub-Account.

ACCUMULATION UNIT VALUE
The initial value of an Accumulation Unit for each Sub-Account was set at $1.00.
We determine the value of an Accumulation Unit in each Sub-Account on each
Valuation Date by multiplying the value on the immediately preceding Valuation
Date by the net investment factor for that Sub-Account for the Valuation Period
just ended.

The value of an Accumulation Unit on any date other than a Valuation Date will
be equal to its value as of the next Valuation Date.

NET INVESTMENT FACTOR
The net investment factor is a factor applied to measure the investment
performance of a Sub-Account from one Valuation Period to the next. The net
investment factor for a Sub-Account for any Valuation Period is equal to the sum
of 1.0000 plus the net investment rate.

Each Sub-Account's net investment rate for a Valuation Period is equal to the
gross investment rate for that Sub-Account, less the applicable Sub-Account
deduction for the Valuation Period.

All Sub-Account deductions are shown on the CONTRACT SPECIFICATIONS.

The gross investment rate of a Sub-Account for a Valuation Period is equal to
(1) divided by (2) where (1) is:

a. investment income, plus

b. capital gains and losses, whether realized or unrealized; less

c. a deduction for any tax levied against the Separate Account and its Funding
Options; and

(2) is the amount of the assets at the beginning of the Valuation Period.

The gross investment rate for a Sub-Account may be either positive or negative.
If a Sub-Account is invested in shares of a Funding Option, assets are based on
the net asset value of the Funding Option. Investment income includes any
distribution whose ex-dividend date occurs during the Valuation Period.

L-14541 7 TIC Ed. 01-96

<PAGE> 10
FIXED ACCOUNT VALUATION

NUMBER OF ACCUMULATION UNITS - We will determine the number of Accumulation
Units to be credited to the Fixed Account on receipt of a purchase payment by
dividing the net purchase payment applied to the Fixed Account by the then
dollar value of one Accumulation Unit Value of the Fixed Account.

ACCUMULATION UNIT VALUE - We determine the value of an Accumulation Unit in the
Fixed Account on any day by multiplying the value on the immediately preceding
day by the net interest factor for the day on which the value is being
determined.

NET INTEREST FACTOR - The net interest factor for any day is the guaranteed net
interest rate which is equivalent to an effective annual interest rate of 3.00%,
plus 1.0000. The method of crediting additional interest will be at our
discretion.

Interest is declared in advance. Before Annuity or Income payments begin, we may
credit the Fixed Account with annual interest rates higher than the minimum
guaranteed interest rate of 3.00%. Interest rates may be higher or lower than
the initial interest rates, but not less than the minimum guaranteed interest
rate of 3.00%. Additional amounts may be credited by us at our discretion for
the guaranteed interest periods shown on the CONTRACT SPECIFICATIONS.

TRANSFER BETWEEN ACCOUNTS

You may transfer all or any part of the Contract Value from one Sub-Account to
any other Sub-Account at any time up to 30 days before the due date of the first
Annuity or Income payment. Additionally, you may transfer a part of the Fixed
Account value to any of the Sub-Accounts, twice a year during the 30 days
following the semi-annual Contract Date Anniversary in the amount shown on the
CONTRACT SPECIFICATIONS.

Amounts may generally be transferred from the Sub-Accounts to the Fixed Account
at any time, up to 30 days before the due date of the first Annuity or Income
payment. Amounts previously transferred from the Fixed Account to the
Sub-Accounts may not be transferred back to the Fixed Account for a period of at
least 6 months from the date of transfer. We reserve the right to limit the
number of transfers from one Sub-Account to any other Sub-Account or to the
Fixed Account. We will not limit these transfers to less than one in any six
month period.

Transfers between Accounts will result in the addition or deletion of
Accumulation Units having a total value equal to the dollar amount being
transferred to or from a particular Account. The number of Accumulation Units
will be determined by using the Accumulation Unit Value of the Accounts involved
as of the next valuation after we receive notification of request for transfer.
Transfers will be subject to any applicable Transfer charge stated on the
CONTRACT SPECIFICATIONS.

CONTRACT VALUES

CONTRACT VALUE
The Contract Value of this contract on any date equals the sum of the
accumulated values in the Accounts. The accumulated value in an Account equals
the number of outstanding Accumulation Units credited to that Account,
multiplied by the then Accumulation Unit Value for that Account.

The Guaranteed Value of the Fixed Account equals the accumulated values of the
Fixed Account calculated by using the guaranteed net interest factor. The
Guaranteed Values of the Fixed Account are shown in the Table of Values.

CONTRACT CHARGE
A Contract Charge in the amount and for the period shown on the CONTRACT
SPECIFICATIONS will be deducted from the Contract Value to reimburse us for
administrative expenses relating to the contract. The Contract Charge will be
deducted by surrendering on a pro rata basis Accumulation Units from all
Sub-Accounts in which you have an interest.

We will deduct the charge on a pro rata basis if the contract has been in effect
for less than a full period on the date a Contract Charge is deducted. The
Contract Charge will also be prorated upon full surrender or termination of the
contract.

CASH SURRENDER
You may elect by Written Request to receive the Cash Surrender Value of this
contract before the due date of the first Annuity or Income payment and without
the consent of any Beneficiary unless irrevocably named. You may elect either a
full or partial surrender of the Cash Surrender Value. In the case of a full
surrender, this contract will be cancelled. A partial surrender will result in a
reduction in your Contract Value. If you have a balance in more than one
Account, your Contract Value will be reduced from all your accounts on a pro
rata basis, unless you request otherwise.

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<PAGE> 11
The Cash Surrender Value will be determined as of the next valuation following
receipt of your Written Request. We may delay payment of the Cash Surrender
Value of the Sub-Accounts for a period of not more than five days after we
receive your Written Request. We may delay payment of the Cash Surrender Value
of the Fixed Account for a period of not more than six months after we receive
your Written Request.

CASH SURRENDER VALUE
The Cash Surrender Value is equal to the Contract Value less any amounts
deducted on surrender which are shown on the CONTRACT SPECIFICATIONS, any
applicable premium tax not previously deducted, and any outstanding loan
balance.

The Guaranteed Cash Surrender Value of the Fixed Account equals the Guaranteed
Value of the Fixed Account less any amounts deducted on surrender which are
shown on the CONTRACT SPECIFICATIONS, less any applicable premium tax not
previously deducted and less any outstanding loan balance. For Guaranteed Cash
Surrender Values of the Fixed Account, see the Table of Values.

CONTRACT CONTINUATION

Except as provided in the "Termination" provision, this contract does not
require continuing purchase payments and will automatically continue as a
paid-up contract during the lifetime of the Annuitant until the Maturity Date or
until it is surrendered.

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<PAGE> 12
- --------------------------------------------------------------------------------
DEATH BENEFITS PROVISIONS
- --------------------------------------------------------------------------------

A death Benefit is payable to the Beneficiary upon the death of the Annuitant
before the Maturity Date. A death benefit is also payable under those Settlement
Options which provide for death benefits. We will pay the Beneficiary the death
benefit in a single sum as described below upon receiving Due Proof of Death. A
Beneficiary may request that a death benefit payable under this contract be
applied to a Settlement Option subject to the provisions of this contract.

DEATH PROCEEDS PRIOR TO THE MATURITY DATE

If the Annuitant dies before age 75 and before the Maturity Date, we will pay
the Beneficiary the greatest of a), b), or c) below, less any applicable premium
tax, prior surrenders not previously deducted or outstanding loans as of the
Death Report Date:

a. the Contract Value;

b. the total purchase payments under the contract; or

c. the death benefit value, which will be reset once every five years to
the then current Contract Value, immediately preceding the Death
Report Date.

If the Annuitant dies on or after age 75, but before age 85 and before the
Maturity Date, we will pay the Beneficiary the greatest of a), b), or c) below,
less any applicable premium tax, prior surrenders not previously deducted or
outstanding loans as of the Death Report Date:

a. the Contract Value;

b. the total purchase payments under the contract; or

c. the death benefit value, which will be reset once every five years to
the then current Contract Value, occurring on or before the
Annuitant's 75th birthday.

If the Annuitant dies on or after age 85 and before the Maturity Date, we will
pay the Beneficiary the Contract Value of this contract, less any applicable
premium tax or outstanding loans as of the Death Report Date.

DEATH PROCEEDS AFTER THE MATURITY DATE

If the Annuitant dies on or after the Maturity Date, we will pay the Beneficiary
a death benefit consisting of any benefit remaining under the Annuity or Income
option then in effect.

L-14541 10 TIC Ed. 01-96

<PAGE> 13
- --------------------------------------------------------------------------------
SETTLEMENT PROVISIONS
- --------------------------------------------------------------------------------

MATURITY DATE

The Maturity Date is shown on the CONTRACT SPECIFICATIONS. This is the date on
which we will begin paying to you the first of a series of Annuity or Income
payments in accordance with the Settlement Option elected by you. Annuity or
Income payments will begin under this contract on the Maturity Date unless the
contract has been fully surrendered or the proceeds have been paid to the
Beneficiary prior to that date. We may require proof that the Annuitant is alive
before Annuity payments are made. If no Maturity Date is specified, the
automatic Maturity Date will be the date when the Annuitant reaches age 70.

Additionally, to the extent permitted by law, at least 30 days before the
original Maturity Date, you may change the Maturity Date by Written Request to a
later date with our consent.

ELECTION OF SETTLEMENT OPTIONS

On the Maturity Date, or other agreed upon date, we will pay the amount payable
under this contract to you in one lump sum or in accordance with the option
elected by you. While the Annuitant is alive, you may change your Settlement
Option election by Written Request, but only before the Maturity Date. Once
Annuity or Income payments have commenced, no further election changes are
allowed.

If no election has been made on the Maturity Date and if the Annuitant is living
and has a spouse, we will pay to you the first of a series of monthly Annuity
payments based on the life of the Annuitant as primary payee and the Annuitant's
spouse as secondary payee, in accordance with Annuity Option 4. During the
Annuitant's lifetime, if no election has been made and the Annuitant has no
spouse on the Maturity Date, we will pay to you the first of a series of monthly
Annuity payments based on the life of the Annuitant, in accordance with Annuity
Option 2, with 120 monthly payments assured.

MINIMUM AMOUNTS

The minimum amount that can be placed under a Settlement Option is $2,000 unless
we consent to a lesser amount. If any periodic payments due are less than
$100.00, we reserve the right to make payments at less frequent intervals.

ALLOCATION OF ANNUITY

At the time an election of one of the Annuity Options is made, the person
electing the option may further elect to have the Cash Surrender Value applied
to provide a Variable Annuity, a Fixed Annuity or a combination of both.

If no election is made to the contrary, the value of a Sub-Account will be
applied when Annuity payments start to provide an Annuity which varies with the
investment experience of that same Sub-Account and the value of the Fixed
Account will be applied to provide a Fixed Annuity.

You may elect to transfer Contract Value from one Account to another, as
described in the provision "Transfer Between Accounts," in order to reallocate
the basis on which Annuity payments will be determined. Once Annuity payments
start, you may, with our consent, change the allocation of your values in each
Sub-Account.

VARIABLE ANNUITY

AMOUNT OF BASIC FIRST PAYMENT
The LIFE ANNUITY TABLES are used to determine the basic first monthly Annuity
payment. They show the dollar amount of the basic first monthly Annuity payment
which can be purchased with each $1,000 applied. The amount applied to an
Annuity will be the Cash Surrender Value as of 14 days before the date Annuity
payments start. We reserve the right to require satisfactory proof of the age of
any person on whose life Annuity payments are based before making the first
payment under any of these options.

ANNUITY UNIT VALUE
The initial value of an Annuity Unit for each Sub-Account was set at $1.00. On
any Valuation Date, the Annuity Unit Value for a Sub-Account equals the
Sub-Account Annuity Unit Value on the immediately preceding Valuation Date,
multiplied by the net investment factor for that Sub-Account for the Valuation
Period just ended, divided by the Assumed Daily Net Investment Factor. The
Assumed Daily Net Investment Factor is shown on the CONTRACT SPECIFICATIONS.

L-14541 11 TIC Ed. 01-96

<PAGE> 14
The Value of an Annuity Unit as of any date other than a Valuation Date will be
equal to its value as of the next succeeding Valuation Date.

NUMBER OF ANNUITY UNITS
We determine the number of Annuity Units credited to this contract in each
Sub-Account by dividing the basic first monthly Annuity payment attributable to
that Sub-Account by the Sub-Account's Annuity Unit Value as of 14 days before
the due date of the first Annuity payment.

AMOUNT OF SECOND AND SUBSEQUENT BASIC PAYMENTS
The dollar amount of the second and subsequent payments may change from month to
month. The total amount of each Annuity payment will be equal to the sum of the
basic payments in each Sub-Account.

The actual amount of the basic payments in each Sub-Account is found by
multiplying the number of Annuity Units credited to the contract in that
Sub-Account by the Annuity Unit Value of the Sub-Account as of the date 14 days
prior to the date on which the payment is due.

FIXED ANNUITY

A Fixed Annuity is an Annuity with payments which remain fixed as to dollar
amount throughout the payment period. The dollar amount of the first Fixed
Annuity payment will be calculated as described above in the "Amount of Basic
First Payment" provision. All subsequent payments will be in the same amount and
that amount will be assured throughout the payment period. If it would produce a
larger payment, we agree that the Fixed Annuity payment will be determined using
the Life Annuity Tables in effect on the Maturity Date.

ANNUITY OPTIONS

Subject to conditions stated in ELECTIONS OF SETTLEMENT OPTIONS and MINIMUM
AMOUNTS, all or any part of the Cash Surrender Value of this contract may be
paid under one or more of the Annuity Options below.

OPTION 1. LIFE ANNUITY - NO REFUND
We will make monthly annuity payments during the lifetime of the person on whose
life the payments are based, ending with the last monthly payment preceding
death.

OPTION 2. LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS ASSURED
We will make monthly Annuity payments during the lifetime of the person on whose
life the payments are based, and under the conditions stated below.

If at the death of that person, payments have been made for less than 120, 180,
or 240 months, as elected, we will continue to make payments to the designated
Beneficiary during the remainder of the period.

