<PAGE> 1
Registration Statement No. 333-_____
811-09215
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-6
FOR REGISTRATION UNDER THE SECURITIES ACT OF 1933
OF SECURITIES OF UNIT INVESTMENT TRUSTS
REGISTERED ON FORM N-8B-2
A. Exact Name of Trust: THE TRAVELERS FUND UL III FOR VARIABLE LIFE INSURANCE
-----------------------------------------------------
B. Name of Depositor: THE TRAVELERS INSURANCE COMPANY
-------------------------------
C. Complete Address of Depositor's Principal Executive Offices:
One Tower Square,
Hartford, Connecticut 06183
D. Name and Complete Address of Agent for Service:
Ernest J. Wright, Secretary
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
It is proposed that this filing will become effective (check appropriate box):
____ immediately upon filing pursuant to paragraph (b)
____ on ___________ pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)(1)
____ 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.
E. Title of securities being registered:
Variable Life Insurance Policies.
Pursuant to Rule 24f-2 under the Investment Company Act of 1940
the Registrant hereby declares that an indefinite amount of its
Variable Life Insurance Policies is being registered under the
Securities Act of 1933.
F. Approximate date of proposed public offering:
As soon as practicable following the effectiveness of the
Registration Statement
<PAGE> 2
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 said Section 8(a),
may determine.
____ Check the box if it is proposed that this filing will become
effective on ____ at ___ pursuant to Rule 487. ______
<PAGE> 3
RECONCILIATION AND TIE BETWEEN
FORM N-8B-2 AND THE PROSPECTUS
<TABLE>
<CAPTION>
Item No. Of
Form N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
<S> <C>
1 Cover page
2 Cover page
3 Not applicable
4 The Company; Distribution
5 The Travelers Fund UL III for Variable Life Insurance
6 The Travelers Fund UL III for Variable Life Insurance
7 Not applicable
8 Not applicable
9 Legal Proceedings and Opinion
10 Prospectus Summary; The Company; The Travelers Fund UL III for
Variable Life Insurance, The Investment Options; The Policy;
Transfers of Cash Value; The Separate Account and Valuation;
Voting Rights; Disregard of Voting Rights; Dividends; Lapse
and Reinstatement
11 Prospectus Summary; The Investment Options
12 Prospectus Summary; The Investment Options
13 Charges and Deductions; Distribution
14 The Policy
15 Prospectus Summary; Applying Premium Payments
16 The Investment Options; Applying Premium Payments
17 Prospectus Summary; Right to Cancel; The Separate Account and
Valuation; Surrender, Policy Loans; Exchange
18 The Investment Options; Charges and Deductions; Federal Tax
Considerations; Dividends
19 Statements to Policy Owners
20 Not applicable
21 Policy Loans
22 Not applicable
23 Not applicable
24 Not applicable
25 The Company
26 Not applicable
27 The Company
28 The Company; Management
29 The Company
30 Not applicable
31 Not applicable
32 Not applicable
33 Not applicable
34 Not applicable
35 The Company; Distribution
36 Not applicable
37 Not applicable
38 Distribution
39 The Company; Distribution
40 Not applicable
41 The Company; Distribution
42 Not applicable
43 Not applicable
44 Applying Premium Payments; Accumulation Unit Values
45 Not applicable
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
Item No. Of
Form N-8B-2 CAPTION IN PROSPECTUS
- ----------- ---------------------
<S> <C>
46 The Separate Account and Valuation; Access to Cash Values
47 The Investment Options
48 Not applicable
49 Not applicable
50 Not applicable
51 Prospectus Summary; The Company; The Policy; Death Benefits
and Lapse and Reinstatement
52 The Investment Options
53 Federal Tax Considerations
54 Not applicable
55 Not applicable
56 Not applicable
57 Not applicable
58 Not applicable
59 Financial Statements
</TABLE>
<PAGE> 5
TRAVELERS
CORPORATE OWNED VARIABLE
UNIVERSAL LIFE INSURANCE II POLICIES
PROSPECTUS
This Prospectus describes Travelers corporate owned variable universal (flexible
premium) life insurance Policies (the "Policy") offered by The Travelers
Insurance Company (the "Company"). The policy is designed generally for use by
corporations and employers. The Policy Owner ("you") chooses the amount of life
insurance coverage desired with a minimum Stated Amount of $50,000 and a minimum
Target Premium of $100,000. You direct the net premium payment to one or more of
the variable funding options (the "Investment Options") and/or the Fixed
Account.
During the Policy's Right to Cancel Period, the Applicant may return the Policy
to the Company for a refund. The Right to Cancel Period expires on the latest of
ten days after you receive the Policy, ten days after we mail or deliver to you
a written Notice of Right to Cancel, or 45 days after the Applicant signs the
application for insurance (or later if state laws requires).
The Policy has no guaranteed minimum Contract Value. The Contract Value of the
Policy will vary to reflect the investment performance of the Investment Options
to which you have directed your premium payments. You bear the investment risk
under this Policy. The Contract Value is reduced by the various fees and charges
assessed under the Policy, as described in this Prospectus. The Policy will
remain in effect for as long as the Cash Surrender Value can pay the monthly
Policy charges (subject to the Grace Period provision).
We offer three death benefits under the Policy -- the "Level Option," the
"Variable Option," and the "Annual Increase Option." Under any option, the death
benefit will never be less than the Amount Insured (less any outstanding Policy
loans or Monthly Deduction Amounts due and unpaid). You choose one at the time
you apply for the Policy; however you may change the death benefit option,
subject to certain conditions.
This Policy may be or become a modified endowment Policy under federal tax law.
If so, any partial withdrawal, Policy surrender or loan may result in adverse
tax consequences or penalties.
REPLACING EXISTING INSURANCE WITH THIS POLICY MAY NOT BE TO YOUR ADVANTAGE.
EACH OF THE INVESTMENT OPTION PROSPECTUSES ARE INCLUDED WITH THE PACKAGE
CONTAINING THIS PROSPECTUS. ALL PROSPECTUSES SHOULD BE READ AND RETAINED FOR
FUTURE REFERENCE.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAVE APPROVED OR DISAPPROVED THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS COMPLETE OR TRUTHFUL. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
VARIABLE LIFE INSURANCE POLICIES 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.
THE DATE OF THIS PROSPECTUS IS MARCH 1, 2000.
<PAGE> 6
TABLE OF CONTENTS
<TABLE>
<S> <C>
Glossary of Special Terms............. 3
Prospectus Summary.................... 5
General Description................... 10
Group or Individual Policy.......... 10
The Application..................... 10
How the Policy Works.................. 10
Applying Premium Payments........... 11
The Investment Options.............. 11
The Fixed Account................... 17
Policy Benefits and Rights.......... 17
Transfers of Contract Value......... 17
Investment Options............... 17
Fixed Account.................... 18
Telephone Transfers.............. 18
Automated Transfers................. 18
Dollar Cost Averaging............ 18
Portfolio Rebalancing............ 18
Lapse and Reinstatement............. 18
Insured Term Rider.................. 19
Exchange Rights..................... 19
Right to Cancel..................... 19
Access to Contract Values............. 19
Policy Loans........................ 19
Consequences..................... 19
Policy Surrenders................... 20
Full Surrenders.................. 20
Partial Withdrawals.............. 20
Death Benefit......................... 21
Option 1............................ 22
Option 2............................ 22
Option 3............................ 22
Payment of Proceeds................. 23
Payment Options..................... 23
Maturity Benefits..................... 23
Charges and Deductions................ 24
Charges Against Premium............. 24
Front-End Sales Expense
Charges........................ 24
Monthly Deduction Amount............ 24
Cost of Insurance Charge......... 24
Monthly Policy Charge............ 24
Charges Against the Separate
Account.......................... 24
Mortality and Expense Risk
Charge......................... 24
Underlying Fund Expenses............ 24
Transfer Charge..................... 25
Reduction or Elimination of
Charges.......................... 25
The Separate Account and Valuation.... 25
The Travelers Fund UL III for
Variable Life Insurance (Fund UL
III)............................. 25
How the Contract Value Varies.... 25
Accumulation Unit Value.......... 26
Net Investment Factor............ 26
Changes to the Policy................. 26
General............................. 26
Changes in Stated Amount............ 27
Changes in Death Benefit Option..... 27
Additional Policy Provisions.......... 27
Assignment.......................... 27
Limit on Right to Contest and
Suicide Exclusion................ 27
Misstatement as to Sex and Age...... 28
Voting Rights....................... 28
Disregard of Voting Instructions.... 28
Other Matters......................... 28
Statements to Policy Owners......... 28
Suspension of Valuation............. 29
Dividends........................... 29
Mixed and Shared Funding............ 29
Distribution........................ 29
Legal Proceedings and Opinion....... 30
Independent Accountants............. 30
Federal Tax Considerations............ 30
General............................. 30
Tax Status of the Policy............ 30
Definition of Life Insurance..... 30
Diversification.................. 30
Investor Control................. 31
Tax Treatment of Policy Benefits.... 31
In General....................... 31
Modified Endowment Contracts..... 32
Exchanges........................ 33
Aggregation of Modified Endowment
Contracts...................... 33
Policies Which Are Not Modified
Endowment Contracts............ 33
Treatment of Loan Interest....... 33
The Company's Income Taxes....... 33
The Company........................... 34
IMSA................................ 34
Year 2000 Compliance................ 34
Management.......................... 35
Directors of The Travelers
Insurance Company.............. 35
Senior Officers of The Travelers
Insurance Company.............. 36
Example of Policy Charges............. 37
Illustrations......................... 37
Appendix A (Performance
Information)........................ A-1
Appendix B (Target Premiums).......... B-1
Appendix C (Cash Value Accumulation
Test Factors)....................... C-1
Financial Statements.................. F-1
</TABLE>
2
<PAGE> 7
GLOSSARY OF SPECIAL TERMS
- --------------------------------------------------------------------------------
ACCUMULATION UNIT -- a standard of measurement used to calculate the values
allocated to the Investment Options.
BENEFICIARY(IES) -- the person(s) named to receive the benefits of this Policy
at the Insured's death.
CASH SURRENDER VALUE -- the Contract Value less any outstanding Policy loans.
CONTRACT VALUE -- the current value of Accumulation Units credited to each of
the Investment Options available under the Policy, plus the value of the Fixed
Account and the value of the Loan Account.
COMPANY'S HOME OFFICE -- the principal executive offices of The Travelers
Insurance Company located at One Tower Square, Hartford, Connecticut 06183.
DEATH BENEFIT -- the amount payable to the Beneficiary if the Insured dies while
the policy is in force.
DEDUCTION DATE -- the day in each Policy Month on which the Monthly Deduction
Amount is deducted from the Policy's Contract Value.
FIXED ACCOUNT -- part of the General Account of the Company.
GENERAL ACCOUNT -- made up of all our assets other than those held in the
Separate Account.
INSURED -- the person on whose life the Policy is issued and who is named on
Schedule A of the Application.
INVESTMENT OPTIONS -- the segments of the Separate Account to which you may
allocate premiums or Contract Value. Each investment option invests directly in
a corresponding Underlying Fund.
ISSUE DATE -- the date on which the Policy is issued by the Company for delivery
to the Policy Owner.
LOAN ACCOUNT -- an account in the Company's general account to which we transfer
the amount of any Policy loan, and to which we credit a fixed rate of interest.
MATURITY DATE -- The anniversary of the Policy Date on which the Insured is age
100.
MINIMUM AMOUNT INSURED -- the amount of Death Benefit required to qualify this
Policy as life insurance under federal tax law.
MONTHLY DEDUCTION AMOUNT -- the amount of charges deducted from the Policy's
Contract Value which includes cost of insurance charges, administrative charges,
and any charges for benefits associated with any rider(s).
NET AMOUNT AT RISK -- the Amount Insured for the month divided by 1.0032734
minus the Contract Value.
NET PREMIUM -- the amount of each premium payment, minus the deduction of any
front-end sales expense charges.
PLANNED PREMIUM -- the amount of premium which the Policy Owner chooses to pay
to the Company on a scheduled basis, and for which the Company will bill the
Policy Owner.
POLICY DATE -- the date on which the Policy, benefits and provisions of the
Policy become effective. This date will not be on the 29th, 30th, or 31st of any
month.
POLICY MONTH -- monthly periods computed from the Policy Date.
POLICY OWNER(S) (YOU, YOUR OR OWNER) -- the person(s) having rights to benefits
under the Policy during the lifetime of the Insured; the Policy Owner may or may
not be the Insured(s).
3
<PAGE> 8
POLICY YEARS -- annual periods computed from the Policy Date.
SEPARATE ACCOUNT -- assets set aside by The Travelers Insurance Company, the
investment experience of which is kept separate from that of other assets of The
Travelers Insurance Company; for example, The Travelers Fund UL III for Variable
Life Insurance.
STATED AMOUNT -- the amount originally selected by the Policy Owner used to
determine the Death Benefit, or as may be increased or decreased as described in
this Prospectus.
TARGET PREMIUM -- the level annual premium above which the sales expense charges
are reduced. Refer to Appendix B.
UNDERWRITING PERIOD - the time period from when we receive a completed
Application (see page 10) until the Issue Date.
UNDERLYING FUND -- the underlying mutual fund(s) that correspond to each
Investment Option. Each Investment Option invests directly in a Fund.
VALUATION DATE -- a day on which the Separate Account is valued. A Valuation
Date is any day on which the New York Stock Exchange is open for trading and the
Company is open for business. The value of Accumulation Units will be determined
as of the close of trading on the New York Stock Exchange.
VALUATION PERIOD -- the period between the close of business on successive
Valuation Dates.
4
<PAGE> 9
PROSPECTUS SUMMARY
- --------------------------------------------------------------------------------
WHAT IS CORPORATE OWNED VARIABLE UNIVERSAL LIFE INSURANCE?
This Flexible Premium Variable Life Insurance Policy is designed for
corporations and employees to provide insurance protection on the life of
Insured employees and to build Contract Value. In addition, under certain
circumstances, individuals may purchase a Policy. Unlike traditional, fixed-
premium life insurance, the Policy allows you, as the owner, to allocate your
premium, or transfer Contract Value to various Investment Options and a Fixed
Account. These Investment Options include equity, bond, money market and other
types of portfolios. Your Contract Value will change daily, depending on
investment return. No minimum amount is guaranteed as in a traditional life
insurance policy.
SUMMARY OF FEATURES
INVESTMENT OPTIONS: You have the ability to choose from a wide variety of
well-known Investment Options. The investment options invest directly in the
Funds. These professionally managed stock, bond and money market funds cover a
broad spectrum of investment objectives and risk tolerance. The following
Investment Options (subject to state availability) are available currently:
<TABLE>
<S> <C>
EMERGING MARKETS BALANCED
Warburg Pincus Trust Emerging Markets Portfolio Salomon Brothers Total Return Fund
MFS Total Return Portfolio
INTERNATIONAL Fidelity VIP II Asset Manager Portfolio
Lazard International Stock Portfolio Janus Balanced Portfolio
Smith Barney International Equity Portfolio
Janus Worldwide Growth Portfolio INDEX
Bankers Trust EAFE Index Fund
SMALL CAP Bankers Trust Small Cap Index Fund
Delaware Premium Small Cap Value Series Equity Index Portfolio
Dreyfus Small Cap Portfolio
Travelers Disciplined Small Cap Stock Portfolio BOND
Franklin Small Cap Investments Fund Class 2 Travelers U.S. Government Securities Portfolio
Travelers Convertible Bond Portfolio
MID CAP Travelers High Yield Bond Trust
Salomon Brothers Cap Fund Salomon Brothers Strategic Bond Fund
MFS Emerging Growth Portfolio Greenwich Street Diversified Strategic Income
MFS Mid Cap Growth Portfolio Portfolio
Strong Schaefer Value Fund II American Odyssey Intermediate-Term Bond Fund
Travelers Disciplined Mid-Cap Stock Portfolio
Aim Capital Appreciation Portfolio MONEY MARKET
Travelers Money Market Portfolio
LARGE CAP
Fidelity Large Cap Portfolio REAL ESTATE
Fidelity Equity Income Delaware Investment REIT Series
Alliance Growth Portfolio
Capital Appreciation (Janus) NON-STYLE SPECIFIC
Dreyfus Capital Appreciation Portfolio Social Awareness Stock Portfolio
Van Kampen Enterprise Portfolio MFS Research Portfolio
Salomon Brothers Investors Fund Strategic Stock Portfolio
Smith Barney Large Capitalization Growth Janus Global Technology Portfolio
Portfolio
Fidelity VIP II Contrafund Porfolio - Service
Class
</TABLE>
Additional Investment Options may be added from time to time. For more
information, see "The Investment Options." Refer to each Fund's prospectus for a
complete description of the investment objectives, restrictions and other
material information.
FIXED ACCOUNT: The Fixed Account is funded by the assets of the General
Account. The Contract Value allocated to the Fixed Account is credited with
interest daily at a rate declared by the Company. The interest rate declared is
at the Company's sole discretion, but may never be less than 3%.
5
<PAGE> 10
PREMIUMS: When applying for your Policy, you state how much you intend to pay,
and whether you will pay annually, semiannually or monthly. You may also make
unscheduled premium payments in any amount, subject to the limitations described
in this prospectus.
You indicate on your application what percentage of each Net Premium you would
like allocated to the Investment Options and/or the Fixed Account. You may not
allocate less than 5% of each Net Premium to any Investment Option and/or Fixed
Account and allocations must be in whole percentages. You may change your
allocations by writing to the Company or by calling 1-800-842-9368.
During the Underwriting Period, any premium paid will be held in a non-interest
bearing account. After the Policy Date and until the applicants' right to cancel
has expired, your Net Premium will be invested in the Money Market Portfolio
unless you purchase the Contract in a state which permits us to refund Contract
Value. Then you may invest your Net Premium in any Investment Option during the
right to cancel period. After that, the Contract Value will be distributed to
each Investment Option in the percentages indicated on your application.
RIGHT TO EXAMINE POLICY: You may return your Policy for any reason and receive
a full refund of your premium or Contract, as required by state law, by mailing
us the Policy and a written request for cancellation within a specified period.
DEATH BENEFITS: At time of application, you select a death benefit option.
Under certain conditions you may be able to change the death benefit option at a
later date. The options available are:
- LEVEL OPTION (OPTION 1): the Amount Insured will equal the greater of
the Stated Amount or the Minimum Amount Insured.
- VARIABLE OPTION (OPTION 2): the Amount Insured will equal the greater of
the Stated Amount of the Policy plus the Contract Value or the Minimum
Amount Insured.
- ANNUAL INCREASE OPTION (OPTION 3): the Amount Insured will equal the
Stated Amount of the Policy plus Premiums, minus withdrawals, accumulated
at a specified interest rate not to exceed 10% on an annual basis.
POLICY VALUES: As with other types of insurance policies, this Policy can
accumulate a Contract Value. The Contract Value of the Policy will increase or
decrease to reflect the investment experience of the Investment Options. Monthly
charges and any partial surrenders taken will also decrease the Contract Value.
There is no minimum guaranteed Contract Value allocated to the Investment
Options. As discussed below, any premium payments allocated to the Fixed Account
is credited with a minimum guarantee of 3% in any given year.