OPTION 3. JOINT AND LAST SURVIVOR LIFE ANNUITY
We will make monthly Annuity payments during the joint lifetime of two persons
on whose lives payments are based and during the lifetime of the survivor.

No more payments will be made after the death of the survivor.

OPTION 4. JOINT AND LAST SURVIVOR LIFE ANNUITY - ANNUITY REDUCED ON DEATH OF
PRIMARY PAYEE
We will make monthly Annuity payments during the joint lifetime of two persons
on whose lives payments are based. One of the two persons will be designated as
the primary payee. The other will be designated as the secondary payee. On the
death of the secondary payee, if survived by the primary payee, we will continue
to make monthly Annuity payments to the primary payee in the same amount that
would have been payable during the joint lifetime of the two persons.

On the death of the primary payee, if survived by the secondary payee, we will
continue to make monthly annuity payments to the secondary payee in an amount
equal to 50% of the payments which would have been made during the lifetime of
the primary payee.

No further payments will be made following the death of the survivor.

OPTION 5. OTHER ANNUITY OPTIONS
We will make any other arrangements for Annuity payments as may be mutually
agreed.

L-14541 12 TIC Ed. 01-96

<PAGE> 15
INCOME OPTIONS

We will pay all or any part of the Cash Surrender Value to you under one or more
of the Income Options below subject to the conditions stated in ELECTION OF
SETTLEMENT OPTIONS and MINIMUM AMOUNTS and your tax qualification rider.

The Cash Surrender Value used to determine the amount of any Income payment will
be based on the Accumulation Unit Value as of 14 days before the date an Income
payment is due and will be determined the same way as in the Accumulation
period.

OPTION 1. PAYMENTS OF A FIXED AMOUNT
We will make equal payments each month in the amount elected until the Cash
Surrender Value applied under this option is gone.

The first monthly payment will be paid from each Sub-Account in proportion to
its Cash Surrender Values applied.

The second payment and all later payments from each Sub-Account will be the same
as the first payment under this option. The final payment will include any
amount that is not enough to make another full payment.

OPTION 2. PAYMENTS FOR A FIXED PERIOD
We will make monthly payments for the period selected. The amount of each
payment will be equal to the then remaining Cash Surrender Value applied under
this option divided by the number of remaining payments.

OPTION 3. OTHER INCOME OPTIONS
We will make any other arrangements for Income payments as may be mutually
agreed.

L-14541 13 TIC Ed. 01-96

<PAGE> 16
- --------------------------------------------------------------------------------
GENERAL PROVISIONS
- --------------------------------------------------------------------------------

THE CONTRACT
The entire contract between you and us consists of the contract and all attached
pages.

CONTRACT CHANGES
The only way this contract may be changed is by a written endorsement signed by
one of our officers.

SUBSTITUTION OF SEPARATE ACCOUNT OR FUNDING OPTIONS
If it is not possible to continue to offer a Separate Account or Funding Option,
or in our judgment becomes inappropriate for the purposes of this contract, we
may substitute another Separate Account or Funding Option without your consent.
Substitution may be made with respect to both existing investments and
investment of future premium payments. However, no such substitution will be
made without notice to you and without prior approval of the Securities and
Exchange Commission, to the extent required by law.

MISSTATEMENT
If the Annuitant's date of birth was misstated, all benefits of this contract
are what the purchase payment paid would have purchased at the correct age.
Proof of the Annuitant's age may be filed at any time at Our Office.

INCONTESTABILITY
We will not contest this contract from its Contract Date.

TERMINATION
We reserve the right to terminate this contract on any Valuation Date if the
Contract Value as of the date is less than the Termination Amount shown on the
CONTRACT SPECIFICATIONS, and purchase payments have not been made to this
contract for at least two years. Termination will not occur until 31 days after
we have mailed notice of termination to you at your last known address. If this
contract is terminated, we will pay you the Cash Surrender Value, if any.

REQUIRED REPORTS
We will furnish a report to the owner as often as required by law, but at least
once in each Contract Year before the due date of the first Annuity or Income
payment. The report will show the number of Accumulation Units credited to the
contract in each Account and the corresponding Accumulation Unit Value as of the
date of the report.

VOTING RIGHTS
If required by federal law, you may have the right to vote at the meetings of
the Shareholders of the Funding Options. If you have voting rights, we will send
a notice to you telling you the time and place of a meeting. The notice will
also explain matters to be voted upon and how many votes you may exercise.

MORTALITY AND EXPENSES
Our actual mortality and expense experience will not affect the amount of any
Annuity or Income payments or any other values under this contract.

NON-PARTICIPATING
This contract does not share in our surplus earnings, so you will receive no
dividends under it.

CONTRACT MODIFICATION
We reserve the right to modify this contract to qualify it under provision of
Sections 401, 403, 408 or 414(d) of the Code and all related laws and
regulations which are in effect during the term of this contract. We will obtain
the approval of any regulatory authority needed for the modifications.

STATE LAWS
This contract is governed by the law of the state in which it is delivered. Any
paid-up Annuity, Cash Surrender or death benefits that are available under this
contract are not less than the minimum benefits required by the statutes of the
state in which this contract is delivered.

CHANGES IN TAXES BASED UPON PREMIUMS OR VALUE
If there is any change in a law assessing taxes against us based upon the
premiums or value of this contract, we reserve the right to charge you
proportionately for that tax. This would include a tax based upon our realized
net capital gains in the Sub-Accounts and on earnings in the Fixed Account, on
which we are not currently taxed.

L-14541 14 TIC Ed. 01-96

<PAGE> 17
EMERGENCY PROCEDURE
We reserve the right to suspend or postpone the date of any payment of any
benefit or values for any Valuation Period (1) when the New York Stock Exchange
is closed; (2) when trading on the Exchange is restricted; (3) when an emergency
exists as determined by the Securities and Exchange Commission so that disposal
of the securities held in the Sub-Accounts is not reasonably practicable and it
is not reasonably practicable to determine the value of the Sub-Account's net
assets, or (4) during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of security holders. Any
provision of this contract which specifies a Valuation Date will be superseded
by this Emergency Procedure.

RELATION OF THIS CONTRACT TO THE SEPARATE ACCOUNTS AND SUB-ACCOUNTS
We will have exclusive and absolute ownership and control of the assets of our
Separate Account and the Sub-Accounts. That portion of the assets of a Separate
Account or Sub-Account equal to the reserves and other contract liabilities with
respect to such Separate Account or Sub-Account shall not be chargeable with
liabilities arising out of any other business we conduct. Our determination of
the value of an Accumulation Unit and an Annuity Unit by the method described in
this contract will be conclusive.

L-14541 15 TIC Ed. 01-96

<PAGE> 18
TABLE OF VALUES
GUARANTEED VALUES OF THE FIXED ACCOUNT PER $1,000 OF
NET PURCHASE PAYMENT APPLIED

<TABLE>
<CAPTION>
NO. OF GUARANTEED NO. OF YEARS GUARANTEED
YEARS FROM CASH FROM DATE CASH
DATE PAYMENT GUARANTEED SURRENDER PAYMENT IS GUARANTEED SURRENDER
IS APPLIED VALUE VALUE APPLIED VALUE VALUE
<S> <C> <C> <C> <C> <C>
1 1030 1030 36 2898 2898
2 1060 1060 37 2985 2985
3 1092 1092 38 3074 3074
4 1125 1125 39 3167 3167
5 1159 1159 40 3262 3262
6 1194 1194 41 3359 3359
7 1229 1229 42 3460 3460
8 1266 1266 43 3564 3564
9 1304 1304 44 3671 3671
10 1343 1343 45 3781 3781
11 1384 1384 46 3895 3895
12 1425 1425 47 4011 4011
13 1468 1468 48 4132 4132
14 1512 1512 49 4256 4256
15 1557 1557 50 4383 4383
16 1604 1604 51 4515 4515
17 1652 1652 52 4650 4650
18 1702 1702 53 4790 4790
19 1753 1753 54 4934 4934
20 1806 1806 55 5082 5082
21 1860 1860 56 5234 5234
22 1916 1916 57 5391 5391
23 1973 1973 58 5553 5553
24 2032 2032 59 5720 5720
25 2093 2093 60 5891 5891
26 2156 2156 61 6068 6068
27 2221 2221 62 6250 6250
28 2287 2287 63 6437 6437
29 2356 2356 64 6631 6631
30 2427 2427 65 6829 6829
31 2500 2500 66 7034 7034
32 2575 2575 67 7245 7245
33 2652 2652 68 7463 7463
34 2731 2731 69 7687 7687
35 2813 2813 70 7917 7917
</TABLE>

L-14541CS 16 TIC Ed. 06-97

<PAGE> 19
LIFE ANNUITY TABLES
DOLLAR AMOUNT OF THE FIRST MONTHLY ANNUITY PAYMENT WHICH IS PURCHASED
WITH EACH $1,000 APPLIED
OPTIONS 1 AND 2-SINGLE LIFE ANNUITIES

<TABLE>
<CAPTION>
120 180 240
MONTHLY MONTHLY MONTHLY
ADJUSTED NO PAYMENTS PAYMENTS PAYMENTS
AGE REFUND ASSURED ASSURED ASSURED
<S> <C> <C> <C> <C>
50 $4.13 $4.10 $4.06 $4.00
51 4.20 4.17 4.13 4.06
52 4.28 4.25 4.20 4.12
53 4.37 4.33 4.27 4.18
54 4.46 4.41 4.35 4.25
55 4.55 4.50 4.42 4.31
56 4.65 4.59 4.51 4.38
57 4.76 4.69 4.59 4.44
58 4.87 4.79 4.68 4.51
59 4.99 4.90 4.77 4.58
60 5.12 5.01 4.86 4.65
61 5.26 5.13 4.96 4.72
62 5.40 5.25 5.06 4.79
63 5.56 5.39 5.16 4.85
64 5.72 5.52 5.27 4.92
65 5.90 5.67 5.37 4.99
66 6.09 5.82 5.48 5.05
67 6.29 5.97 5.59 5.11
68 6.51 6.13 5.69 5.16
69 6.74 6.30 5.80 5.21
70 6.99 6.48 5.90 5.26
71 7.26 6.66 6.01 5.31
72 7.54 6.84 6.11 5.34
73 7.86 7.03 6.20 5.38
74 8.19 7.22 6.29 5.41
75 8.55 7.41 6.38 5.43
</TABLE>

OPTION 3 - JOIN AND LAST SURVIVOR LIFE ANNUITY

<TABLE>
<CAPTION>
ADJUSTED
AGE OF ADJUSTED AGE OF SECOND LIFE
FIRST LIFE 51 56 58 61 63 66 71

Dollar amounts of the first monthly payments for ages not shown in these Tables
will be calculated on the same basis as those shown and may be obtained from us.
Amounts shown in these Tables are based on the Progressive Annuity Table, with a
two year set-back, (assuming births in the year 1900) with interest at the rate
of 3% per annum. The adjusted age of the person on whose life the Annuity is
based is determined from the actual age last birthday on the due date of the
first Annuity payment in the following manner.

<TABLE>
<S> <C> <C> <C>
Calendar Year in which
First Payment is Due . . 1991-2000 2001-2010 2011 & later
Adjusted Age is Actual Age minus 0 minus 1 minus 2
</TABLE>

L-14542 17 TIC Ed. 01-96

<PAGE> 20
OPTION 4 - JOINT AND LAST SURVIVOR LIFE ANNUITY
ANNUITY REDUCES ON DEATH OF PRIMARY PAYEE

<TABLE>
<CAPTION>
ADJUSTED AGE OF
PRIMARY PAYEE ADJUSTED AGE OF SECOND PAYEE
46 51 56 61

<TABLE>
<S> <C> <C> <C>
Calendar Year in which
First Payment is Due . . 1991-2000 2001-2010 2011 & later
Adjusted Age is Actual Age minus 0 minus 1 minus 2
</TABLE>

L-14542 18 TIC Ed. 01-96

<PAGE> 21
INDIVIDUAL RETIREMENT ANNUITY QUALIFICATION RIDER

As requested by you, this Contract is amended as follows to qualify as an
Individual Retirement Annuity (IRA) under Section 408(b) of the Code of
1986, as amended.

I. EXCLUSIVE BENEFIT

This Contract is established for the exclusive benefit of you or your
Beneficiaries.

II. PROHIBITION OF ASSIGNMENT OR LOAN

This Contract shall not be pledged or otherwise encumbered and it shall
not be sold, assigned or otherwise transferred to any person or entity
other than us. No loans shall be made under this Contract.

III. LIMITATION ON PURCHASE PAYMENTS

Notwithstanding the provisions of the Contract and except in the case of
a rollover contribution (as permitted by Section 402(c), 403(a)(4),
403(b)(8), or 408(d)(3) of the Code) or a contribution made in accordance
with the terms of a Simplified Employee Pension (SEP) program as
described in Section 408(k) of the Code, the total contributions shall
not exceed the lesser of $2,000 or 100% of compensation for any taxable
year. In the case of a spousal IRA, the maximum contribution shall not
exceed the lesser of $2,250 or 100% of compensation, but no more than
$2,000 can be contributed to either spouse's IRA. In the case of a
Simplified Employee Pension Plan qualifying under Section 408(k), the
annual contribution under the Contract may not exceed the lesser of
$30,000 or 15% of compensation. No contributions will be accepted unless
they are in cash.

The amount of purchase payments beyond the minimum purchase payment under
this Contract is not fixed. The minimum purchase payment must be received
as a rollover (see Section X). Payment of purchase payments beyond the
first will not be required to continue this contract.

Purchase payments after the first will not be required to continue this
Contract in force. We reserve the right, however, to terminate this
Contract when no purchase payments have been made for at least two
consecutive years and the Contract Value of the Contract is less than the
termination amount of $1,000 or the paid up Annuity benefit at maturity
would be less than $20 per month. If this Contract is terminated, we will
pay you the Cash Surrender Value, if any.