- ACCESS TO POLICY VALUES: You may borrow up to 100% of your Policy's Cash
Surrender Value. (See "Policy Loans" for loan impact on coverage and
policy values.)
You may cancel all or a portion of your Policy while the Insured is living and
receive all or a portion of the Cash Surrender Value.
TRANSFERS OF POLICY VALUES: You may transfer all or a portion of your Contract
Value among the Investment Options. There are restrictions on the transfer of
your Contract Value to and from the Fixed Account. You may do this by writing to
the Company or calling 1-800-334-4298.
You can use automated transfers to take advantage of dollar cost
averaging -- investing a fixed amount at regular intervals. For example, you
might have a set amount transferred from a relatively conservative Investment
Option to a more aggressive one, or to several others.
GRACE PERIOD: If the Cash Surrender Value of your Policy becomes less than the
amount needed to pay the Monthly Deduction Amount, you will have 61 days to pay
a premium to cover the Monthly Deduction Amount. If the premium is not paid,
your Policy will lapse.
6
<PAGE> 11
EXCHANGE RIGHTS: During the first two Policy Years, you can elect to
irrevocably transfer all Contract Value in the Investment Options to the Fixed
Account.
TAX CONSEQUENCES: Currently, the federal tax law excludes all Death Benefit
payments from the gross income of the Beneficiary. At any point in time, the
Policy may become a modified endowment contract ("MEC"). A MEC has an
income-first taxation of all loans, pledges, collateral assignments or partial
surrenders. A 10% penalty tax may be imposed on such income distributed before
the Policy Owner attains age 59 1/2. The Company has established safeguards for
monitoring whether a Policy may become a MEC.
CHARGES AND DEDUCTIONS: Your Policy is subject to charges, which compensate the
Company for administering and distributing the Policy, as well as paying Policy
benefits and assuming related risks. These charges are summarized below, and
explained in detail under "Charges and Deductions."
POLICY CHARGES:
- SALES EXPENSES CHARGES -- We Deduct a sales charge from each premium
payment received which is guaranteed never to exceed 12% of such Target
Premium in all years and 8% on amounts in excess of the Target Premium in
all years. On a current basis, the Sales Expense Charge is 10% of the
premiums received up to the Target Premium for Policy Years 1 and 2, 8%
for Policy Years 3 through 7 and 3.5% thereafter. On a current basis the
Sales Expense Charge on premium received in excess of the Target Premium
is 6% for Policy Years 1 and 2, 4% for Policy Years 3 through 7 and 3.5%
thereafter. For these purposes an increase in Specified Amount is treated
as a newly issued contract.
- MONTHLY DEDUCTION -- deductions taken from the value of your Policy each
month to cover cost of insurance charges, a current Policy Fee of $5.00
(guaranteed not to exceed $10), a charge of $.10 a month per $1,000 of
Specified Amount and charges for optional rider(s).
- SURRENDER CHARGE -- There is no surrender charge.
ASSET-BASED CHARGES: (Not Assessed on Contract Values in the Fixed
Account)
- MORTALITY AND EXPENSE RISK CHARGE -- applies to the assets of the
Investment Options on a daily basis which currently equals an annual rate
of .20% for Policy Years 1 through 25, and .05% thereafter. It is
guaranteed not to exceed .75% in all years.
- UNDERLYING FUND FEES -- the Separate Account purchases shares of the
Underlying Funds on a net asset value basis. The shares purchased already
reflect the deduction of investment advisory fees and other expenses.
These Fund Fees are summarized below:
TRAVELERS CORPORATE VARIABLE LIFE
1999 FUND EXPENSES
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL
FUND NAME FEE EXPENSES EXPENSES
--------- ---------- -------- --------
<S> <C> <C> <C>
Capital Appreciation Fund.................................. 0.75% 0.10% 0.85%
Travelers High Yield Bond Trust............................ 0.50% 0.32% 0.82%
Money Market Portfolio(1).................................. 0.32% 0.08% 0.40%
AMERICAN ODYSSEY FUNDS, INC.
American Odyssey Intermediate Term Bond Portfolio.......... 0.49% 0.11% 0.60%
BT INSURANCE FUNDS TRUST:
Bankers Trust EAFE Index Fund(2)........................... 0.11% 0.54% 0.65%
Bankers Trust Small Cap Index Fund(2)...................... 0.05% 0.40% 0.45%
DELAWARE GROUP PREMIUM FUND, INC.
Delaware Investments REIT Series(3)........................ 0.58% 0.27% 0.85%
Delaware Premium Small Cap Value Series.................... 0.75% 0.10% 0.85%
</TABLE>
7
<PAGE> 12
<TABLE>
<CAPTION>
MANAGEMENT OTHER TOTAL
FUND NAME FEE EXPENSES EXPENSES
--------- ---------- -------- --------
<S> <C> <C> <C>
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus Capital Appreciation Portfolio..................... 0.75% 0.06% 0.81%
Dreyfus Small Cap Portfolio................................ 0.75% 0.02% 0.77%
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II
VIP II Asset Manager Portfolio(4).......................... 0.54% 0.09% 0.63%
VIP II Contrafund Portfolio-Service Class.................. 0.59% 0.36% 0.95%
JANUS ASPEN SERIES
Janus Worldwide Growth Portfolio........................... 0.66% 0.30% 0.96%
Janus Balanced Portfolio................................... 0.67% 0.26% 0.93%
Janus Global Technology Portfolio.......................... 0.75% 0.55% 1.30%
GREENWICH STREET SERIES
Equity Index Portfolio(5).................................. 0.21% 0.09% 0.30%
Diversified Strategic Income Portfolio(6).................. 0.65% 0.13% 0.78%
SALOMON BROTHERS VARIABLE SERIES FUND, INC
Salomon Brothers Variable Capital Fund(8).................. 0.85% 0.15% 1.00%
Salomon Brothers Variable Investors Fund(8)................ 0.70% 0.30% 1.00%
Salomon Brothers Variable Strategic Bond Fund(8)........... 0.75% 0.25% 1.00%
Salomon Brothers Variable Total Return Fund(8)............. 0.80% 0.20% 1.00%
STRONG VARIABLE INSURANCE FUNDS, INC
Strong Schaefer Value Fund II(9)........................... 1.00% 0.20% 1.20%
TEMPLETON VARIABLE PRODUCTS SERIES FUND
Franklin Small Cap Investments Fund, Class II.............. 0.15% 1.10% 1.25%
TRAVELERS SERIES FUND, INC
AIM Capital Appreciation Portfolio(10)..................... 0.80% 0.05% 0.85%
Alliance Growth Portfolio(10).............................. 0.80% 0.02% 0.82%
MFS Total Return Portfolio(10)............................. 0.80% 0.04% 0.84%
Smith Barney International Equity Portfolio(10)............ 0.90% 0.10% 1.00%
Smith Barney Large Capitalization Growth Portfolio(11)..... 0.75% 0.25% 1.00%
Van Kampen Enterprise Portfolio(10)........................ 0.70% 0.03% 0.73%
TRAVELERS SERIES TRUST
Convertible Bond Portfolio(12)............................. 0.60% 0.20% 0.80%
Disciplined Mid Cap Portfolio(13).......................... 0.70% 0.25% 0.95%
Disciplined Small Cap Stock Portfolio(12).................. 0.80% 0.20% 1.00%
Equity-Income Portfolio(13)................................ 0.75% 0.20% 0.95%
Large Cap Portfolio(13).................................... 0.75% 0.20% 0.95%
Lazard International Stock Portfolio....................... 0.83% 0.42% 1.25%
MFS Emerging Growth Portfolio.............................. 0.75% 0.14% 0.89%
MFS Mid Cap Growth Portfolio(12)........................... 0.80% 0.20% 1.00%
MFS Research Portfolio(12)................................. 0.80% 0.20% 1.00%
Social Awareness Stock Portfolio........................... 0.65% 0.19% 0.84%
Strategic Stock Portfolio(12).............................. 0.60% 0.30% 0.90%
U.S. Government Securities Portfolio....................... 0.32% 0.13% 0.45%
WARBURG PINCUS TRUST
Warburg Pincus Trust Emerging Markets Portfolio(15)........ 0.20% 1.20% 1.40%
</TABLE>
- ---------------
(1) Other Expenses have been restated to reflect the current expense
reimbursement arrangement with The Travelers Insurance Company. Travelers
has agreed to reimburse the Fund for the amount by which its aggregate
expenses (including the management fee, but excluding brokerage
commissions, interest charges and taxes) exceeds 0.40%. Without such
arrangement, Total Expenses would have been 0.65% for the Travelers Money
Market Portfolio.
(2) These fees reflect an expense reimbursement arrangement whereby the adviser
has agreed to reimburse the funds an amount based on the weighted average
between the management fee and other expenses. Without such arrangement,
the Management Fee and Other Expenses for the Bankers Trust EAFE Index
Portfolio and Small Cap Index Portfolio would have been 0.45% and 1.21%,
and 0.35% and 1.23% respectively.
8
<PAGE> 13
(3) The adviser for the Delaware REIT Series has agreed to voluntarily waive
its fee and pay the expenses of the Series to the extent that the Series'
annual operating expenses, exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, do not exceed 0.85% of its average
daily net assets through October 31, 1999. Without such arrangements, the
Total Annual Operating Expenses for the Portfolio would have been 1.02%.
(4) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, certain funds, or FMR on behalf of
certain funds, have entered into arrangements with their custodian whereby
credits realized, as a result of uninvested cash balances were used to
reduce custodian expenses. Without these reductions, the Total Annual
Operating Expenses presented in this table would have been 0.64% for VIP II
Asset Manager Portfolio, 0.58% for VIP Equity Income Portfolio, and 0.68%
for VIP Growth Portfolio.
(5) Other expenses for the Equity Index Portfolio have been restated to reflect
the current expense reimbursement arrangement whereby the adviser has
agreed to reimburse the Portfolio for the amount by which expenses exceed
0.30%. Without such arrangement, Total Annual Operating Expenses would have
been 0.42%. In addition, the Portfolio Management Fee includes 0.06% for
fund administration. Class 2 of this fund has a distribution plan or "Rule
12b-1 plan".
(6) The Portfolio Management Fee for the Smith Barney Appreciation Portfolio
and the Diversified Strategic Income Portfolio includes 0.20% for fund
administration.
(8) SBAM has waived all of its Management Fees for the following Salomon
Brothers Funds for the period ended December 31, 1998. If such fees were
not waived or expenses reimbursed, the actual annualized Total Annual
Operating Expenses for the Investors Fund, the High Yield Bond Fund, the
Capital Fund, the Strategic Bond Fund, and the Total Return Fund would have
been 2.07%, 2.04%, 3.26%, 1.79%, and 2.90%, respectively.
(9) The Adviser for Strong Schafer Value Fund II has voluntarily agreed to cap
the Fund's Total Annual Operating Expenses at 1.20%. The adviser has no
current intention to, but may in the future, discontinue or modify any
waiver of fees or absorption of expenses at its discretion without further
notification. Absent the waiver of fees, the Total Annual Operating
Expenses would be 2.00%.
(10) Expenses are as of October 31, 1998 (the Fund's fiscal year end). There
were no fees waived or expenses reimbursed for these funds in 1998.
(11) The Manager waived all or part of its fees for the period ended October 31,
1998. If such fees were not waived, the annualized Total Annual Operating
Expenses for the Smith Barney Large Capitalization Growth Portfolio would
have been 1.77%.
(12) Travelers Insurance has agreed to reimburse the Convertible Bond Portfolio,
the Strategic Stock Portfolio, the Disciplined Small Cap Stock Portfolio,
the MFS Mid Cap Growth Portfolio, and the MFS Research Portfolio for
expenses for the period ended December 31, 1998. If such expenses were not
reimbursed, the actual annualized Total Annual Operating Expenses would
have been 1.86%, 1.51%, 2.98%, 1.62%, and 1.37% respectively.
(13) Other Expenses reflect the current expense reimbursement arrangement with
Travelers where Travelers has agreed to reimburse the Portfolios for the
amount by which their aggregate expenses (including management fees, but
excluding brokerage commissions, interest charges and taxes) exceeds 0.95%.
Without such arrangements, the Total Annual Operating Expenses for the
Portfolios would have been 1.22% for the Travelers Disciplined Mid Cap
Stock Portfolio, 1.23% for the Large Cap Portfolio, and 1.09% for the
Equity Income Portfolio.
(15) Fee waivers and expense reimbursements or credits reduced expenses for the
Warburg Pincus Emerging Markets Portfolio during 1998, but this may be
discontinued at any time. Absent this waiver of fees, the Portfolio's
Management Fees, Other Expenses and Total Annual Operating Expenses would
equal 1.25%, 6.96% and 8.21%, respectively. The Portfolio's other expenses
are based on annualized estimates of expenses for the fiscal year ending
December 31, 1998, net of any fee waivers or expense reimbursements.
9
<PAGE> 14
GENERAL DESCRIPTION
- --------------------------------------------------------------------------------
This prospectus describes a flexible premium variable life insurance policy
offered by The Travelers Insurance Company to corporations and employers and
individuals under certain circumstances. It provides life insurance protection
on the life (of an Insured), and pays policy proceeds when the Insured dies
while the policy is in effect. The policy offers:
- Flexible premium payments (you select the timing and amount of the
premium)
- A selection of investment options
- A choice of three death benefit options
- Loans and partial withdrawal privileges
- The ability to increase or decrease the Policy's face amount of insurance
- Additional benefits through the use of an optional rider
This Policy is both an insurance product and a security. The Policy is first and
foremost a life insurance Policy with death benefits, Contract Values and other
features traditionally associated with life insurance. The Policy is a security
because the Contract Value and, under certain circumstances, the Amount Insured,
and Death Benefit may increase or decrease depending on the investment
experience of the Investment Options chosen.
GROUP OR INDIVIDUAL POLICY. The policy may be issued either as an individual or
group policy. Under an individual or group policy, the Insured generally will be
an employee. The Certificate, and Group Policy, and Individual Policies are
hereafter collectively referred to as the "Policy."
THE APPLICATION. In order to become a policy owner, you must submit an
application with information about the proposed insured. The insured must sign a
life insurance consent form and provide evidence of insurability, as required.
On the application, you will also indicate:
- the amount of insurance desired (the "stated amount"); minimum of $50,000
- your choice of the three death benefit options
- the beneficiary(ies), and whether or not the beneficiary is irrevocable
- your choice of investment options.
Our underwriting staff will review the completed application, and, if approved,
we will issue the Policy.
HOW THE POLICY WORKS
- --------------------------------------------------------------------------------
You make premium payments and direct them to one or more of the available
investment options and the Fixed Account. The Policy's Contract Value will
increase or decrease depending on the performance of the investment options you
select. In the case of Death Benefit Option 2, the Death Benefit will also vary
based on the Investment Options' performance.
If your Policy is in effect when the Insured dies, we will pay your beneficiary
the Death Benefit plus any additional rider Death Benefit. Your Policy will stay
in effect as long as the Policy's Cash Surrender Value can pay the Policy's
monthly charges.
Your Policy becomes effective once our underwriting staff has approved the
application and once the first premium payment has been made. The Policy Date is
the date we use to determine all future transactions on the policy, for example,
the deduction dates, policy months, policy years. The Policy Date may be before
or the same date as the Issue Date (the date the policy was
10
<PAGE> 15
issued). During the underwriting period, any premium paid will be held in a
non-interest bearing account.
APPLYING PREMIUM PAYMENTS
We apply the first premium on the later of the Issue Date or the date we receive
it at our Home Office. During the Right to Cancel Period, we allocate net
premiums to the Money Market Portfolio unless state law permits us to refund
Contract Value under the Right to Cancel provision. Then, you may invest your
Net Premium in any Investment Option. At the end of the Right to Cancel Period,
we direct the net premiums to the Investment Option(s) and/or the Fixed Account
selected on the application, unless you give us other directions.
Any premium allocation must be at least 5% and must be in whole percentages. You
may make additional payments at any time while your Policy is in force. We
reserve the right to require evidence of insurability before accepting
additional premium payments which result in an increased Net Amount at Risk. We
will return any additional premium payments which would exceed the limits
prescribed by federal income tax laws or regulations which would prevent the
Policy from qualifying as life insurance.
The investment options are segments of the separate account. They correspond to
underlying funds with the same names. The available investment options are
listed below.
We credit your policy with accumulation units of the investment option(s) you
have selected. We calculate the number of accumulation units by dividing your
net premium payment by each investment option's accumulation unit value computed
after we receive your payment.
THE INVESTMENT OPTIONS
- --------------------------------------------------------------------------------
The Investment Options currently available under Fund UL III are listed below.
There is no assurance that an Investment Option will achieve its stated
objectives. We may, add, withdraw or substitute Investment Options from time to
time. Any changes will comply with applicable state and federal laws. We would
notify you before making such a change. For more detailed information on the
investment advisers and their services and fees, please refer to the Investment
Options prospectuses which are included with and must accompany this prospectus.
Please read carefully the complete risk disclosure in each Portfolio's
prospectus before investing.
<TABLE>
<CAPTION>
INVESTMENT OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
----------------- -------------------- -----------------------------
<S> <C> <C>
Capital Appreciation Fund Seeks growth of capital through the Travelers Asset Management
use of common stocks. Income is not an International Corporation
objective. The Fund invests ("TAMIC")
principally in common stocks of small Subadviser: Janus Capital
to large companies which are expected Corp.
to experience wide fluctuations in
price in both rising and declining
markets.
High Yield Bond Trust Seeks generous income. The assets of TAMIC
the High Yield Bond Trust will be
invested in bonds which, as a class,
sell at discounts from par value and
are typically high risk securities.
Money Market Portfolio Seeks high current income from short- TAMIC
term money market instruments while
preserving capital and maintaining a
high degree of liquidity.
</TABLE>
11
<PAGE> 16
<TABLE>
<CAPTION>
INVESTMENT OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
----------------- -------------------- -----------------------------
<S> <C> <C>
AMERICAN ODYSSEY FUNDS, INC.
Intermediate-Term Bond Seeks maximum long-term total return American Odyssey Funds
Fund by investing primarily in Management, Inc.
intermediate-term corporate debt Subadviser: TAMIC
securities, U.S. government
securities, mortgage-related
securities and asset-backed
securities, as well as money market
instruments.
BT INSURANCE FUNDS TRUST
EAFE Equity Index Fund Seeks to replicate, before deduction Bankers Trust Global
of expenses, the total return Investment Management
performance of the EAFE index.
Small Cap Index Fund Seeks to replicate, before deduction Bankers Trust Global
of expenses, the total return Investment Management
performance of the Russell 2000 index.
DELAWARE GROUP PREMIUM
FUND, INC.
REIT Series Seeks to achieve maximum long-term Delaware Management Company,
total return. Capital appreciation is Inc.
a secondary objective. The Series Subadviser: Lincoln
seeks to achieve its objectives by Investment Management, Inc.
investing in securities of companies
primarily engaged in the real estate
industry. Under normal circumstances,
at least 65% of the Series total
assets will be invested in equity
securities of real estate investment
trusts ("REITs"). The Series operates
as a nondiversified fund as defined by
the Investment Company Act of 1940.