IV. COMPENSATION

Compensation means wages, salaries, professional fees, or other amounts
derived from or received from personal service actually rendered
(including, but not limited to, commissions) and includes earned income
as defined in Code Section 401(c)(2). Compensation does not include
amounts received as earnings or profits from property or amounts not
includible in gross income. Compensation also does not include any amount
received as a pension or Annuity or as deferred compensation. The term
"compensation" shall include any amount includible in the individual's
gross income under Code Section 71 with respect to a divorce or
separation instrument.

V. DISTRIBUTION OF BENEFITS

Notwithstanding any provision of this contract to the contrary, the
distribution of an individual's interest shall be made in accordance with
the minimum distribution requirements of Section 408(a)(6) or Section
408(b)(3) of the Code and the regulations thereunder, including the
incidental death benefit provisions of Section 1.401(a)(9)-2 of the
proposed regulations, all of which are herein incorporated by reference.

Your entire interest in the account must be distributed, or begin to be
distributed, by your required beginning date, which is the April 1
following the calendar year in which you reach age 70 1/2. For each
succeeding year, a distribution must be made on or before December 31. By
the required beginning date you may elect to have the balance in the
account distributed in one of the following forms:

1. a single sum payment;

2. equal or substantially equal payments over your life;

L-14543 TIC Ed. 01-96

<PAGE> 22
3. equal or substantially equal payments over the lives of you and
your designated Beneficiary;

4. equal or substantially equal payments over a specified period that
may not be longer than your life expectancy;

5. equal or substantially equal payments over a specified period that
may not be longer than the joint life and last survivor expectancy
of you and your designated Beneficiary.

MINIMUM AMOUNTS TO BE DISTRIBUTED

If your interest is to be distributed in other than a lump sum or
substantially equal amounts as discussed above, then the amount to be
distributed each year, commencing at your required beginning date, must
be at least an amount equal to the quotient obtained by dividing your
entire interest by your life expectancy or the joint and survivor
expectancy of you and your designated Beneficiary.

Life expectancy and joint and last survivor expectancy are computed by
use of the return multiples contained in section 1.72-9 of the Income Tax
Regulations. For purposes of this computation, the owner's life
expectancy may be recalculated no more frequently than annually; however,
the life expectancy of a nonspouse Beneficiary may not be recalculated.

If your designated Beneficiary is not your spouse, then the minimum
amount required to be distributed shall be the greater of the amount
determined above, or the amount determined under the incidental benefit
rules set forth in Treasury Regulation Section 1.401(a)(9)-2.

VI. DEATH

If you die before your entire interest is distributed, the entire
remaining interest will be distributed as follows:

1. If you die on or after distributions have begun under the
DISTRIBUTION OF BENEFITS section, the entire remaining interest
must be distributed at least as rapidly as provided under the
DISTRIBUTION OF BENEFITS section.

2. If you die before distributions have begun under the DISTRIBUTION
OF BENEFITS section, the entire remaining interest must be
distributed as elected by you, or, if you have not so elected, as
elected by the Beneficiary or Beneficiaries, as follows:

a. by December 31st of the year containing the fifth
anniversary of your death; or

b. in equal or substantially equal payments over the life or
life expectancy of the designated Beneficiary or
Beneficiaries starting by December 31st of the year
following the year of your death. If the Beneficiary is
your surviving spouse and he or she elects to treat this
contract as his or her own, this distribution may be
deferred until December 31st of the year you would have
turned age 70 1/2.

If your surviving spouse dies before distributions begin, the
restrictions in paragraphs 2 (a) and (b) above shall apply.

Unless otherwise elected by you prior to the commencement of
distributions under the DISTRIBUTION OF BENEFITS section, or, if
applicable, by the surviving spouse where you die before distributions
have commenced, life expectancies of you or your spousal Beneficiary
shall be recalculated annually for purposes of distributions under the
DISTRIBUTION OF BENEFITS section and the DEATH section. An election not
to recalculate shall be irrevocable and shall apply to all subsequent
years. The life expectancy of a non-spouse Beneficiary shall not be
recalculated.

VII. ALTERNATIVE CALCULATION METHOD

An individual may satisfy the minimum distribution requirements under
section 408(a)(6) and 408(b)(3) of the Code by receiving a distribution
for one IRA that is equal to the amount required to satisfy the minimum
distribution requirements for two or more IRAs. For this purpose, the
owner of two or more IRAs may use the "alternative method" described in
Notice 88-38, 1988-1 C.B. 524, to satisfy the minimum distribution
requirements described above.

VIII. NONFORFEITABILITY

Your entire interest in this Contract is nonforfeitable.

L-14543 TIC Ed. 01-96

<PAGE> 23
IX. NONTRANSFERABLE

This Contract is not transferable.

X. ROLLOVERS

A. Subject to subparagraphs (B) and (C) hereof, and the limitations
stated in the Contract, you may transfer to this Contract your
interest in any of the following:

1. the entire amount, or any portion thereof, under any other
individual retirement account or individual retirement
Annuity qualified under Section 408 of the Code;

2. the entire amount, or any portion thereof, excluding
nondeductible employee voluntary contributions, under a
trust described in Section 401(a) of the Code which is
exempt from tax under Section 501(a) of the Code or under a
qualified annuity plan described in Section 403(a) of the
Code.

3. the entire amount or any portion thereof, excluding
nondeductible employee voluntary contributions, to which
you are entitled under a tax sheltered annuity described in
Section 403(b) of the Code.

4. distributions you roll over from retirement plans or
arrangements described in A.2. and A.3. above to this
contract must be completed by means of a direct transfer or
rollover in accordance with Code Section 401(a)(31) in
order to avoid mandatory 20% income tax withholding from
the distribution and a possible 10% additional tax penalty
under Code Section 72(t). You may replace amounts withheld
from other sources to complete the full rollover, but the
10% penalty may continue to be due, if you do not specify
that the transfer of the distribution be conducted by
direct transfer or rollover.

B. You shall not make a rollover under subparagraph (A)(1) hereof
during the 12 month period commencing on the date you last made a
rollover contribution of the type described in subparagraph
(A)(1).

C. We must receive any amount which qualifies for a rollover within
60 days after you receive the distribution.

XI. DISTRIBUTIONS PRIOR TO AGE 59 1/2

Except in the event of your death, disability or attainment of age 59
1/2, we shall receive from you a declaration of your intention as to the
disposition of the amounts distributed before making any distribution
from this Contract.

XII. REPORTS

As the issuer of this Contract, we will furnish reports concerning the
status of the Annuity at least annually.

XIII. DISABILITY PAYMENTS

If the Contract contains a Rider for waiver of premium and disability
payment benefits, any disability payments provided for in the CONTRACT
SPECIFICATIONS will be applied as purchase payments under the contract.

XIV. AMENDMENT

This Contract may be amended by us at any time to maintain its qualified
status under Section 408(b) of the Code, following all regulatory
approvals. Any such amendment may be made retroactively effective if
necessary or appropriate to conform to the requirements of the Code (or
any State law granting IRA tax benefits.)

THE TRAVELERS INSURANCE COMPANY

/s/ M.A. CARPENTER

Chairman

L-14543 TIC Ed. 01-96

<PAGE> 24
TAX-SHELTERED ANNUITY QUALIFICATION RIDER

This endorsement is made a part of this contract in order to comply with Section
403(b) of the Code. The following conditions, restrictions and limitations
apply.

OWNERSHIP - NON-TRANSFERABLE

ELECTIVE DEFERRAL CONTRIBUTION LIMITS

In order to meet the qualification requirements of Code Section 403(b), elective
deferral contributions may not exceed the limitations in effect under Code
Section 402(g).

This rule is an individual limitation that applies to all elective deferral
plans, contracts or arrangements in the aggregate.

WITHDRAWAL RESTRICTIONS

To qualify as a contract which can defer compensation under a Code Section
403(b) plan or arrangement, the withdrawal restrictions under Code Section
403(b)(11) must be met.

Withdrawals attributable to contributions made pursuant to a salary reduction
agreement may be paid only upon or after attainment of age 59 1/2, separation
from service, death, total or permanent disability (as defined in Code Section
72(m)(7)) or in the case of hardship (as defined in the Treasury Regulations).
The hardship exception applies only to the salary reduction contribution and not
to any income attributable to such contribution.

These withdrawal restrictions apply to years beginning after December 31, 1988
but only with respect to assets other than those assets held as of the close of
the last year beginning before January 1, 1989.

If contributions attributable to a custodial account described in Section
403(b)(7) of the Code are transferred to this contract, the following
conditions, restrictions, and limitations apply.

Withdrawals attributable to these transferred contributions may be paid only
upon or after attainment of age 59 1/2, separation from service, death, or total
and permanent disability (as defined in Code Section 72(m)(7)).

Withdrawals on account of hardship may be made only with respect to assets
attributable to a custodial account as of the close of the last year beginning
before January 1, 1989 and amounts contributed thereafter under a salary
reduction agreement but not to any income attributable to such conditions.

ELIGIBLE ROLLOVERS

To the extent you are otherwise eligible for a distribution under this contract,
and provided the distribution is an eligible rollover distribution, you may
elect to have such distribution or a portion of it paid directly to an eligible
retirement plan. You must specify the eligible retirement plan to which such
distribution is to be paid in a form and at such time acceptable to us. Such
distribution shall be made as of a direct transfer to the eligible retirement
plan so specified. Contract surrender penalties may apply to all rollovers.

Previously taxed amounts in this contract are not eligible for rollover. Amounts
that are rolled over are taxed generally until later distributed. An eligible
rollover distribution includes generally any taxable distribution or portion
thereof from this contract except:

a. any distribution which is one of a series of substantially equal
periodic payments made not less frequently than annually and made
to you for life or life expectancy or to you or your joint life
beneficiary for joint lives or life expectancies, or for a
specified period of 10 years or more, or

b. any distribution which is a required distribution as described
above under "MANDATORY DISTRIBUTION REQUIREMENTS."

L-14544 TIC Ed. 01-96

<PAGE> 25
An eligible retirement plan includes an individual retirement annuity or account
described in Code Section 408. It also includes a tax sheltered annuity plan or
arrangement under Code Section 403(b), provided it accepts eligible rollovers
and is a defined contribution plan.

If you receive a distribution that is eligible for rollover, but you receive the
check directly, then mandatory income tax withholding will be taken from the
distribution. You may roll over the balance to an individual retirement annuity
or account within 60 days of receipt, and may make up the amount withheld from
other sources in the rollover in order to roll over the maximum without possible
early distribution tax penalty on the amount of the tax withholding.

MANDATORY DISTRIBUTION REQUIREMENTS

In order to meet the qualification requirements of Code Section 403(b), all
plans must meet the required mandatory distribution rules in Code Section
401(a)(9).

Code Section 401(a)(9) states that a plan will not be qualified unless the
entire interest of each employee is distributed to such employee not later than
the "required beginning date" or over the life or life expectancy of such
employee or over the lives or joint life expectancy of such employee and a
designated Beneficiary. Generally, the "required beginning date" means April 1
of the calendar year following the calendar year in which the employee attains
age 70 1/2.

If the employee dies after the distribution has begun but before his/her entire
interest has been distributed, the remaining interest must be paid out at least
as rapidly as it was being paid out under the method of payment in effect at the
time of death. If the employee dies before the distribution of his/her entire
interest has begun, the entire interest must be distributed within five years
after the employee's death or an Annuity payable over no longer than life or
life expectancy must be distributed to an electing designated Beneficiary
starting within one year of the employee's death. A spousal designated
Beneficiary may elect to defer distributions until the employee would have
attained the age of 70 1/2.

ADMINISTRATIVE COMPLIANCE

If changes in the Code and related law, regulations and rulings require a
distribution greater than described above in order to keep this Annuity
qualified under the Code, we will administer the contract in accordance with
these laws, regulations and rulings. We will provide you with a revised rider
describing any necessary changes, following all regulatory approvals.

THE TRAVELERS INSURANCE COMPANY

/s/ M.A. CARPENTER

Chairman

L-14544 TIC Ed. 01-96

<PAGE> 26
PENSION/PROFIT SHARING PLAN QUALIFICATION RIDER

If the owner of this contract requested that it be issued to comply with Section
401(a) of the Code, the following conditions, restrictions and limitations apply
to this contract.

OWNERSHIP - NON-TRANSFERABLE

You may not sell, assign, or discount this contract or pledge this contract as
collateral for a loan or as security for the performance of an obligation or for
any other purpose, to any person or organization other than The Travelers Life
and Annuity Company; provided, however, the restrictions of this provision will
not apply to the Trustee of any Trust described in Section 401(a) or the
Administrator of any Annuity Plan described in Section 403(a) of the Code. This
provision supersedes any provisions of the contract which may be inconsistent
with it.

MANDATORY DISTRIBUTION RESTRICTIONS

In order to meet the qualification requirements of Code Section 401(a), all
plans must meet the required mandatory distribution rules in Code Section
401(a)(9).

Code Section 401(a)(9) states that a plan will not be qualified unless the
entire interest of each employee is distributed to such employee not later than
the "required beginning date" or over no longer than the life or life expectancy
of such employee or the lives or joint life expectancy of such employee and a
designated Beneficiary. Generally, the "required beginning date" means April 1
of the calendar year following the calendar year in which the employee attains
age 70 1/2.

If the employee dies before his/her entire interest has been distributed, the
remaining interest must be paid out at least as rapidly as under the method of
payment in effect at the time of death. If the employee dies before the
distribution of his/her entire interest has begun, the entire interest must be
distributed within five years after the employee's death or an Annuity payable
over no longer than life or life expectancy must be distributed to an electing
designated Beneficiary starting within one year of the employee's death. A
spousal designated Beneficiary may elect to defer distributions until the
employee would have attained the age of 70 1/2.

ANNUITIES DISTRIBUTED UNDER QUALIFIED PLANS

If the applicant for this contract requested that it be issued to comply with
Section 401(a) of the Code, and this contract has subsequently been transferred
to the Annuitant, the following conditions, restrictions and limitations apply
to this contract in addition to the above.

Spousal Consent

Death Benefit - If the Annuitant dies while the contract continues and the
Annuitant has a spouse at the time of the Annuitant's death, we will pay the
death benefit to a person other than the current spouse of the Annuitant only if
proof of spousal consent, which meets the requirements of Section 417 of the
Code, is furnished to us.