Small Cap Value Series Seeks capital appreciation by Delaware Management Company,
investing in small-to mid-cap common Inc.
stocks whose market value appears low
relative to their underlying value or
future earnings and growth potential.
Emphasis will also be placed on
securities of companies that may be
temporarily out of favor or whose
value is not yet recognized by the
market.
FIDELITY'S VARIABLE INSURANCE
PRODUCTS FUND II
VIP II Asset Manager Seeks high total return with reduced Fidelity Management &
Portfolio risk over the long-term by allocating Research Company ("FMR")
its assets among stocks, bonds and
short-term fixed-income instruments.
VIP II Contrafund Seeks long-term capital appreciation FMR
Portfolio - Service Class by investing primarily in common
stocks of companies whose value the
advisor believes is not fully
recognized by the public.
</TABLE>
12
<PAGE> 17
<TABLE>
<CAPTION>
INVESTMENT OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
----------------- -------------------- -----------------------------
<S> <C> <C>
GREENWICH STREET SERIES
FUND
Diversified Strategic Seeks high current income by investing SSB Citi Fund Management LLC.
Income Portfolio primarily in the following fixed ("SSB Citi")
income securities: U.S. Gov't and Subadviser: Smith Barney
mortgage-related securities, foreign Global Capital Management,
gov't bonds and corporate bonds rated Inc.
below investment grade.
Equity Index Portfolio Seeks to replicate, before deduction Travelers Investment
of expenses, the total return Management Company ("TIMCO")
performance of the S&P 500 Index.
JANUS ASPEN SERIES
SERVICE SHARES
Worldwide Growth Seeks long-term growth of capital in a Janus Capital Corporation
Portfolio manner consistent with the (Janus)
preservation of capital. It pursues
its objective by investing primarily
in common stocks of companies of any
size throughout the world. The
Portfolio normally invests in issuers
from at least five different
countries, including the United
States. The Portfolio may at times
invest in fewer than five countries or
even a single country.
Balanced Portfolio Seeks current income and long-term Janus
growth of capital, consistent with
preservation of capital and balanced
by current income. It pursues its
objective by normally investing 40-60%
of its assets in securities selected
primarily for their growth potential
and 40-60% of its assets in securities
selected primarily for their income
potential. This Portfolio normally
invests at least 25% of its assets in
fixed-income securities.
Global Technology Seeks long-term growth of capital. It Janus
Portfolio pursues its objective by investing
primarily in equity securities of US
and foreign companies selected for
their growth potential. Normally, it
invests at least 65% of its total
assets in securities of companies that
the portfolio manager believes will
benefit significantly from advances or
improvements in technology.
SALOMON BROTHERS VARIABLE
SERIES FUND, INC.
Salomon Brothers Variable Seeks long-term growth of capital. Salomon Brothers Asset
Investors Fund Current income is a secondary Management ("SBAM")
objective.
Salomon Brothers Variable Seeks above-average income (compared SBAM
Total Return Fund to a portfolio invested entirely in
equity securities). Secondarily, seeks
opportunities for growth of capital
and income.
</TABLE>
13
<PAGE> 18
<TABLE>
<CAPTION>
INVESTMENT OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
----------------- -------------------- -----------------------------
<S> <C> <C>
SALOMON BROTHERS VARIABLE
SERIES FUND, INC. (CONT'D)
Salomon Brothers Variable Seeks high level of current income. As SBAM
Strategic Bond Fund a secondary objective, the Portfolio
will seek capital appreciation.
Salomon Brothers Variable Seeks capital appreciation through SBAM
Capital Fund investments primarily in common stock,
or securities convertible to common
stocks, which are believed to have
above-average price appreciation
potential and which may also involve
above-average risk.
STRONG VARIABLE INSURANCE
FUNDS, INC.
Strong Schafer Value Fund Seeks primarily long-term capital Strong Capital Management,
II appreciation. Current income is a Inc.
secondary objective when selecting Subadviser: Schafer Capital
investments. Management Inc.
TEMPLETON VARIABLE
PRODUCTS SERIES FUND
Franklin Small Cap Seeks long-term capital growth, the Franklin Advisers, Inc.
Investments Fund (class Fund seeks to accomplish its objective
II) by investing primarily (normally at
least 65% of its assets) in equity
securities of smaller capitalization
growth companies.
TRAVELERS SERIES FUND, INC.
AIM Capital Appreciation Seeks capital appreciation by Travelers Investment Advisers
Portfolio investing principally in common stock, ("TIA")
with emphasis on medium-sized and Subadviser: AIM Capital
smaller emerging growth companies. Management, Inc.
Alliance Growth Portfolio Seeks long-term growth of capital by TIA
investing predominantly in equity Subadviser: Alliance Capital
securities of companies with a Management L.P.
favorable outlook for earnings and
whose rate of growth is expected to
exceed that of the U.S. economy over
time. Current income is only an
incidental consideration.
MFS Total Return Seeks to obtain above-average income TIA
Portfolio (compared to a portfolio entirely Subadviser: Massachusetts
invested in equity securities) Finance Services Company
consistent with the prudent employment ("MFS")
of capital. Generally, at least 40% of
the Portfolio's assets will be
invested in equity securities.
Smith Barney Total return on assets from growth of SSB Citi
International Equity capital and income by investing at
Portfolio least 65% of its assets in a
diversified portfolio of equity
securities of established non-U.S.
issuers.
Smith Barney Large Seeks long-term growth of capital by SSB Citi
Capitalization Growth investing in equity securities of
Portfolio companies with large market
capitalizations.
</TABLE>
14
<PAGE> 19
<TABLE>
<CAPTION>
INVESTMENT OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
----------------- -------------------- -----------------------------
<S> <C> <C>
TRAVELERS SERIES FUND, INC. (CONT'D)
Van Kampen Enterprise Capital appreciation through SSB Citi
Portfolio investment in securities believed to Subadviser: Van Kampen Asset
have above-average potential for Management, Inc.
capital appreciation. Any income
received on such securities is
incidental to the objective of capital
appreciation.
TRAVELERS SERIES TRUST
Convertible Bond Seeks current income and capital TAMIC
Portfolio appreciation by investing in
convertible securities and in
combinations of nonconvertible
fixed-income securities and warrants
or call options that together resemble
convertible securities ("synthetic
convertible securities").
Disciplined Mid Cap Stock Seeks growth of capital by investing TAMIC
Portfolio primarily in a broadly diversified Subadviser: TIMCO
portfolio of common stocks.
Disciplined Small Cap Seeks long term capital appreciation TAMIC
Stock Portfolio by investing primarily (at least 65% Subadviser: TIMCO
of its total assets) in the common
stocks of U.S. Companies with
relatively small market
capitalizations at the time of
investment.
Equity Income Portfolio Seeks reasonable income by investing TAMIC
at least 65% in income-producing Subadviser: FMR
equity securities. The balance may be
invested in all types of domestic and
foreign securities, including bonds.
The Portfolio seeks to achieve a yield
that exceeds that of the securities
comprising the S&P 500. The Subadviser
also considers the potential for
capital appreciation.
Large Cap Portfolio Seeks long-term growth of capital by TAMIC
investing primarily in equity Subadviser: FMR
securities of companies with large
market capitalizations.
Lazard International Seeks capital appreciation by TAMIC
Stock Portfolio investing primarily in the equity Subadviser: Lazard Asset
securities of non-United States Management
companies (i.e., incorporated or
organized outside the United States).
MFS Emerging Growth Seeks long-term growth of capital. TAMIC
Portfolio Dividend and interest income from Subadviser: MFS
portfolio securities, if any, is
incidental.
MFS Mid Cap Growth Seeks to obtain long-term growth of TAMIC
Portfolio capital by investing under normal Subadviser: MFS
market conditions, at least 65% of its
total assets in equity securities of
companies with medium market
capitalization which the investment
adviser believes have above-average
growth potential.
</TABLE>
15
<PAGE> 20
<TABLE>
<CAPTION>
INVESTMENT OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
----------------- -------------------- -----------------------------
<S> <C> <C>
THE TRAVELERS SERIES TRUST (CONT'D)
MFS Research Portfolio Seeks to provide long-term growth of TAMIC
capital and future income. Subadviser: MFS
Social Awareness Stock Long-term capital appreciation and SSB Citi
Portfolio retention of net investment income.
The Portfolio seeks to fulfill this
objective by selecting investments,
primarily common stocks, which meet
the social criteria established for
the Portfolio. Social criteria
currently excludes companies that
derive a significant portion of their
revenues from the production of
tobacco, tobacco products, alcohol, or
military defense systems, or in the
provision of military defense related
services or gambling services.
Strategic Stock Portfolio Seeks to provide an above-average TAMIC
total return through a combination of Subadviser: TIMCO
potential capital appreciation and
dividend income by investing primarily
in high dividend yielding stocks
periodically selected from the
companies included in (i) the Dow
Jones Industrial Average and (ii) a
subset of the Standard & Poor's
Industrial Index.
U.S. Government Seeks to select investments from the TAMIC
Securities Portfolio point of view of an investor concerned
primarily with highest credit quality,
current income and total return. The
assets of the U.S. Government
Securities Portfolio will be invested
in direct obligations of the United
States, its agencies and
instrumentalities.
WARBURG PINCUS TRUST
Emerging Markets Seeks long-term growth of capital by Warburg Pincus Asset
Portfolio investing primarily in equity Management, Inc.
securities of non-U.S issuers
consisting of companies in emerging
securities markets.
DREYFUS VARIABLE
INVESTMENT FUND
Capital Appreciation Seeks primarily to provide long-term The Dreyfus Corporation
Portfolio capital growth consistent with the Subadviser: Fayez Sarofim &
preservation of capital; current Co.
income is a secondary investment
objective. The portfolio invests
primarily in the common stocks of
domestic and foreign issuers.
Small Cap Portfolio Seeks to maximize capital The Dreyfus Corporation
appreciation.
</TABLE>
16
<PAGE> 21
THE FIXED ACCOUNT
- --------------------------------------------------------------------------------
The Fixed Account is secured by part of the general assets of the Company. The
general assets of the Company include all assets of the Company other than those
held in separate account sponsored by the Company.
The staff of the Securities and Exchange Commission (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
and guarantees a specified interest rate. The investment gain or loss of the
Separate Account or any of the variable Investment Options does not affect the
Fixed Account portion of the Policy owner's Contract Value.
We guarantee that, at any time, the Fixed Account Contract Value will not be
less than the amount of the premium payments allocated to the Fixed Account,
plus interest credited, less Monthly Deduction Amount allocated to the Fixed
Account, less any prior surrenders or loans. If the Policy owner effects a
surrender, the amount available from the Fixed Account will be reduced by any
applicable charges as described under "Charges and Deductions" in this
prospectus.
Premium 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 Policies participating in the Fixed
Accounts.
Investment income from the Fixed Account allocated to us includes compensation
for mortality and expense risks borne by us in connection with Fixed Account
Policies. The amount of such investment income allocated to the Policies will
vary in our sole discretion at such rate or rates as we prospectively declare
from time to time.
We guarantee that for the life of the Policy 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.
POLICY BENEFITS AND RIGHTS
- --------------------------------------------------------------------------------
TRANSFERS OF CONTRACT VALUE
INVESTMENT OPTIONS
As long as the Policy remains in effect, you may make transfers of Contract
Value between Investment Options. We reserve the right to restrict the number of
free transfers to six times in any Policy Year and to charge $10 for each
additional transfer; however, we do not currently charge for transfers. Amounts
transferred under the Automated Transfer programs described below are not
counted for purposes of this limit on transfers.
We calculate the number of Accumulation Units involved using the Accumulation
Unit Values on the Valuation Date on which we receive the transfer request.
17
<PAGE> 22
FIXED ACCOUNT
You may make transfers from the Fixed Account to any other available investment
option(s) twice a year during the 30 days following the semi-annual or annual
anniversary of the Policy Date. The transfers are limited to an amount of up to
25% of the Fixed Account Contract Value on the semi-annual or annual 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 Investment 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.
TELEPHONE TRANSFERS. The Policy Owner may make the request in writing by
mailing such request to the Company at its Home Office, or by telephone (if an
authorization form is on file) by calling 1-800-842-9368. The Company will take
reasonable steps to ensure that telephone transfer requests are genuine. These
steps may include seeking proper authorization and identification prior to
processing telephone requests. Additionally, the Company will confirm telephone
transfers. Any failure to take such measures may result in the Company's
liability for any losses due to fraudulent telephone transfer requests.
AUTOMATED TRANSFERS
DOLLAR-COST AVERAGING. You may establish automated transfers of Contract Values
on a monthly or quarterly basis from any Investment Option(s) to any other
Investment Option(s) through written request or other method acceptable to the
Company. You must have a minimum total Policy Value of $1,000 to enroll in the
Dollar-Cost Averaging program. The minimum total automated transfer amount is
$100.
You may start or stop participation in the Dollar-Cost Averaging program at any
time, but you must give the Company at least 30 days' notice to change any
automated transfer instructions that are currently in place. Automated transfers
are subject to all of the other provisions and terms of the Policy. The Company
reserves the right to suspend or modify transfer privileges at any time and to
assess a processing fee for this service.
Before transferring any part of the Contract Value, Policy Owners should
consider the risks involved in switching between investments available under
this Policy. 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.
PORTFOLIO REBALANCING. You may elect to have the Company periodically
reallocate values in your policy to match your original (or your latest) funding
option allocation request.
LAPSE AND REINSTATEMENT
The Policy will remain in effect until the Cash Surrender Value of the Policy
can no longer cover the Monthly Deduction Amount. If this happens, we will
notify you in writing that if the amount shown in the notice is not paid within
61 days (the "Late Period"), the Policy may lapse. The amount shown will be
enough to pay the deduction amount due. The Policy will continue through the
Late Period, but if no payment is received by us, it will terminate at the end
of the Late Period. If the Insured dies during the Late Period, the Death
Benefit payable will be reduced by the Monthly Deduction Amount due plus the
amount of any outstanding loan. (See "Death Benefit," below.)
If the Policy lapses, you may reinstate the Policy by paying the reinstatement
premium (and any applicable charges) stated in the lapse notice. You may request
reinstatement within three years of lapse (unless a different period is required
under applicable state law). Upon reinstatement, the Policy's Contract Value
will equal the Net Premium. In addition, we reserve the right to require
satisfactory evidence of insurability of the Insured.
18
<PAGE> 23
INSURED TERM RIDER
You may choose to purchase the Insured Term Rider as an addition to the Policy.
This rider may not be available in all states.
EXCHANGE RIGHTS
Once the Policy is in effect, you may choose during the first 24 months to
irrevocably transfer all Contract Value of the Investment Options to the Fixed
Account. Upon election of this option, no future transfers to the Investment
Options will be permitted. All future premium payments will be allocated to the
Fixed Account. No evidence of insurability is required to exercise this Option.
RIGHT TO CANCEL
An Applicant may cancel the Policy by returning it via mail or personal delivery
to the Company or to the agent who sold the Policy. The Policy must be returned
by the latest of
(1) 10 days after delivery of the Policy to the Policy Owner,
(2) 45 days of completion of the Policy application, or
(3) 10 days after the Notice of Right to Cancel has been mailed or
delivered to the Applicant whichever is latest, or
(4) later if required by state law.
We will refund the premium payments paid, or the sum of (1) the difference
between the premium paid, including any fees or charges, and the amounts
allocated to the Investment Option(s), (2) the value of the amounts allocated to
the Investment Option(s) on the date on which the Company receives the returned
Policy, and (3) any fees and other charges imposed on amounts allocated to the
Investment Option(s), depending on state law. We will make the refund within
seven days after we receive your returned policy.
ACCESS TO CONTRACT VALUES
- --------------------------------------------------------------------------------
POLICY LOANS
You may borrow up to 100% of the Policy's Cash Surrender Value. This amount will
be determined on the day we receive the loan request in writing in a form
acceptable to us. We reserve the right to limit loan requests to at least $500.
We will make the loan within seven days of our receipt of the written loan
request. The annual loan interest rate is 5%.
If you have a loan outstanding and request a second loan, we will add the amount
of the outstanding loan to the loan request. Interest on the outstanding amount
of the loan(s), is charged daily and is payable at the end of each Policy Year.
We will transfer the amount of the loan from each Investment Option on a pro
rata basis, as of the date the loan is made. Loan amounts will be transferred
from the Fixed Account and when insufficient amounts are available in the
Investment Options. We transfer the loan amount to the Loan Account, and credit
the Loan Account with a fixed annual rate as shown in the Policy. Amounts held
in the Loan Account will not affected by the investment performance of the
Investment Options. As you repay the loan, we deduct the amount of the loan
repayment from the Loan Account and reallocate the payments among the Investment
Options and the Fixed Account according to your current instructions. You may
repay all or any part of a loan secured by the Policy while the Policy is still
in effect.
CONSEQUENCES. Your Cash Surrender Value is reduced by the amount of any
outstanding loan(s). If a loan is not repaid, it permanently decreases the Cash
Surrender Value, which could cause the
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<PAGE> 24
Policy to lapse. Additionally, the Death Benefit payable will be decreased
because of an outstanding loan. Also, even if a loan is repaid, the Death
Benefit and Cash Surrender Value may be permanently affected since you do not
receive any investment experience on the outstanding loan amount held in the
Loan Account.
POLICY SURRENDERS
You may withdraw all or a portion of the Contract Value from the Policy on any
day that the Company is open for business.
FULL SURRENDERS. As long as the Policy is in effect, you may surrender the
Policy and receive its Cash Surrender Value. (You may request a surrender
without the beneficiary's consent provided the beneficiary has not been
designated "irrevocable." If so, you will need the beneficiary's consent.) The
Cash Surrender Value will be determined as of the date we receive the written
request at our Home Office. The Cash Surrender Value is the Contract Value,
minus any outstanding Policy loans.
For full surrenders, we will pay you within seven days after we receive the
request, or on the date you specify, whichever is later. The Policy will
terminate on the deduction date following our receipt of the surrender request
(or following the date you specified, if later).
If the Policy has not been assigned at any time and a full surrender is
requested in the first seven Policy Years we will pay an additional amount at
the time of surrender as follows:
<TABLE>
<C> <S>
- ------------------------------------------------------------------------------------------
POLICY YEAR OF FULL SURRENDER ADDITIONAL PAYMENT
- ------------------------------------------------------------------------------------------
1 8% of first year premium received up to
Target Premium plus 5.5% of all other
premiums.
- ------------------------------------------------------------------------------------------
2 6% of the sum of premium received up to
Target Premium in each of the first two
Policy Years plus 5.5% of all other
premiums.
- ------------------------------------------------------------------------------------------
3 3.5% of the sum of premium received up to
Target Premium in each of the first three
Policy Years plus 3.5% of all other
premiums.
- ------------------------------------------------------------------------------------------
4 1.5% of the sum of premium received up to
Target Premium in each of the first four
Policy Years plus 1.5% of all other
premiums.
- ------------------------------------------------------------------------------------------
5 1.5% of the sum of premium received up to
Target Premium in each of the first five
Policy Years plus 1% of all other premiums.