If the Beneficiary is not the current spouse and such spousal consent is not
furnished, we will pay 50% of the death benefit to the current spouse. We will
pay the balance of the death benefit to the Beneficiary.

Cash Surrender - Before the due date of the first Annuity or Income Payment, 1)
if you do not have a spouse and without the consent of any Beneficiary; or, 2)
if you do have a current spouse then only with the written consent of your
spouse, as required by Section 417 of the Code; we will pay to you all or any
portion of the Cash Surrender Value of the contract upon receipt of your Written
Request for it.

Settlement Option - If the Annuitant is living on the Maturity Date, payment
must be made in accordance with Option 4 under ANNUITY OPTIONS unless you elect
another form of Annuity Option and furnish us a qualified election which meets
the requirements of Section 417 of the Code.

THE TRAVELERS INSURANCE COMPANY

/s/ M.A. CARPENTER

Chairman

L-14534 TIC Ed. 01-96

<PAGE> 27
CASH LOAN RIDER

This rider is made a part of the contract to which it is attached. The date of
issue of the rider is the date the rider is attached to the contract.

You may request a loan by Written Request as stated below:

1. the loan must be requested before the Maturity Date; and

2. the loan will be made without the consent of any Beneficiary or
other party unless irrevocably named, or unless such consent is
required by law; and

3. the loan cannot exceed the maximum loan amount as stated below.

We may defer granting a loan for the period permitted by law but not for more
than six months. We will not grant an additional loan until the first loan has
been repaid in full. The minimum and maximum loan amounts are stated below.

A loan may only be taken from the Fixed Account. A transfer of Contract Value
from the Sub-Accounts to the Fixed Account must be made by Written Request prior
to Our granting the loan. The amount transferred to the Fixed Account will be
taken on a pro rata basis from each of the Sub-Accounts which have Contract
Value, unless We are instructed otherwise. An express condition of Us lending
the loan amount is that You will grant Us a security interest in the Contract
Value of the Fixed Account equal to the loan amount.

MINIMUM AND MAXIMUM AMOUNTS
MINIMUM LOAN AMOUNT: [$1,000]

MAXIMUM LOAN AMOUNT: 80% of the Contract Value for contracts with
balances up to $12,500;

$10,000 for contracts with balances between
$12,500 and $20,000;

For contracts with balances over $20,000, the
lesser of $50,000 reduced by the highest
total amount of loans outstanding during the
prior 12 month period or 50% of the Contract
Value.

LOAN INTEREST RATE: The maximum loan interest rate is 8% per
year. Loan interest is payable to Us in
advance on a quarterly basis, unless We
allow otherwise. The loan interest rate in
effect upon loan origination will remain
constant throughout the term of the loan.

- --------------------------------------------------------------------------------
EFFECT OF A LOAN ON THE CONTRACT VALUE
- --------------------------------------------------------------------------------

While a loan remains outstanding, the Contract Value that is equal to the loan
amount will be credited with interest of not less than 3% per year. We will
notify You of the initial rate that will be credited when the loan is granted.
We reserve the right to change the interest rate in the future, but it will
never be less than 3% per year.

The Contract Value may be reduced as stated in the Loan Principal and Interest
Repayments section of this rider.

- --------------------------------------------------------------------------------
EFFECT OF A LOAN ON TRANSFERS FROM THE FIXED ACCOUNT TO THE SUB-ACCOUNTS
- --------------------------------------------------------------------------------

While a loan remains outstanding, the Cash Surrender Value of the Fixed Account
is the maximum amount that may be transferred from the Fixed Account to any of
the Sub-Accounts, subject to any transfer restrictions of the contract.

L-22185 1 TIC Ed. 5-98

<PAGE> 28

- --------------------------------------------------------------------------------
LOAN PRINCIPAL AND INTEREST REPAYMENTS
- --------------------------------------------------------------------------------

Loan repayment is set forth in the loan agreement. Once a loan is established,
the repayment period may not be changed. The loan may be repaid in full at any
time without penalty. We may send You periodic payment reminders for the loan
principal and interest amount due.

If the entire payment due is not paid by the due date, one of the following
events will occur:

1. If there is Contract Value that is not restricted and is
sufficient to pay the entire payment due or a portion of the
payment amount due, We will surrender the amount due from the
unrestricted Contract Value. Contract Value that is not restricted
consists of any amount that is:
a) not restricted according to the Internal Revenue
Code; and
b) attributable to Purchase Payments made by You.

When the payment due is surrendered from the Contract Value, the
Contract Value will also be reduced by:
a) any amounts deducted on surrender, if applicable,
which are shown on the Contract Specifications page;
plus
b) any applicable Premium Tax not previously deducted;
plus
c) any applicable Federal or State Income Tax due in
accordance with federal and state tax regulations in
effect on the date of the surrender.

2. When the entire payment due cannot be paid as described in item 1
above, We will send You a notice reminding You that the amount has
not been paid. If that payment due is not paid within 60 days of
the date of Our notice, the outstanding loan plus any accrued
interest will be considered a loan in default. Interest will
continue to be charged and credited to the loan in default while
the loan is outstanding. We will not send you any more periodic
payment reminders. Repayment of the outstanding loan principal
and/or accrued interest will be allowed at any time.

When an event occurs that is recognized under federal tax law or
regulations as one which allows the Contract Value to be
distributed, the Contract Value will be reduced by:
a) the amount of the outstanding loan plus any accrued
interest; plus
b) the amounts deducted on surrender, if applicable,
which are shown on the Contract Specifications page;
plus
c) any applicable Premium Tax not previously deducted;
plus
d) any applicable Federal or State Income Tax due in
accordance with federal and state tax regulations in
effect on the date of the surrender;
and the loan will be considered as no longer outstanding.

- --------------------------------------------------------------------------------
EFFECT ON DEATH BENEFIT ENDORSEMENT FORM TL-12794
- --------------------------------------------------------------------------------

If endorsement form, TL-12794 is attached to your contract, the following
sentence is deleted:

"The maximum guaranteed death benefit payable equals 200% of the total of
the purchase payments minus surrenders, minus applicable premium taxes."

and is replaced with the following:

"The maximum guaranteed death benefit payable equals 200% of the total of
the purchase payments minus surrenders, minus any outstanding loan
amounts, minus applicable premium taxes."

THE TRAVELERS INSURANCE COMPANY

/s/ M.A. CARPENTER

CHAIRMAN

L-22185 2 TIC Ed. 5-98

<PAGE> 29
STANDARD DEATH BENEFIT ENDORSEMENT

This endorsement is made a part of this contract as of the date it is attached
to the contract.

The "DEATH PROCEEDS PRIOR TO THE MATURITY DATE" provision is amended by deleting
the provision and replacing it with the following:

- --------------------------------------------------------------------------------
DEATH PROCEEDS PRIOR TO THE MATURITY DATE
- --------------------------------------------------------------------------------

If the Annuitant dies before the Maturity Date, the death benefit payable as of
the Death Report Date will be the greatest of (1) or (2) below, less any
applicable premium tax or outstanding loans as of the Death Report Date:

(1) the Contract Value on the Death Report Date; or

(2) the total Purchase Payments made under the contract, less the
total of any prior surrenders.

THE TRAVELERS INSURANCE COMPANY

/s/ M.A. CARPENTER

President

L-22203 TIC Ed. 07-98

<PAGE> 30
ENHANCED DEATH BENEFIT ENDORSEMENT

This endorsement is made a part of this contract as of the date it is attached
to the contract.

The "DEATH PROCEEDS PRIOR TO THE MATURITY DATE" provision is amended by deleting
the provision and replacing it with the following:

DEATH PROCEEDS PRIOR TO THE MATURITY DATE

If the Annuitant dies before the Maturity Date, the death benefit payable as of
the Death Report Date will be the greatest of (1), (2) or (3) below, less any
applicable premium tax or outstanding loans as of the Death Report Date:

(1) the Contract Value on the Death Report Date; or

(2) the total Purchase Payments made under the contract, less the total of
any partial surrenders; or

(3) the maximum of all Step-Up Death Benefit Values (as described below)
in effect on the Death Report Date which are associated with any
Contract Date anniversary occurring on or before the Annuitant's 80th
birthday.

STEP-UP DEATH BENEFIT VALUE

A separate Step-Up Death Benefit Value will be established on each anniversary
of the Contract Date which occurs on or prior to the Death Report Date and will
initially equal the Contract Value on that anniversary. After a Step-Up Death
Benefit 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.
Step-Up Death Benefit Values will be recalculated by increasing them by the
amount of each applicable Purchase Payment and by reducing them by a Partial
Surrender Reduction (as described below) for each applicable partial surrender.
Recalculations of Step-Up Death Benefit Values related to any Purchase Payments
or any partial surrenders will be made in the order that such Purchase Payments
or partial surrenders occur.

PARTIAL SURRENDER REDUCTION

The Partial Surrender Reduction referenced above is equal to (1) the amount of a
Step-Up Death Benefit 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.

THE TRAVELERS INSURANCE COMPANY

/s/ M.A. CARPENTER

President

L-22200 TIC Ed. 07-98

<PAGE> 31

INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT

Tax Qualified Non-Participating

L-14539 TIC Ed. 01-96

<PAGE> 32

THE TRAVELERS INSURANCE COMPANY - ONE TOWER SQUARE -
HARTFORD, CONNECTICUT - 06183

A STOCK COMPANY

We are pleased to provide you the benefits of this Variable
Annuity Contract. Please read your contract and all attached
forms carefully.

RIGHT TO EXAMINE THIS CONTRACT

This contract is issued in consideration of the purchase payment. It is
subject to the terms and conditions stated on the attached pages, all of
which are a part of it.

Executed at Hartford, Connecticut

/s/ M.A. CARPENTER

Chairman

This is a legal contract between you and us. READ YOUR CONTRACT CAREFULLY.

INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT
NON TAX QUALIFIED
LIFE ANNUITY COMMENCING AT MATURITY DATE

ELECTIVE OPTIONS NON-PARTICIPATING

ANNUITY PAYMENTS AND OTHER VALUES PROVIDED BY THIS CONTRACT, WHEN BASED ON THE
INVESTMENT EXPERIENCE OF THE SEPARATE ACCOUNT, ARE VARIABLE AND ARE NOT
GUARANTEED AS TO FIXED DOLLAR AMOUNT.

L-14529 TIC Ed. 01-96

<PAGE> 33

<TABLE>
<CAPTION>
TABLE OF CONTENTS
-----------------

<S> <C>
Right to Examine this Contract Cover Page

Contract Specifications Pages 3-4

Definitions Page 5

Owner, Beneficiary and Annuitant Provisions Pages 6-7

Purchase Payment and Valuation Provisions Pages 8-10

Death Benefit Provisions Page 11

Settlement Provisions Pages 12-14

General Provisions Pages 15-16

Table of Values Page 17

Life Annuity Tables Pages 19-20
</TABLE>

Any Riders or Endorsements follow the Life Annuity Tables.

L-14529 Page 2 TIC Ed. 01-96

<PAGE> 34

CONTRACT SPECIFICATIONS

OWNER JOHN DOE

JOINT OWNER

ANNUITANT JOHN DOE

CONTINGENT ANNUITANT

CONTRACT NUMBER SPECIMEN 12/01/95 CONTRACT DATE

MONTHLY LIFE ANNUITY 12/01/25 MATURITY DATE

PURCHASE PAYMENTS:

Minimum Initial Purchase Payment: $20,000
Minimum Subsequent Purchase Payment: $500
Maximum Purchase Payment: $1,000,000 unless we consent to a larger amount

FIXED ACCOUNT GUARANTEED INTEREST PERIODS: The initial rate for any deposit is
guaranteed for one year from date of deposit. Subsequent renewal rates will be
guaranteed for the calendar quarter.

TRANSFER CHARGE: $0.00

You may transfer up to 15% of the Fixed Account value to any of the Sub-Accounts
twice a year during the 30 days following the semi-annual Contract Date
anniversary.

AMOUNTS DEDUCTED ON SURRENDER: 0%

CONTRACT CHARGE

UPON ANNUITIZATION, THE ASSUMED DAILY NET INVESTMENT FACTOR IS 1.000081 FOR ALL
SUB-ACCOUNTS.

DEATH BENEFIT
You have elected the Standard Death Benefit for this Contract; please see the
attached Standard Death Benefit Endorsement for a complete description of this
benefit.

TERMINATION

We reserve the right to terminate this contract when the Contract Value is less
than the Termination Amount of $1,000 and no purchase payments have been made
for at least two years.

L-14530DW 3 Asset Manager
TIC ED. 7-98

<PAGE> 35

SEPARATE ACCOUNT: THE TRAVELERS SEPARATE ACCOUNT SEVEN FOR VARIABLE ANNUITIES

FUNDING OPTIONS:

Information about the Separate Account is provided in the prospectus for The
Travelers Separate Account Seven For Variable Annuities.

L-14530DW 4 Asset Manager
TIC ED. 7-98

<PAGE> 36

CONTRACT SPECIFICATIONS

OWNER JOHN DOE

JOINT OWNER

ANNUITANT JOHN DOE

CONTINGENT ANNUITANT

CONTRACT NUMBER SPECIMEN 12/01/95 CONTRACT DATE

MONTHLY LIFE ANNUITY 12/01/25 MATURITY DATE

PURCHASE PAYMENTS:

Minimum Initial Purchase Payment: $20,000
Minimum Subsequent Purchase Payment: $500
Maximum Purchase Payment: $1,000,000 unless we consent to a larger amount

FIXED ACCOUNT GUARANTEED INTEREST PERIODS: The initial rate for any deposit is
guaranteed for one year from date of deposit. Subsequent renewal rates will be
guaranteed for the calendar quarter.

TRANSFER CHARGE: $0.00

You may transfer up to 15% of the Fixed Account value to any of the Sub-Accounts
twice a year during the 30 days following the semi-annual Contract Date
anniversary.

AMOUNTS DEDUCTED ON SURRENDER: 0%

CONTRACT CHARGE

UPON ANNUITIZATION, THE ASSUMED DAILY NET INVESTMENT FACTOR IS 1.000081 FOR ALL
SUB-ACCOUNTS.

DEATH BENEFIT
You have elected the Enhanced Death Benefit for this Contract; please see the
attached Enhanced Death Benefit Endorsement for a complete description of this
benefit.

TERMINATION

We reserve the right to terminate this contract when the Contract Value is less
than the Termination Amount of $1,000 and no purchase payments have been made
for at least two years.

L-14530DWE 3 Asset Manager
TIC ED. 7-98

<PAGE> 37

SEPARATE ACCOUNT: THE TRAVELERS SEPARATE ACCOUNT SEVEN FOR VARIABLE ANNUITIES

FUNDING OPTIONS:

Information about the Separate Account is provided in the prospectus for The
Travelers Separate Account Seven For Variable Annuities.

L-14530DWE 4 Asset Manager
TIC ED. 7-98

<PAGE> 38

DEFINITIONS

(a) ACCOUNT(s) - the Sub-Accounts and/or the Fixed Account under this
contract.

(b) ACCUMULATION UNIT - an accounting unit of measure used to calculate the
value of this contract before Annuity payments begin.

(d) ANNUITANT - the person on whose life the Maturity Date and Annuity
payments depend.

(e) ANNUITY UNIT - an accounting unit of measure used to calculate the amount
of Annuity Payments.

(f) CODE - the Internal Revenue Code of 1986, as amended, and all related laws
and regulations which are in effect during the term of this contract.

(g) CONTRACT DATE - the date on which the contract is issued.

(h) CONTRACT YEARS - twelve month periods beginning with the Contract
Date.

(i) DEATH REPORT DATE - the Valuation Date coincident with or next following
the day on which we have received 1) Due Proof of Death and 2) a Written
Request for an election of a single sum payment or an alternate Settlement
Option as described in the contract.

(j) DUE PROOF OF DEATH - (I) a copy of a certified death certificate; (ii) a
copy of a certified decree of a court of competent jurisdiction as to the
finding of death; (iii) a written statement by a medical doctor who
attended the deceased; or (iv) any other proof satisfactory to us.

(k) FIXED ACCOUNT - an account that consists of all of the assets under this
contract other than those in the Separate Account.

(l) FUNDING OPTION - an open-end diversified management investment company
indicated in the CONTRACT SPECIFICATIONS, which serves as an investment
option under the Separate Account.

(m) MATURITY DATE - the date on which the Annuity payments are to begin.

(n) OUR OFFICE - the Home Office of The Travelers Insurance Company or
any other office which we may designate for the purpose of administering
this contract.

(o) RECORDED - a Written Request is recorded when the information is noted in
our file for this contract.

(p) SEPARATE ACCOUNTS - those Separate Accounts indicated in the CONTRACT
SPECIFICATIONS which we established for this class of contracts and certain
other contracts.

(q) SETTLEMENT OPTIONS - an Annuity or Income option elected under this
contract.

(r) SUB-ACCOUNT - that portion of the assets of a Separate Account which is
allocated to a particular Underlying Fund.

(s) VALUATION DATE - a date on which a Sub-Account is valued.

(t) VALUATION PERIOD - the period between successive valuations.

(u) WE, US, OUR - The Travelers Insurance Company.

(v) WRITTEN REQUEST - written information including requests for contract
changes sent to us in a form and content satisfactory to us and received
at Our Office.

(w) YOU, YOUR - the Owner, including a joint owner

L-14531 5 TIC Ed. 01-96

<PAGE> 39

OWNER, BENEFICIARY AND ANNUITANT PROVISIONS

OWNER
This contract belongs to the owner shown on the CONTRACT SPECIFICATIONS or to
any person subsequently named in a Written Request of transfer of owner as
provided below. As owner, you have sole power during the Annuitant's lifetime
to exercise any rights and to receive all benefits given in this contract
provided you have not named an irrevocable Beneficiary and provided the
contract is not assigned.

You will be the recipient of all payments while the Annuitant is alive unless
you direct them to an alternate recipient under a Recorded payment direction.
An alternate recipient under a payment direction does not become the owner. A
payment direction is revocable by you at any time by Written Request giving 30
days advance notice.

JOINT OWNER
Joint Owners may be named in a Written Request prior to the Contract Date.
Joint owners may independently exercise transfers between accounts. All other
rights of ownership must be exercised by joint action. Joint owners own equal
shares of any benefits accruing or payments made to them. All rights of a
joint owner end at death if another joint owner survives. The entire interest
of the deceased joint owner in this contract will pass to the surviving joint
owner.

If the owner dies and is survived by the Annuitant before payment of an
Annuity or Income Option begins, any surviving joint or suceeding owner is the
"designated beneficiary" referred to in Section 72(s) of the Code, and his or
her rights pre-empt those of the Beneficiary named in a Written Request.

TRANSFER OF OWNER
You may transfer ownership by Written Request. You may not revoke any transfer
after the effective date. Once the transfer of owner is Recorded by us, it
will take effect as of the date of your Request, subject to any payments made
or other actions taken by us before the recording.

Unless provided otherwise, a transfer does not affect the interest of any
Beneficiary designated prior to the effective date of the transfer.

A transfer of ownership may have adverse tax consequences to you as the former
owner.

ASSIGNMENT
You may collaterally assign ownership of all or a portion of this contract by
Written Request without the approval of any Beneficiary unless irrevocably
named. You may not exercise any rights of ownership while the assignment
remains in effect without the approval of the collateral assignee. We are not
responsible for the validity of any assignment. Once the collateral assignment
is Recorded by us, it will take effect as of the date of your Written Request,
subject to any payments made or other actions taken by us before the Request
is received.

If a claim is made based on an assignment, we may require proof of interest of
the claimant. A Recorded assignment takes precedence over any rights of a
Beneficiary. Any amounts due under a Recorded assignment will be paid in a
single sum.

An assignment may have adverse tax consequences to you.

CREDITOR CLAIMS
To the extent permitted by law, no right or benefit of the owner or
Beneficiary under this contract shall be subject to the claims of creditors or
any legal process except as may be provided by an assignment.

BENEFICIARY
The Beneficiary is the party named in a Written Request. The Beneficiary has
the right to receive any remaining contractual benefits upon the death of the
Annuitant, or under certain circumstances, upon the death of the owner. If
there is more than one Beneficiary surviving the Annuitant, the Beneficiaries
will share equally in benefits unless different shares are Recorded with us by
Written Request prior to the death of the Annuitant.

If the owner dies and is survived by the Annuitant before payment of an
Annuity or Income Option begins, any surviving joint owner is the "designated
beneficiary" referred to in Section 72(s) of the Code, and his or her rights
pre-empt those of the Beneficiary named in a Written Request.

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.

L-14531 6 TIC Ed. 01-96

<PAGE> 40

Once a change in Beneficiary is Recorded by us, it will take effect as of the
date of the Written Request, subject to any payments made or other actions
taken by us before the recording.

If no Beneficiary has been named by you, or if no Beneficiary is living when
the Annuitant dies, the interest of any Beneficiary will pass:

a. if you are living, to you;

b. if you have died and there is a surviving joint owner, to the joint
owner;

c. if you have died and there is not a joint owner surviving, to your
estate.

ANNUITANT
The Annuitant is the individual shown on the CONTRACT SPECIFICATIONS on whose
life the first Annuity payment is made. The Annuitant may not be changed after
the Contract Date.

CONTINGENT ANNUITANT
You may name one individual as a contingent annuitant by Written Request prior
to the Contract Date. A contingent annuitant may not be changed, deleted or
added to the contract after the Contract Date. For purposes of this provision
the owner cannot be the Annuitant.

If the Annuitant dies prior to the Maturity Date while this contract is in
effect and while the contingent annuitant is living:

a. the death benefit will not be payable upon the Annuitant's death;

b. the contingent annuitant becomes the Annuitant; and

c. all other rights and benefits provided by this contract will
continue in effect.

When a contingent annuitant becomes the Annuitant, the Maturity Date remains
the same as previously in effect, unless otherwise provided.

L-14531 7 TIC Ed. 01-96

<PAGE> 41

PURCHASE PAYMENT AND VALUATION PROVISIONS

PURCHASE PAYMENTS

Net purchase payments are that part of your purchase payments applied to the
Contract Value. A net purchase payment is equal to the purchase payment less any
applicable premium tax charge.

SUB-ACCOUNT VALUATION

The value of an Accumulation Unit on any date other than a Valuation Date will
be equal to its value as of the next Valuation Date.

Each Sub-Account's net investment rate for a Valuation Period is equal to the
gross investment rate for that Sub-Account, less the applicable Sub-Account
deduction for the Valuation Period.

All Sub-Account deductions are shown on the CONTRACT SPECIFICATIONS.

The gross investment rate of a Sub-Account for a Valuation Period is equal to
(1) divided by (2) where (1) is:

a. investment income, plus

b. capital gains and losses, whether realized or unrealized; less

c. a deduction for any tax levied against the Separate Account and its Funding
Options; and

(2) is the amount of the assets at the beginning of the Valuation Period.

L-14531 8 TIC Ed. 01-96

<PAGE> 42

FIXED ACCOUNT VALUATION

TRANSFER BETWEEN ACCOUNTS

CONTRACT VALUES

L-14531 9 TIC Ed. 01-96

<PAGE> 43

The Cash Surrender Value will be determined as of the next valuation following
receipt of your Written Request. We may delay payment of the Cash Surrender
Value of the Sub-Accounts for a period of not more than five days after we
receive your Written Request. We may delay payment of the Cash Surrender Value
of the Fixed Account for a period of not more than six months after we receive
your Written Request.

CASH SURRENDER VALUE
The Cash Surrender Value is equal to the Contract Value less any amounts
deducted on surrender which are shown on the CONTRACT SPECIFICATIONS and any
applicable premium tax not previously deducted.

CONTRACT CONTINUATION

L-14531 10 TIC Ed. 01-96

<PAGE> 44

DEATH BENEFIT PROVISIONS

DEATH OF ANNUITANT
A death benefit is payable to the Beneficiary upon the death of the Annuitant
before the Maturity Date, unless prior to the Maturity Date there is a
contingent annuitant surviving. A death benefit is also payable under those
Settlement Options which provide for death benefits. We will pay the Beneficiary
the death benefit in a single sum as described below upon receiving Due Proof of
Death. A Beneficiary may request that a death benefit payable under this
contract be applied to a Settlement Option subject to the provisions of this
contract and the current Tax Law Qualification Rider.

DEATH OF OWNER WITH ANNUITANT SURVIVING
If the owner dies (including the first of joint owners) before the Maturity Date
and with the Annuitant surviving, we will recalculate the value of the death
benefit under provisions of DEATH PROCEEDS PRIOR TO THE MATURITY DATE below. The
value of the death benefit, as recalculated, will be paid in a single lump sum
or by other election to the party taking proceeds under the current Tax Law
Qualification Rider. The party must take distributions no later than under the
applicable elections of that provision. All references to annuitant in the DEATH
PROCEEDS PRIOR TO MATURITY DATE provision will be replaced with reference to the
owner.

DEATH PROCEEDS PRIOR TO THE MATURITY DATE
If the Annuitant dies before age 75 and before the Maturity Date, we will pay
the Beneficiary the greatest of a), b), or c) below, less any applicable premium
tax or prior surrenders not previously deducted as of the Death Report Date:

a. the Contract Value;

b. the total purchase payments under the contract; or

c. the death benefit value, which will be reset once every five years
to the then current Contract Value, immediately preceding the Death
Report Date.

If the Annuitant dies on or after age 75, but before age 85 and before the
Maturity Date, we will pay the Beneficiary the greatest of a), b), or c) below,
less any applicable premium tax or prior surrenders not previously deducted as
of the Death Report Date:

a. the Contract Value;

b. the total purchase payments under the contract; or

c. the death benefit value, which will be reset once every five years
to the then current Contract Value, occurring on or before the
Annuitant's 75th birthday.

If the Annuitant dies on or after age 85 and before the Maturity Date, we will
pay the Beneficiary the Contract Value less any applicable premium tax as of the
Death Report Date.

DEATH PROCEEDS AFTER THE MATURITY DATE
If the Annuitant dies on or after the Maturity Date, we will pay the Beneficiary
a death benefit consisting of any benefit remaining under the Annuity or Income
option then in effect.

L-14531 11 TIC Ed. 01-96

<PAGE> 45

SETTLEMENT PROVISIONS

MATURITY DATE

Additionally, to the extent permitted by law, at least 30 days before the
original Maturity Date, you may change the Maturity Date by Written Request to
any time prior to the Annuitant's 85th birthday or to a later date with our
consent.

ELECTION OF SETTLEMENT OPTIONS

During the Annuitant's lifetime, if no election has been made on the Maturity
Date, we will pay to you the first of a series of monthly Annuity payments based
on the life of the Annuitant, in accordance with Annuity Option 2, with 120
monthly payments assured.

MINIMUM AMOUNTS

ALLOCATION OF ANNUITY

VARIABLE ANNUITY

L-14531 12 TIC Ed. 01-96

<PAGE> 46

The Value of an Annuity Unit as of any date other than a Valuation Date will be
equal to its value as of the next succeeding Valuation Date.

FIXED ANNUITY

ANNUITY OPTIONS

OPTION 1. LIFE ANNUITY - NO REFUND
We will make monthly annuity payments during the lifetime of the person on whose
life the payments are based, ending with the last monthly payment preceding
death.

No more payments will be made after the death of the survivor.

On the death of the primary payee, if survived by the secondary payee, we will
continue to make monthly Annuity payments to the secondary payee in an amount
equal to 50% of the payments which would have been made during the lifetime of
the primary payee.

No further payments will be made following the death of the survivor.

OPTION 5. OTHER ANNUITY OPTIONS
We will make any other arrangements for Annuity payments as may be mutually
agreed.

L-14531 13 TIC Ed. 01-96

<PAGE> 47

INCOME OPTIONS

OPTION 1. PAYMENTS OF A FIXED AMOUNT
We will make equal payments each month in the amount elected until the Cash
Surrender Value applied under this option is gone.