- ------------------------------------------------------------------------------------------
6 1% of the sum of premium received up to
Target Premium in each of the first six
Policy Years.
- ------------------------------------------------------------------------------------------
7 .5% of the sum of premium received up to
Target Premium in each of the first six
Policy Years.
- ------------------------------------------------------------------------------------------
</TABLE>
PARTIAL WITHDRAWALS. You may request a partial withdrawal from the Policy at
any time after the first policy year. We reserve the right to limit partial
withdrawals to at least $500. We will deduct
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<PAGE> 25
the amount surrendered pro rata from all Investment Options, unless you give us
other written instructions.
In addition to reducing the Policy's Contract Value, partial withdrawals will
reduce the Death Benefit payable under the Policy. We will reduce the Stated
Amount by the amount necessary to prevent any increase in the Net Amount at
Risk. We may require you to return the Policy to record this reduction.
DEATH BENEFIT
- --------------------------------------------------------------------------------
The Death Benefit under the Policy is the amount paid to the Beneficiary upon
the death of the Insured. The Death Benefit will be reduced by any unpaid
Monthly Deduction Amount and outstanding Policy loans. All or part of the Death
Benefit may be paid in cash or applied to one or more of the payment options
described in the following pages.
You may elect one of these Death Benefit options. As long as the Policy remains
in effect, the Company guarantees that the Death Benefit under any option will
be at least the current Stated Amount of the Policy less any outstanding Policy
loan and unpaid Monthly Deduction Amount. The Amount Insured under any option
may vary with the Contract Value of the Policy. Under Option 1 (the "Level
Option"), the Amount Insured will be equal to the Stated Amount of the Policy
or, if greater, a specified multiple of Contract Value (the "Minimum Amount
Insured"). Under Option 2 (the "Variable Option"), the Amount Insured will be
equal to the Stated Amount of the Policy plus the Contract Value (determined as
of the date of the last Insured's death) or, if greater, the Minimum Amount
Insured. Under Option 3, (the Annual Increase Option), the Amount Insured will
be equal to stated amount of the policy plus Premium Payments minus any partial
surrenders.
The Minimum Amount Insured is the amount required to qualify the Policy as a
life insurance Policy under the current federal tax law. Under that law, the
Minimum Amount Insured equals to a stated percentage of the Policy's Contract
Value determined as of the first day of each Policy Month. The percentages
differ according to the attained age of the Insured and the definition of life
insurance under Section 7702 selected by you. (Cash Value Accumulation Test or
Guideline Premium Cash Value Corridor Test. The Minimum Amount Insured is set
forth in the Policy and may change as federal income tax laws or regulations
change. The following is a schedule of the applicable percentages for the
Guideline Premium Cash Value Corridor Test. For attained ages not shown, the
applicable percentages will decrease evenly:
<TABLE>
<CAPTION>
ATTAINED AGE OF
YOUNGER INSURED PERCENTAGE
- --------------- ----------
<S> <C>
0-40..... 250
45....... 215
50....... 185
55....... 150
60....... 130
65....... 120
70....... 115
75....... 105
95+ 100
</TABLE>
Federal tax law imposes another cash funding limitation on cash value life
insurance Policies that may increase the Minimum Amount Insured shown above.
This limitation, known as the "guideline premium limitation," generally applies
during the early years of variable universal life insurance Policies.
In the Cash Value Accumulation Test, the factors at the end of a Policy Year are
set forth in Appendix C.
21
<PAGE> 26
The following examples demonstrate the relationship between the Death Benefit,
the Cash Surrender Value and the Minimum Amount Insured under Death Benefit
Options 1. The examples assume an Insured of age 40, a Minimum Amount Insured of
250% of Contract Value (assuming the preceding table is controlling as to
Minimum Amount Insured), and no outstanding Policy loan.
OPTION 1 -- LEVEL DEATH BENEFIT
In the following examples of an Option 1 Level Death Benefit, the Death Benefit
under the Policy is generally equal to the Stated Amount of $50,000. Since the
Policy is designed to qualify as a life insurance Policy, the Death Benefit
cannot be less than the Minimum Amount Insured (or, in this example, 250% of the
Contract Value).
EXAMPLE ONE. If the Contract Value of the Policy equals $10,000, the Minimum
Amount Insured would be $25,000 ($10,000 x 250%). Since the Death Benefit in the
Policy is the greater of the Stated Amount ($50,000) or the Minimum Amount
Insured ($25,000), the Death Benefit would be $50,000.
EXAMPLE TWO. If the Contract Value of the Policy equals $40,000, the Minimum
Amount Insured would be $100,000 ($40,000 x 250%). The resulting Death Benefit
would be $100,000 since the Death Benefit is the greater of the Stated Amount
($50,000) or the Minimum Amount Insured ($100,000).
OPTION 2 -- VARIABLE DEATH BENEFIT
In the following examples of an Option 2 Variable Death Benefit, the Death
Benefit varies with the investment experience of the applicable Investment
Options and will generally be equal to the Stated Amount plus the Contract Value
of the Policy (determined on the date of the Insured's death). The Death Benefit
cannot, however, be less than the Minimum Amount Insured (or, in this example,
250% of the Contract Value).
EXAMPLE ONE. If the Contract Value of the Policy equals $10,000, the Minimum
Amount Insured would be $25,000 ($10,000 x 250%). The Death Benefit ($60,000)
would be equal to the Stated Amount ($50,000) plus the Contract Value ($10,000),
unless the Minimum Amount Insured ($25,000) was greater.
EXAMPLE TWO. If the Contract Value of the Policy equals $60,000, then the
Minimum Amount Insured would be $150,000 ($60,000 x 250%). The resulting Death
Benefit would be $150,000 because the Minimum Amount Insured ($150,000) is
greater than the Stated Amount plus the Contract Value ($50,000 + $60,000 =
$110,000).
OPTION 3 -- ANNUAL INCREASE OPTION
In the following examples of an Option 3 Annual Increase Option, the Death
Benefit is generally equal to the Stated Amount of $50,000 plus premium payments
paid minus partial surrenders, accumulated at the specified interest rates.
EXAMPLE ONE. If the Contract Value of the Policy equals $10,000, the Minimum
Amount Insured would be $25,000 ($10,000 x 250%). The Death Benefit ($52,650)
would be equal to the Stated Amount ($50,000) plus premium payments ($2,500)
aggregated at 6.00% for one year, unless the Minimum Amount Insured ($25,000)
was greater.
EXAMPLE TWO. If the Contract Value of the Policy equals $40,000, the Minimum
Amount Insured would be $100,000 ($40,000 x 250%). The Death Benefit would be
$100,000 since the Death Benefit is greater of the Stated Amount plus Premium
Payments Aggregated at 6.00% for one year ($54,000) or the Minimum Amount
Insured ($100,000).
22
<PAGE> 27
PAYMENT OF PROCEEDS
Death Benefits are payable within seven days after we receive satisfactory proof
of the Insured's death. The amount of Death Benefit paid may be adjusted to
reflect any unpaid Monthly Deduction Amount, any Policy loan, any material
misstatements in the Policy application as to age or sex of the Insured, and any
amounts payable to an assignee under a collateral assignment of the Policy. (See
"Assignment".) If no beneficiary is living when the Insured has died, the Death
Benefit will be paid to the Policy Owner, if living, otherwise, the Death
Benefit will be paid to the Policy Owner's estate.
Subject to state law, if the Insured commits suicide within two years following
the Issue Date limits on the amount of Death Benefit paid will apply. (See
"Limit on Right to Contest and Suicide Exclusion") In addition, if the Insured
dies during the 61-day period after the Company gives notice to the Policy Owner
that the Cash Surrender Value of the Policy is insufficient to meet the Monthly
Deduction Amount due against the Contract Value of the Policy, then the Death
Benefit actually paid to the Policy Owner's Beneficiary will be reduced by the
amount of the Deduction Amount that is due and unpaid. (See "Contract Value and
Cash Surrender Value," for effects of partial surrenders on Death Benefits.)
PAYMENT OPTIONS
We will pay policy proceeds in a lump sum, unless you or the Beneficiary selects
one of the Company's payment options. We may defer payment of proceeds which
exceed the Contract Value for up to six months from the date of the request for
the payment. A combination of options may be used. The minimum amount that may
be placed under a payment option is $5,000 unless we consent to a lesser amount.
Proceeds applied under an option will no longer be affected by the investment
experience of the Investment Options.
The following payment options are available under the Policy:
OPTION 1 -- Payments of a Fixed Amount
OPTION 2 -- Payments for a Fixed Period
OPTION 3 -- Amounts Held at Interest
OPTION 4 -- Monthly Life Income
OPTION 5 -- Joint and Survivor Level Amount Monthly Life Income
OPTION 6 -- Joint and Survivor Monthly Life Income-Two-thirds to Survivor
OPTION 7 -- Joint and Last Survivor Monthly Life Income-Monthly Payment
Reduces on Death of First Person Named
OPTION 8 -- Other Options
We will make any other arrangements for periodic payments as may be agreed upon.
If any periodic payment due any payee is less than $50, we may make payments
less often. If we have declared a higher rate under an option on the date the
first payment under an option is due, we will base the payments on the higher
rate.
MATURITY BENEFITS
- --------------------------------------------------------------------------------
The maturity date is the anniversary of the Policy Date on which the Insured is
age 100. If the Insured is living on the Maturity Date, the Company will pay you
the Policy's Contract Value, less any outstanding Policy loan or unpaid
Deduction Amount. You must surrender the Policy to us before we make a payment,
at which point the Policy will terminate and we will have no further obligations
under the Policy.