The first monthly payment will be paid from each Sub-Account in proportion to
its Cash Surrender Values applied.

OPTION 3. OTHER INCOME OPTIONS
We will make any other arrangements for Income payments as may be mutually
agreed.

L-14531 14 TIC Ed. 01-96

<PAGE> 48

GENERAL PROVISIONS

THE CONTRACT
The entire contract between you and us consists of the contract and all attached
pages.

CONTRACT CHANGES
The only way this contract may be changed is by a written endorsement signed by
one of our officers.

SUBSTITUTION OF SEPARATE ACCOUNT OR FUNDING OPTIONS
If it is not possible to continue to offer a Separate Account or Funding Option,
or in our judgment becomes inappropriate for the purposes of this contract, we
may substitute another Separate Account or Funding Option without your consent,
upon approval of the Insurance Commissioner. Substitution may be made with
respect to both existing investments and investment of future premium payments.
However, no such substitution will be made without notice to you and without
prior approval of the Securities and Exchange Commission, to the extent required
by law.

MISSTATEMENT
If the Annuitant's or owner's sex or date of birth was misstated, all benefits
of this contract are what the purchase payment paid would have purchased at the
correct sex and age. Proof of the Annuitant's and owner's age may be filed at
any time at Our Office.

INCONTESTABILITY
We will not contest this contract from its Contract Date.

VOTING RIGHTS
If required by federal law, you may have the right to vote at the meetings of
the Shareholders of the Funding Option. If you have voting rights, we will send
a notice to you telling you the time and place of a meeting. The notice will
also explain matters to be voted upon and how many votes you may exercise.

MORTALITY AND EXPENSES
Our actual mortality and expense experience will not affect the amount of any
Annuity or Income payments or any other values under this contract.

NON-PARTICIPATING
This contract does not share in our surplus earnings, so you will receive no
dividends under it.

CHANGES IN TAXES BASED UPON PREMIUM OR VALUE
If there is any change in a law assessing taxes against us based upon the
premiums or value of this contract, we reserve the right to charge you
proportionately for that tax. This would include a tax based upon our realized
net capital gains in the Sub-Accounts and on earnings in the Fixed Account, on
which we are not currently taxed.

CONFORMITY WITH STATE AND FEDERAL LAWS
This contract is governed by the law of the state in which it is delivered. Any
paid-up Annuity, Cash Surrender or death benefits that are available under this
contract are not less than the minimum benefits required by the statutes of the
state in which this contract is delivered.

Upon receiving appropriate state approval, we may at any time make any changes,
including retroactive changes, in this contract to the extend that the change is
required to meet the requirements of any law or regulation issued by an
governmental agency to which we or you are subject.

L-14531 15 TIC Ed. 01-96

<PAGE> 49

EMERGENCY PROCEDURE
We reserve the right to suspend or postpone the date of any payment of any
benefit or values for any Valuation Period (1) when the New York Stock Exchange
is closed; (2) when trading on the Exchange is restricted; (3) when an emergency
exists as determined by the Securities and Exchange Commission so that disposal
of the securities held in the Sub-Accounts is not reasonably practicable or it
is not reasonably practicable to determine the value of the Sub-Account's net
assets, or (4) during any other period when the Securities and Exchange
Commission, by order, so permits for the protection of security holders. Any
provision of this contract which specifies a Valuation Date will be superseded
by this Emergency Procedure.

L-14531 16 TIC Ed. 01-96

<PAGE> 50

TABLE OF VALUES
GUARANTEED VALUES OF THE FIXED ACCOUNT PER $1,000 OF NET PURCHASE PAYMENT
APPLIED

L-14531CS 17 TIC Ed. 06-97

<PAGE> 51

This Page Intentionally Left Blank

L-14531 18 TIC Ed. 01-96

<PAGE> 52

LIFE ANNUITY TABLES
DOLLAR AMOUNT OF THE FIRST MONTHLY ANNUITY PAYMENT WHICH IS PURCHASED
WITH EACH $1,000 APPLIED
OPTIONS 1 AND 2-SINGLE LIFE ANNUITIES

<TABLE>
<CAPTION>
120 180 240
ADJUSTED ADJUSTED MONTHLY MONTHLY MONTHLY
AGE AGE NO PAYMENTS PAYMENTS PAYMENTS
MALE FEMALE REFUND ASSURED ASSURED ASSURED
<S> <C> <C> <C> <C> <C>
50 54 $4.13 $4.10 $4.06 $4.00
51 55 4.20 4.17 4.13 4.06
52 56 4.28 4.25 4.20 4.12
53 57 4.37 4.33 4.27 4.18
54 58 4.46 4.41 4.35 4.25
55 59 4.55 4.50 4.42 4.31
56 60 4.65 4.59 4.51 4.38
57 61 4.76 4.69 4.59 4.44
58 62 4.87 4.79 4.68 4.51
59 63 4.99 4.90 4.77 4.58
60 63 5.12 5.01 4.86 4.65
61 65 5.26 5.13 4.96 4.72
62 66 5.40 5.25 5.06 4.79
63 67 5.56 5.39 5.16 4.85
64 68 5.72 5.52 5.27 4.92
65 69 5.90 5.67 5.37 4.99
66 70 6.09 5.82 5.48 5.05
67 71 6.29 5.97 5.59 5.11
68 72 6.51 6.13 5.69 5.16
69 73 6.74 6.30 5.80 5.21
70 74 6.99 6.48 5.90 5.26
71 75 7.26 6.66 6.01 5.31
72 76 7.54 6.84 6.11 5.34
73 77 7.86 7.03 6.20 5.38
74 78 8.19 7.22 6.29 5.41
75 79 8.55 7.41 6.38 5.43
</TABLE>

OPTION 3 - JOINT AND LAST SURVIVOR LIFE ANNUITY

<TABLE>
<CAPTION>
ADJUSTED
AGE OF ADJUSTED AGE OF SECOND LIFE
FIRST LIFE M-51 M-56 M-58 M-61 M-63 M-66 M-71
MALE FEMALE F-55 F-60 F-62 F-65 F-67 F-70 F-75
<S> <C> <C> <C> <C> <C> <C> <C> <C>
50 54 $3.69 $3.81 $3.85 $3.91 $3.94 $3.98 $4.04
55 59 3.82 3.99 4.06 4.15 4.20 4.28 4.38
57 61 3.87 4.06 4.14 4.25 4.32 4.41 4.53
60 64 3.93 4.17 4.26 4.40 4.48 4.61 4.78
62 66 3.97 4.23 4.34 4.49 4.60 4.74 4.96
65 69 4.02 4.32 4.44 4.63 4.76 4.95 5.24
70 74 4.09 4.43 4.59 4.83 5.01 5.27 5.72
</TABLE>

<TABLE>
<S> <C> <C> <C>
Calendar Year in which
First Payment is Due . . 1991-2000 2001-2010 2011 & later
Adjusted Age is Actual Age plus 2 plus 1 plus 0
</TABLE>

L-14532 19 TIC Ed. 01-96

<PAGE> 53

OPTION 4 - JOINT AND LAST SURVIVOR LIFE ANNUITY
ANNUITY REDUCES ON DEATH OF PRIMARY PAYEE

<TABLE>
<CAPTION>
ADJUSTED AGE OF
PRIMARY PAYEE ADJUSTED AGE OF SECOND PAYEE

MALE 50 55 60 65
<S> <C> <C> <C> <C>
50 $3.82 $3.90 $3.96 $4.01
55 4.05 4.15 4.25 4.34
60 4.31 4.45 4.59 4.73
65 4.60 4.78 4.98 5.19
70 4.93 5.16 5.43 5.71
</TABLE>

<TABLE>
<CAPTION>
ADJUSTED AGE OF
PRIMARY PAYEE ADJUSTED AGE OF SECOND PAYEE
FEMALE 50 55 60 65
<S> <C> <C> <C> <C>
50 $3.70 $3.75 $3.79 $3.81
55 3.93 4.00 4.06 4.11
60 4.19 4.30 4.40 4.48
65 4.48 4.64 4.79 4.92
70 4.81 5.03 5.25 5.46
</TABLE>

<TABLE>
<S> <C> <C> <C>
Calendar Year in which
First Payment is Due . . 1991-2000 2001-2010 2011 & later
Adjusted Age is Actual Age plus 2 plus 1 plus 0
</TABLE>

L-14532 20 TIC Ed. 01-96

<PAGE> 54

TAX LAW QUALIFICATION RIDER

This rider is made a part of this contract as its Contract Date in order to
comply with the tax rules under Section 72(s) of the Code for required
distributions upon the death of any contract owner. The following conditions,
restrictions and limitations must apply to maintain the tax qualified status of
your Annuity.

REQUIRED DISTRIBUTIONS WHERE OWNER AND ANNUITANT DIE SIMULTANEOUSLY

If you are the owner and the Annuitant or you are the owner and you die
simultaneously with the Annuitant before payment of any Annuity or Income Option
begins, an amount equal to the Death Benefit will be distributed within five
years of your death to the contract Beneficiary unless:

a. the Beneficiary elects by Written Request to have the proceeds
distributed over the Beneficiary's life or over a period not
extending beyond life expectancy, and the payments begin within one
year of your death; or

b. the sole Beneficiary is your spouse who elects by Written Request to
continue the contract as the owner and Annuitant.

If you are the owner and the Annuitant or you are the owner and you die
simultaneously with the Annuitant after an Annuity or Income option begins but
before your entire interest has been distributed, the remaining proceeds of the
contract will be distributed at least as rapidly as they were being distributed
under the method of payment in effect at the time of your death.

The death of the first joint owner triggers these distribution requirements.

NON-NATURAL OWNER HOLDING FOR NATURAL PERSONS

The above rules also apply if you are not an individual and the primary
Annuitant dies before payment of an Annuity or Income Option begins. Payments
will be made to the Beneficiary. The primary Annuitant is the first-named
Annuitant and the individual who is of primary importance in affecting the
timing or amount of payments under the contract.

If you are not an individual and the primary annuitant dies after payment of an
Annuity or Income option begins, the remaining proceeds of the contract will be
distributed at least as rapidly as they were being distributed under the method
of payment in effect at the time of the primary Annuitant's death.

REQUIRED DISTRIBUTIONS WHERE OWNER AND ANNUITANT DO NOT DIE SIMULTANEOUSLY

If you are the owner but not the Annuitant, and you die before the Annuitant and
before payment of an Annuity or Income Option begins, an amount equal to the
Death Benefit will be distributed within five years of your death to the joint
owner surviving you. In this circumstance, the joint owner is the "designated
beneficiary" referred to in Section 72(s) of the Code, and his or her rights
preempt those of the Beneficiary named in a Written Request. The distribution
may be made over a period that exceeds five years from your death or postponed
by your spouse if:

a. the joint owner elects by Written Request to have the proceeds
distributed over his or her life or over a period not extending
beyond life expectancy, and the payments begin within one year of
your death; or

b. the sole joint owner is your spouse, who elects by Written Request
to continue the contract as owner.

The joint owner is determined by contract designation. If there is no joint
owner or Beneficiary surviving you, ownership of this contract passes to your
estate. The estate or the individual taking the contract benefits through your
estate must take complete distribution within five years of your death.

If you are the owner but not the Annuitant, and you die after payment of an
Annuity or Income Option begins, the remaining proceeds of the contract will be
distributed at least as rapidly as they were being distributed under the method
of payment in effect at the time of your death.

The death of the first joint owner triggers these distribution requirements.

L-14533 TIC Ed. 01-96

<PAGE> 55

ADMINISTRATIVE COMPLIANCE

If the Code and related law, regulations and rulings require a distribution
other than described above in order to keep this Annuity contract qualified
under the Code, we will administer the contract in accordance with these laws,
regulations, and rulings. We will provide you with a revised rider describing
any necessary changes, following all regulatory approvals

THE TRAVELERS INSURANCE COMPANY

/s/ M.A. CARPENTER

CHAIRMAN

L-14533 TIC Ed. 01-96

<PAGE> 56

INDIVIDUAL DEFERRED VARIABLE ANNUITY CONTRACT

Non Tax Qualified Non-Participating

L-14529 TIC Ed. 01-96

<PAGE> 57

ENHANCED DEATH BENEFIT ENDORSEMENT

This endorsement is made a part of this contract as of the date it is attached
to the contract.

The "DEATH PROCEEDS PRIOR TO THE MATURITY DATE" provision is amended by deleting
the provision and replacing it with the following:

DEATH PROCEEDS PRIOR TO THE MATURITY DATE

(1) the Contract Value on the Death Report Date; or

(2) the total Purchase Payments made under the contract, less the total of
any partial surrenders; or

STEP-UP DEATH BENEFIT VALUE

PARTIAL SURRENDER REDUCTION

THE TRAVELERS INSURANCE COMPANY

/s/ M.A. CARPENTER

President

L-22200 TIC Ed. 07-98

<PAGE> 58

STANDARD DEATH BENEFIT ENDORSEMENT

This endorsement is made a part of this contract as of the date it is attached
to the contract.

The "DEATH PROCEEDS PRIOR TO THE MATURITY DATE" provision is amended by deleting
the provision and replacing it with the following:

DEATH PROCEEDS PRIOR TO THE MATURITY DATE

(1) the Contract Value on the Death Report Date; or

(2) the total Purchase Payments made under the contract, less the total of
any prior surrenders.

THE TRAVELERS INSURANCE COMPANY

/s/ M.A. CARPENTER

President

L-22203 TIC Ed. 07-98

<PAGE> 1
EXHIBIT 5

[TRAVELERS LOGO]

TRAVELERS PREMIER ADVISERS - ASSET MANAGER
DATA COLLECTION FORM

The Travelers Insurance Company and its Affiliates
One Tower Square, Hartford, CT 06183-8034
- --------------------------------------------------------------------------------
ISSUING COMPANY
- --------------------------------------------------------------------------------
(Check one):
[ ] The Travelers Insurance Company (KS, ME, NC, NH, PR, TN, WY)
[ ] The Travelers Life and Annuity Company (All other jurisdictions except NY)
- --------------------------------------------------------------------------------
OWNER INFORMATION (The Owner will be used for all correspondence and tax
reporting purposes)
- --------------------------------------------------------------------------------
Name Date of Birth (DOB):
- --------------------------------------------------------------------------------
Address
- --------------------------------------------------------------------------------
SS# Sex [ ] M [ ] F U.S. Citizen [ ] Y [ ] N
- --------------------------------------------------------------------------------
[ ] Joint Owner (Nonqualified only) Name:
- --------------------------------------------------------------------------------
Relationship to Owner: SS# DOB
- --------------------------------------------------------------------------------
ANNUITANT (IF DIFFERENT FROM OWNER) (If no Annuitant is specified, the Owner
stated above will be the Annuitant.)
- --------------------------------------------------------------------------------
Name
- --------------------------------------------------------------------------------
SS# Sex [ ] M [ ] F DOB:
- --------------------------------------------------------------------------------
[ ] Contingent Annuitant (Nonqualified only) Name:
- --------------------------------------------------------------------------------
SS# Sex [ ] M [ ] F DOB:
- --------------------------------------------------------------------------------
BENEFICIARY INFORMATION
- --------------------------------------------------------------------------------
PRIMARY CONTINGENT FULL NAME RELATIONSHIP TO OWNER % TO RECEIVE
- --------------------------------------------------------------------------------
[ ] [ ]
[ ] [ ]
[ ] [ ]
- --------------------------------------------------------------------------------
TYPE OF PLAN PURCHASE AMOUNT
- --------------------------------------------------------------------------------
[ ] Nonqualified [ ] IRA Rollover/Transfer (minimum
[ ] 403(b) TSA Rollover/Transfer [ ] Roth IRA Rollover/Transfer $20,000)
[ ] Other: [ ] Roth IRA Conversion $
- --------------------------------------------------------------------------------
INVESTMENT OPTIONS (total must equal 100%)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
FUND PERCENTAGE FUND PERCENTAGE
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MAS Mid Cap Value Portfolio % Van Kampen Domestic Income Portfolio %
MAS Value Portfolio % Van Kampen Emerging Growth Portfolio %
Morgan Stanley Emerging Markets Equity % Van Kampen Enterprise Portfolio %
Morgan Stanley Real Estate Securities % Van Kampen Government Portfolio %
Salomon Brothers Capital Fund % Van Kampen Growth and Income Portfolio %
Salomon Brothers High Yield Bond Fund % Van Kampen Money Market Portfolio %
Salomon Brothers Investors Fund % Travelers Fixed Account %
Salomon Brothers Strategic Bond Fund % Other %
- -------------------------------------------------------------------------------------------------------
</TABLE>
DEATH BENEFIT

- --------------------------------------------------------------------------------
[ ] Standard [ ] Enhanced (if no option is checked, you will receive the
Standard Death Benefit)
- --------------------------------------------------------------------------------
REPLACEMENT INFORMATION
- --------------------------------------------------------------------------------
Will the contract applied for replace any existing annuity contract or life
insurance policy? [ ] Y [ ] N

If yes, please specify company name & contract #:
- --------------------------------------------------------------------------------
<PAGE> 2
- --------------------------------------------------------------------------------
ACKNOWLEDGMENT
- --------------------------------------------------------------------------------
I understand the contract will take effect when the first purchase payment is
received and the application is approved in the Travelers Home Office. I
UNDERSTAND THAT ANNUITY PAYMENTS AND VALUES PROVIDED BY THE CONTRACT APPLIED
FOR, WHEN BASED ON INVESTMENT EXPERIENCE OF A SEPARATE ACCOUNT, ARE VARIABLE AND
ARE NOT GUARANTEED AS TO A FIXED DOLLAR AMOUNT. No representative is authorized
to make changes to the contract or application. I ACKNOWLEDGE RECEIPT OF A
CURRENT PROSPECTUS. For Nonqualified contracts, if the owner is a trust, I/we
hereby certify the trust is solely for the benefit of a natural person and not a
Deferred Compensation Plan. For Nonqualified contracts, if the Owner dies and is
survived by the Annuitant before payments begin under an Annuity or Income
Option, the surviving Joint Owner assumes full ownership of the contract and not
the beneficiary named by Written Request.

Any person who knowingly, and with intent to defraud any insurance company or
other person, files an application for insurance or a statement of claim
containing any materially false information, or who conceals, for the purpose of
misleading, any information concerning any fact material thereto, commits a
fraudulent act which may be a crime subjecting such person to criminal and civil
penalties.
- --------------------------------------------------------------------------------
Owner's Signature Date:
- --------------------------------------------------------------------------------
Joint Owner's Signature Date:
- --------------------------------------------------------------------------------
City, State where signed:
- --------------------------------------------------------------------------------

FINANCIAL ANALYST USE ONLY
- --------------------------------------------------------------------------------
I acknowledge that all data representations and signatures were recorded by me
or in my presence in response to my inquiry and request and that all such
representations and signatures are accurate and valid to the best of my
knowledge and belief.

Will the contract applied for replace any existing annuity contract or life
insurance policy? [ ] Y [ ] N
- --------------------------------------------------------------------------------
FA's Name Date
- --------------------------------------------------------------------------------
FA's Signature SS# License #
- --------------------------------------------------------------------------------
FA Phone #: FA Fax #:
- --------------------------------------------------------------------------------
Broker/Dealer
- --------------------------------------------------------------------------------

<PAGE> 1
EXHIBIT 10

Consent of Independent Certified Public Accountants

The Board of Directors
The Travelers Life and Annuity Company

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

KPMG Peat Marwick LLP

Hartford, Connecticut
November 6, 1998

<PAGE> 1
EXHIBIT 13

THE TRAVELERS SEPARATE ACCOUNT EIGHT FOR VARIABLE ANNUITIES

SCHEDULE FOR COMPUTATION OF TOTAL RETURN CALCULATIONS

The standardized and nonstandardized average annual total returns are computed
according to the formula described below. A hypothetical initial investment of
$1,000 is applied to the Funding Option, and then related to ending redeemable
values as of the most recent fiscal year end, for the calendar year-to-date
(nonstandardized only), and over a 1-year, 3-year (nonstandardized only),
5-year, and 10-year period, or since inception if a Funding Option has not been
in existence for one of the prescribed periods.

T = (ERV/P) 1/n -1 where:

T = average annual total return

P = a hypothetical initial payment of $1,000

n = the applicable year (1, 3, 5, 10) or portion thereof

ERV = ending redeemable value of a hypothetical $1,000 payment made at
the beginning of each of the periods

Both the standardized and nonstandardized performance returns reflect the
deduction for the management fees and other expenses for a Funding Option, the
mortality and expense risk charge(s) and the administrative expense charge.

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

Standardized Method

The standardized returns take into consideration all fees and/or charges
applicable to the Funding Option or contract, for both the standard death
benefit and the enhanced death benefit. Standardized performance figures will
only be available after the Separate Account has begun operating.

Under the standardized method, the annual contract administrative charge is
reflected in the calculation and is assumed to be deducted at the end of August
each year. It is expressed as a percentage of assets based on the actual fees
collected (or, anticipated, if a new product) divided by the average net assets
(or, anticipated average net assets, if a new product) for contracts sold under
the prospectus for each year for which performance is shown.

Nonstandardized Method

Nonstandardized returns do not reflect the deduction of the annual
administrative charge, which, if reflected, would decrease the level of
performance shown.

For a Schedule of the Computation of the Historical Total Return Quotations, see
attached.
<PAGE> 2
EXHIBIT 13

Travelers Premier Advisers Asset Manager Nonstandardized Performance (Minus Fees
and Deferred Sales Charge)

Cummulative
Performance
Admin plus 1, minus Inception
Fund Name Date Unit Value Year Fee Amin Fee 1 Year 5 Year 10 Year Date

M & E CHARGE 1.60%
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Morgan Stanley Emerging Markets Equity 10/1/96 1 1996 0.000% 1
Portfolio 12/31/96 0.975779782 1996 0.000% 0.975779782
8/31/97 1.149284806 1997 0.067% 1.148631034
12/31/97 0.963169706 1997 0.067% 0.961852222
Account Value $986 $962
Surrender Value $986 $962
Returns -1.43% -3.07% 10/1/96

Morgan Stanley Global Equity 1/3/97 1 1997 0.000% 1
Portfolio 8/31/97 1.140139717 1997 0.067% 1.139469717
12/31/97 1.181701271 1997 0.067% 1.180243403
Account Value $1,180
Surrender Value $1,180
Returns 18.02% 1/3/97

Morgan Stanley Real Estate Securities 7/3/95 1 1995 0.000% 1
Portfolio 8/31/95 1.026377358 1995 0.067% 1.025707358
12/31/95 1.074880711 1995 0.000% 1.074179049
8/31/96 1.211008421 1996 0.067% 1.209498198
12/31/96 1.485028491 1996 0.000% 1.483176543
8/31/97 1.622527702 1997 0.067% 1.619510553
12/31/97 1.776018346 1997 0.067% 1.771630704
Account Value $1,194 $1,772
Surrender Value $1,194 $1,772
Returns 19.45% 25.72% 7/3/95

MS Mid Cap Value Portfolio 1/2/97 1 1997 0.000% 1
8/31/97 1.140065027 1997 0.067% 1.139395027
12/31/97 1.387537303 1997 0.067% 1.385958472
Account Value $1,386
Surrender Value $1,386
Returns 38.60% 1/2/97

MS Value Portfolio 1/2/97 1 1997 0.000% 1
8/31/97 1.197569378 1997 0.067% 1.196899378
12/31/97 1.190955715 1997 0.067% 1.189487492
Account Value $1,189
Surrender Value $1,189
Returns 18.95% 1/2/97

Salomon Brothers Capital Fund * 2/17/98

Salomon Brothers High Yield Bond Fund * 5/1/98

Salomon Brothers Investors Fund * 2/17/98

Salomon Brothers Strategic Bond Fund * 2/17/98
</TABLE>

1
<PAGE> 3

Travelers Premier Advisers Asset Manager Nonstandardized Performance (Minus Fees
and Deferred Sales Charge)

<TABLE>
<CAPTION>
Cummulative
Performance
Admin plus 1, minus Inception
Fund Name Date Unit Value Year Fee Amin Fee 1 Year 5 Year 10 Year Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Van Kampen American Capital Domestic 11/4/87 1 1987 0.000% 1
Income Portfolio 8/31/88 1.108437238 1988 0.067% 1.107767238
12/31/88 1.145762766 1988 0.000% 1.145070204
8/31/89 1.207727094 1989 0.067% 1.206229881
12/31/89 1.066178288 1989 0.000% 1.064856552
8/31/90 1.023383756 1990 0.067% 1.021401618
12/31/90 0.973168505 1990 0.000% 0.971283627
8/31/91 1.090217138 1991 0.067% 1.087454794
12/31/91 1.161266804 1991 0.000% 1.158324437
8/31/92 1.268607282 1992 0.067% 1.264616864
12/31/92 1.285767433 1992 0.000% 1.281723038
8/31/93 1.465829831 1993 0.067% 1.460360293
12/31/93 1.472146298 1993 0.000% 1.466653191
8/31/94 1.373667669 1994 0.067% 1.367559363
12/31/94 1.386001597 1994 0.000% 1.379838446
8/31/95 1.582006248 1995 0.067% 1.574047029
12/31/95 1.655890498 1995 0.000% 1.64755956
8/31/96 1.63472516 1996 0.067% 1.625396842
12/31/96 1.738338972 1996 0.000% 1.728419397
8/31/97 1.837913847 1997 0.067% 1.826268022
12/31/97 1.914704527 1997 0.067% 1.901348523
Account Value $1,100 $1,483 $1,901
Surrender Value $1,100 $1,483 $1,901
Returns 10.01% 8.20% 6.53% 11/4/87

Van Kampen American Capital Emerging 7/3/95 1 1995 0.000% 1
Growth 8/31/95 1.097282678 1995 0.067% 1.096612678
12/31/95 1.162065061 1995 0.000% 1.161355505
8/31/96 1.276433289 1996 0.067% 1.274875791
12/31/96 1.334097869 1996 0.000% 1.33247001
8/31/97 1.561991647 1997 0.067% 1.559192957
12/31/97 1.58143469 1997 0.067% 1.577556505
Account Value $1,184 $1,578
Surrender Value $1,184 $1,578
Returns 18.39% 20.02% 7/3/95

Van Kampen American Capital Enterprise 8/31/87 1.205675831 1987 0.067% 1
Portfolio 8/31/88 0.840652241 1988 0.067% 0.69657566
12/31/88 0.902033652 1988 0.000% 0.747437116
8/31/89 1.160610551 1989 0.067% 0.961196601
12/31/89 1.192002696 1989 0.000% 0.987195006
8/31/90 1.063503446 1990 0.067% 0.880112838
12/31/90 1.092713052 1990 0.000% 0.904285537
8/31/91 1.324063137 1991 0.067% 1.095135727
12/31/91 1.467336112 1991 0.000% 1.21363714
8/31/92 1.37573572 1992 0.067% 1.137061104
12/31/92 1.552056152 1992 0.000% 1.282791932
8/31/93 1.61950295 1993 0.067% 1.337678001
12/31/93 1.664708685 1993 0.000% 1.375017061
8/31/94 1.677943717 1994 0.067% 1.385027679
12/31/94 1.582791346 1994 0.000% 1.30648591
8/31/95 1.969903216 1995 0.067% 1.625144914
12/31/95 2.134626572 1995 0.000% 1.761039572
8/31/96 2.329150825 1996 0.067% 1.920339693
12/31/96 2.621958229 1996 0.000% 2.16175372
8/31/97 3.25507262 1997 0.067% 2.682295884
12/31/97 3.372540772 1997 0.067% 2.777296691
Account Value $1,285 $2,165 $2,777
Surrender Value $1,285 $2,165 $2,777
Returns 28.47% 16.70% 10.38% 8/31/87
</TABLE>

2
<PAGE> 4

Travelers Premier Advisers Asset Manager Nonstandardized Performance (Minus Fees
and Deferred Sales Charge)

<TABLE>
<CAPTION>
Cummulative
Performance
Admin plus 1, minus Inception
Fund Name Date Unit Value Year Fee Amin Fee 1 Year 5 Year 10 Year Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Van Kampen American Capital Government 8/31/87 0.975565071 1987 0.067% 1
Portfolio 8/31/88 1.01802576 1988 0.067% 1.0428542
12/31/88 1.043771887 1988 0.000% 1.069228245
8/31/89 1.131631004 1989 0.067% 1.158513758
12/31/89 1.174426731 1989 0.000% 1.202326131
8/31/90 1.185900027 1990 0.067% 1.213266425
12/31/90 1.251861791 1990 0.000% 1.280750354
8/31/91 1.339894792 1991 0.067% 1.369956744
12/31/91 1.432251862 1991 0.000% 1.464385942
8/31/92 1.479968164 1992 0.067% 1.512191671
12/31/92 1.490340034 1992 0.000% 1.522789369
8/31/93 1.588511816 1993 0.067% 1.622078386
12/31/93 1.582158267 1993 0.000% 1.615590582
8/31/94 1.508075253 1994 0.067% 1.538859687
12/31/94 1.484905813 1994 0.000% 1.515217288
8/31/95 1.633785305 1995 0.067% 1.666120671
12/31/95 1.712584668 1995 0.000% 1.746479606
8/31/96 1.655669021 1996 0.067% 1.687267361
12/31/96 1.720939638 1996 0.000% 1.753783664
8/31/97 1.783708366 1997 0.067% 1.816575294
12/31/97 1.856639944 1997 0.067% 1.889633616
Account Value $1,077 $1,241 $1,890
Surrender Value $1,077 $1,241 $1,890
Returns 7.75% 4.41% 6.35% 8/31/87

Van Kampen American Capital Growth 12/23/96 1 1996 0.000% 1
and Income 12/31/96 0.996649315 1996 0.000% 0.996649315
8/31/97 1.170405974 1997 0.067% 1.169738219
12/31/97 1.192627067 1997 0.067% 1.19116291
Account Value $1,195 $1,191
Surrender Value $1,195 $1,191
Returns 19.52% 18.67% 12/23/96

Van Kampen American Capital Money Market 8/31/87 1.061225385 1987 0.067% 1
Portfolio 8/31/88 1.116592662 1988 0.067% 1.051502968
12/31/88 1.140662809 1988 0.000% 1.074169989
8/31/89 1.198206045 1989 0.067% 1.127639155
12/31/89 1.225254731 1989 0.000% 1.153094842
8/31/90 1.276035033 1990 0.067% 1.200111927
12/31/90 1.300212305 1990 0.000% 1.22285067
8/31/91 1.336454773 1991 0.067% 1.256117428
12/31/91 1.351311131 1991 0.000% 1.270080737
8/31/92 1.368637761 1992 0.067% 1.285514869
12/31/92 1.374482929 1992 0.000% 1.291005037
8/31/93 1.383726746 1993 0.067% 1.298822466
12/31/93 1.388644579 1993 0.000% 1.303438545
8/31/94 1.403678288 1994 0.067% 1.316676495
12/31/94 1.377424956 1994 0.000% 1.292050378
8/31/95 1.45358535 1995 0.067% 1.362624579
12/31/95 1.471200487 1995 0.000% 1.379137416
8/31/96 1.502348689 1996 0.067% 1.40741244
12/31/96 1.518503653 1996 0.000% 1.422546542
8/31/97 1.552157994 1997 0.067% 1.453121095
12/31/97 1.570075615 1997 0.067% 1.468921875
Account Value $1,033 $1,138 $1,469
Surrender Value $1,033 $1,138 $1,469
Returns 3.26% 2.61% 3.79% 8/31/87
</TABLE>

3
<PAGE> 5

Travelers Premier Advisers Asset Manager Nonstandardized Performance (Minus Fees
and Deferred Sales Charge)

<TABLE>
<CAPTION>
Cummulative
Performance
Admin plus 1, minus Inception
Fund Name Date Unit Value Year Fee Amin Fee 1 Year 5 Year 10 Year Date

M & E CHARGE 1.75%
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Morgan Stanley Emerging Markets Equity 10/1/96 1 1996 0.000% 1
Portfolio 12/31/96 0.975371863 1996 0.000% 0.975371863
8/31/97 1.147725721 1997 0.067% 1.147072222
12/31/97 0.961355041 1997 0.067% 0.96003912
Account Value $984 $960
Surrender Value $984 $960
Returns -1.57% -3.21% 10/1/96

Morgan Stanley Global Equity 1/3/97 1 1997 0.000% 1
Portfolio 8/31/97 1.139033311 1997 0.067% 1.138363311
12/31/97 1.179965383 1997 0.067% 1.178508602
Account Value $1,179
Surrender Value $1,179
Returns 17.85% 1/3/97

Morgan Stanley Real Estate Securities 7/3/95 1 1995 0.000% 1
Portfolio 8/31/95 1.026131657 1995 0.067% 1.025461657
12/31/95 1.074098859 1995 0.000% 1.073397539
8/31/96 1.208927056 1996 0.067% 1.207418526
12/31/96 1.481763777 1996 0.000% 1.479914794
8/31/97 1.61737571 1997 0.067% 1.614365964
12/31/97 1.769491424 1997 0.067% 1.765116983
Account Value $1,193 $1,765
Surrender Value $1,193 $1,765
Returns 19.27% 25.53% 7/3/95

MS Mid Cap Value Portfolio 1/2/97 1 1997 0.000% 1
8/31/97 1.138951685 1997 0.067% 1.138281685
12/31/97 1.385517571 1997 0.067% 1.383939877
Account Value $1,384
Surrender Value $1,384
Returns 38.39% 1/2/97

MS Value Portfolio 1/2/97 1 1997 0.000% 1
8/31/97 1.196409755 1997 0.067% 1.195739755
12/31/97 1.189203173 1997 0.067% 1.187736063
Account Value $1,188
Surrender Value $1,188
Returns 18.77% 1/2/97

Salomon Brothers Capital Fund * 2/17/98

Salomon Brothers High Yield Bond Fund * 5/1/98

Salomon Brothers Investors Fund * 2/17/98

Salomon Brothers Strategic Bond Fund * 2/17/98
</TABLE>

4
<PAGE> 6

Travelers Premier Advisers Asset Manager Nonstandardized Performance (Minus Fees
and Deferred Sales Charge)

<TABLE>
<CAPTION>
Cummulative
Performance
Admin plus 1, minus Inception
Fund Name Date Unit Value Year Fee Amin Fee 1 Year 5 Year 10 Year Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Van Kampen American Capital Domestic 11/4/87 1 1987 0.000% 1
Income Portfolio 8/31/88 1.107080728 1988 0.067% 1.106410728
12/31/88 1.143795468 1988 0.000% 1.143103248
8/31/89 1.204452995 1989 0.067% 1.202958187
12/31/89 1.062747669 1989 0.000% 1.061428726
8/31/90 1.019058049 1990 0.067% 1.017082171
12/31/90 0.96856312 1990 0.000% 0.966685148
8/31/91 1.083989769 1991 0.067% 1.081240315
12/31/91 1.154062137 1991 0.000% 1.15113495
8/31/92 1.25948684 1992 0.067% 1.25552099
12/31/92 1.275883979 1992 0.000% 1.271866499
8/31/93 1.45313453 1993 0.067% 1.447706775
12/31/93 1.458664848 1993 0.000% 1.453216436
8/31/94 1.399319151 1994 0.067% 1.393118753
12/31/94 1.37124777 1994 0.000% 1.365171756
8/31/95 1.563622106 1995 0.067% 1.555779014
12/31/95 1.635848825 1995 0.000% 1.627643447
8/31/96 1.613311856 1996 0.067% 1.604129001
12/31/96 1.71471468 1996 0.000% 1.704954648
8/31/97 1.815098253 1997 0.067% 1.803624524
12/31/97 1.885877079 1997 0.067% 1.87274751
Account Value $1,098 $1,472 $1,873
Surrender Value $1,098 $1,472 $1,873
Returns 9.84% 8.04% 6.37% 11/4/87

Van Kampen American Capital Emerging 7/3/95 1 1995 0.000% 1
Growth 8/31/95 1.0970281 1995 0.067% 1.0963581
12/31/95 1.161230329 1995 0.000% 1.160521118
8/31/96 1.274244359 1996 0.067% 1.272688576
12/31/96 1.331143382 1996 0.000% 1.329518129
8/31/97 1.557018284 1997 0.067% 1.554226473
12/31/97 1.575598663 1997 0.067% 1.571732205
Account Value $1,182 $1,572
Surrender Value $1,182 $1,572
Returns 18.22% 19.84% 7/3/95

Van Kampen American Capital Enterprise 8/31/87 1.203170656 1987 0.067% 1
Portfolio 8/31/88 0.837595224 1988 0.067% 0.695486625
12/31/88 0.898307476 1988 0.000% 0.745898278
8/31/89 1.154698313 1989 0.067% 0.958289422
12/31/89 1.185337352 1989 0.000% 0.983716901
8/31/90 1.056483922 1990 0.067% 0.876121759
12/31/90 1.084958015 1990 0.000% 0.899734775
8/31/91 1.313391092 1991 0.067% 1.088567102
12/31/91 1.454780751 1991 0.000% 1.205753927
8/31/92 1.402207169 1992 0.067% 1.161371943
12/31/92 1.53647085 1992 0.000% 1.272575249
8/31/93 1.601649066 1993 0.067% 1.325706195
12/31/93 1.645531971 1993 0.000% 1.362028659
8/31/94 1.656961997 1994 0.067% 1.370576883
12/31/94 1.562210068 1994 0.000% 1.292201638
8/31/95 1.942391251 1995 0.067% 1.605807493
12/31/95 2.103793381 1995 0.000% 1.739241347
8/31/96 2.293217431 1996 0.067% 1.894676101
12/31/96 2.580242494 1996 0.000% 2.131818693
8/31/97 3.200207143 1997 0.067% 2.642610536
12/31/97 3.314011516 1997 0.067% 2.734815353
Account Value $1,283 $2,149 $2,735
Surrender Value $1,283 $2,149 $2,735
Returns 28.29% 16.52% 10.22% 8/31/87
</TABLE>

5
<PAGE> 7

Travelers Premier Advisers Asset Manager Nonstandardized Performance (Minus Fees
and Deferred Sales Charge)

<TABLE>
<CAPTION>
Cummulative
Performance
Admin plus 1, minus Inception
Fund Name Date Unit Value Year Fee Amin Fee 1 Year 5 Year 10 Year Date
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Van Kampen American Capital Government 8/31/87 0.973514766 1987 0.067% 1
Portfolio 8/31/88 1.01436428 1988 0.067% 1.041290857
12/31/88 1.039503965 1988 0.000% 1.067097882
8/31/89 1.125885574 1989 0.067% 1.155057559
12/31/89 1.167893428 1989 0.000% 1.198153847
8/31/90 1.178117116 1990 0.067% 1.207839671
12/31/90 1.243030981 1990 0.000% 1.274391239
8/31/91 1.329131847 1991 0.067% 1.361810489
12/31/91 1.420037074 1991 0.000% 1.454950753
8/31/92 1.465885538 1992 0.067% 1.500951652
12/31/92 1.475420075 1992 0.000% 1.510714268
8/31/93 1.57105175 1993 0.067% 1.607621414
12/31/93 1.563982763 1993 0.000% 1.600387881
8/31/94 1.489253771 1994 0.067% 1.522847148
12/31/94 1.465637609 1994 0.000% 1.498698272
8/31/95 1.610992502 1995 0.067% 1.646327835
12/31/95 1.687869672 1995 0.000% 1.72489122
8/31/96 1.630126274 1996 0.067% 1.664725608
12/31/96 1.693537488 1996 0.000% 1.729482721
8/31/97 1.753974327 1997 0.067% 1.790043575
12/31/97 1.824360251 1997 0.067% 1.860677607
Account Value $1,076 $1,232 $1,861
Surrender Value $1,076 $1,232 $1,861
Returns 7.59% 4.25% 6.19% 8/31/87

Van Kampen American Capital Growth 12/23/96 1 1996 0.000% 1
and Income 12/31/96 0.996616438 1996 0.000% 0.996616438
8/31/97 1.169231368 1997 0.067% 1.168563635
12/31/97 1.190825532 1997 0.067% 1.189362529
Account Value $1,193 $1,189
Surrender Value $1,193 $1,189
Returns 19.34% 18.49% 12/23/96

Van Kampen American Capital Money Market 8/31/87 1.059006936 1987 0.067% 1
Portfolio 8/31/88 1.112590745 1988 0.067% 1.049928166
12/31/88 1.136012558 1988 0.000% 1.072030833
8/31/89 1.192132478 1989 0.067% 1.124271743
12/31/89 1.218446337 1989 0.000% 1.149087717
8/31/90 1.267673869 1990 0.067% 1.194743141
12/31/90 1.291048261 1990 0.000% 1.216772778
8/31/91 1.325720613 1991 0.067% 1.248635152
12/31/91 1.339782072 1991 0.000% 1.261878992
8/31/92 1.355606914 1992 0.067% 1.275938222
12/31/92 1.360710744 1992 0.000% 1.280742101
8/31/93 1.368891334 1993 0.067% 1.287583823
12/31/93 1.372671566 1993 0.000% 1.291139522
8/31/94 1.386149192 1994 0.067% 1.30295156
12/31/94 1.399029987 1994 0.000% 1.31505924
8/31/95 1.433287601 1995 0.067% 1.346379599
12/31/95 1.449943651 1995 0.000% 1.362025702
8/31/96 1.479149508 1996 0.067% 1.388548093
12/31/96 1.494307576 1996 0.000% 1.402777693
8/31/97 1.525905171 1997 0.067% 1.431499999
12/31/97 1.542748226 1997 0.067% 1.446341898
Account Value $1,031 $1,129 $1,446
Surrender Value $1,031 $1,129 $1,446
Returns 3.11% 2.46% 3.63% 8/31/87
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