23
<PAGE> 28
CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------
CHARGES AGAINST PREMIUM
- FRONT-END SALES EXPENSE CHARGES. When we receive a Premium Payment, and
before allocation of the payment among the Investment Options, we deduct
a front-end sales charge. The current charge is 10% of the premiums
received up to the Target Premium for Policy Years 1 and 2, 8% for Policy
Years 3 through 7 and 3.5% thereafter. The current charge on premiums
received in excess of the Target Premium is 6% for Policy Years 1 and 2,
4% for Policy Years 3 through 7 and 3.5% thereafter. The sales charge is
guaranteed not to exceed 12% of such Target Premium payments in all
Contract Years and 10% on amounts in excess of the Target Premium. For
these purposes an increase in Specified Amount is treated as a newly
issued contract.
MONTHLY DEDUCTION AMOUNT
We will deduct a Monthly Deduction Amount to cover certain charges and expenses
incurred in connection with the Policy. The Monthly Deduction Amount is deducted
pro rata from each of the Investment Options and the Fixed Account values
attributable to the Policy. The amount is deducted on the first day of each
Policy Month (the "Deduction Date"), beginning on the Policy Date. The dollar
amount of the Deduction Amount will vary from month to month. The Monthly
Deduction Amount consists of the Cost of Insurance Charge, Monthly Policy Charge
and Charges for any Rider(s).
COST OF INSURANCE CHARGE. The amount of the Cost of Insurance deduction depends
on the amount of insurance coverage on the date of the deduction and the current
cost per dollar for insurance coverage. The cost per dollar of insurance
coverage varies annually and is based on age, sex, risk class of the Insured and
duration from issue.
MONTHLY POLICY CHARGE. This current $5 charge is used to cover expenses
associated with maintaining the policy. This charge is guaranteed not to exceed
$10.
MONTHLY PER $1,000 CHARGE. A charge of $.10 per $1,000 of the Stated Amount for
the first 20 Policy Years. For purposes of this charge an increase in Stated
Amount is considered a new policy.
CHARGES AGAINST THE SEPARATE ACCOUNT
MORTALITY AND EXPENSE RISK CHARGE. We deduct a daily charge for mortality and
expense risks. This current charge is at an annual rate of 0.20% for Policy
Years 1-25, and .05% thereafter. It is guaranteed not to exceed .75% for all
years. The mortality risk assumed is that the cost of insurance charge specified
in the Policy may not be enough to meet actual claims. The expense risk assumed
is that expenses incurred in issuing and administering the Policies will exceed
the administrative charges set forth in the Policy.
UNDERLYING FUND EXPENSES
When you allocate money to the Investment Options, the Separate Account
purchases shares of the corresponding Underlying Funds at net asset value. The
net asset value reflects investment advisory fees and other expenses already
deducted. The investment advisory fees and other expenses paid by to each of the
underlying Mutual Funds are described in the individual fund prospectuses. These
are not direct charges under the Policy; they are indirect because they affect
each Investment Option's accumulation unit value.
The Company also reserves the right to charge the assets of each Investment
Option for a reserve for any income taxes payable by the Company on the assets
attributable to that Investment Option. (See "Federal Tax Considerations.")
24
<PAGE> 29
TRANSFER CHARGE
There is currently no charge for transfers between Investment Options. We
reserve the right to limit free transfers of Contract Value to four times in any
Policy Year, and to charge $10 for any additional transfers.
REDUCTION OR ELIMINATION OF CHARGES
We may offer the Policy in arrangements where a corporation, employer or trustee
will own a group of policies on the lives of certain employees, or in other
situations where groups of policies will be purchased at one time. We may reduce
or eliminate the mortality and expense risk charge, sales charges and
administrative charges in such arrangements to reflect the reduced sales
expenses, administrative costs and/or mortality and expense risks expected as a
result of sales to a particular group.
We will not reduce or eliminate any charges if the reduction or elimination will
be unfairly discriminatory to any person.
THE SEPARATE ACCOUNT AND VALUATION
- --------------------------------------------------------------------------------
THE TRAVELERS FUND UL III FOR VARIABLE LIFE INSURANCE (FUND UL III)
The Travelers Fund III for Variable Life Insurance was established on January
15, 1999 under the insurance laws of the state of Connecticut. It is registered
with the SEC as a unit investment trust under the Investment Company Act of
1940. A Registration Statement has been filed with the SEC under the Securities
Act of 1933, as amended. This Prospectus does not contain all information set
forth in the Registration Statement, its amendments and exhibits. You may access
the SEC's website (http://www.sec.gov) to view the entire Registration
Statement. This registration does not mean that the SEC supervises the
management or the investment practices or policies of the Separate Account.
The assets of Fund are invested exclusively in shares of the Investment Options.
The operations of Fund are also subject to the provisions of Section 38a-433 of
the Connecticut General Statutes which authorizes the Connecticut Insurance
Commissioner to adopt regulations under it. Under Connecticut law, the assets of
Fund UL III will be held for the exclusive benefit of Policy Owners and the
persons entitled to payments under the Policy. The assets held in Fund UL III
are not chargeable with liabilities arising out of any other business which the
Company may conduct. Any obligations arising under the Policy are general
corporate obligations of the Company.
All investment income of and other distributions to each Investment Option are
reinvested in shares of corresponding underlying fund at net asset value. The
income and realized gains or losses on the assets of each Investment Option are
separate and are credited to or charged against the Investment Option without
regard to income, gains or losses from any other Investment Option or from any
other business of the Company. The Company purchases shares of the Fund UL III
in connection in the Investment Options in connection with premium payments
allocated to the Policy Owners' directions, and redeems Fund UL III units to
meet Policy obligations. We will also make adjustments in reserves, if required.
The Investment Options are required to redeem Fund shares at net asset value and
to make payment within seven days.
HOW THE CONTRACT VALUE VARIES. We calculate the Policy's Contract Value each
day the New York Stock Exchange is open for trading (a "valuation date") and we
are open for business. A Policy's Contract Value reflects a number of factors,
including Premium Payments, partial withdrawals, loans, Policy charges, and the
investment experience of the Investment Option(s) chosen. The Policy's Contract
Value on a valuation date equals the sum of all accumulation units for each
Investment Option chosen, plus the Loan Account Value and the Fixed Account
Value.
25
<PAGE> 30
The Separate Account purchases shares of the underlying funds at net asset value
(i.e., without a sales charge). The Separate Account receives all dividends and
capital gains distributions from each underlying fund, and reinvests in
additional shares of that fund. The Accumulation Unit Value reflects the
reinvestment of any dividends or capital gains distributions declared by the
underlying fund. The Separate Account will redeem underlying fund shares at
their net asset value, to the extent necessary to make payments under the
Policy.
In order to determine Contract Value, Cash Surrender Value, policy loans and the
number of Accumulation Units to be credited, we use the values calculated as of
the close of business on each valuation date we receive the written request, or
payment in good order, at our Home Office.
ACCUMULATION UNIT VALUE. Accumulation Units measure the value of the Investment
Options. The value for each Investment Option's Accumulation Unit is calculated
on each valuation date. The value equals the Accumulation Unit value for the
preceding valuation period multiplied by the underlying fund's Net Investment
Factor during the next Valuation Period. (For example, to calculate Monday's
valuation date price, we would multiply Friday's Accumulation Unit Value by
Monday's net investment factor.)
The Accumulation Unit Value may increase or decrease. The number of Accumulation
Units credited to your Policy will not change as a result of the Investment
Option's investment experience.
NET INVESTMENT FACTOR. For each Investment Option, the value of its
Accumulation Unit depends of the net rate of return for the corresponding
underlying fund. We determine the net rate of return at the end of each
Valuation Period (that is, the period of time beginning at the close of the New
York Stock Exchange, and ending at its close of business on the next Valuation
Date). The net rate of return reflects the investment performance of the
investment option, includes any dividends or capital gains distributed, and is
net of the Separate Account and underlying Investment Option charges.
CHANGES TO THE POLICY
- --------------------------------------------------------------------------------
GENERAL
Once the policy is issued, you may make certain changes. Some of these changes
will not require additional underwriting approval; some changes will. Certain
requests must be made in writing, as indicated below:
WRITTEN CHANGES REQUIRING UNDERWRITING APPROVAL:
- increases in the stated amount of insurance;
WRITTEN CHANGES NOT REQUIRING UNDERWRITING APPROVAL:
- decreases in the stated amount of insurance
- changing the death benefit option
- changes to the way your premiums are allocated (Note: you can also make
these changes by telephone)
- changing the beneficiary (unless irrevocably named)
Written requests for changes should be sent to the Company's Home Office at One
Tower Square, Hartford, Connecticut, 06183. The Company's telephone number is
(860) 422-3985.
26
<PAGE> 31
CHANGES IN STATED AMOUNT
After the first policy year, a Policy Owner may request in writing an increase
or decrease in the Policy's Stated Amount, provided that the Stated Amount after
any decrease may not be less than the minimum amount of $50,000. For purposes of
determining the cost of insurance charge, a decrease in the Stated Amount will
reduce the Stated Amount in the following order:
1) against the most recent increase in the Stated Amount;
2) to other increases in the reverse order in which they occurred;
3) to the initial Stated Amount.
A decrease in Stated Amount in a substantially funded Policy may cause a cash
distribution that is includable in the gross income of the Policy Owner.
For increases in the Stated Amount, we may require a new application and
evidence of insurability as well as an additional premium payment. The effective
date of any increase will be shown on the new Policy Summary which we will send.
The effective date of any increase in the Stated Amount will generally be the
Deduction Date next following either the date of a new application or, if
different, the date requested by the Applicant. There is no additional charge
for a decrease in Stated Amount.
CHANGES IN DEATH BENEFIT OPTION
After the first policy year, if the Insured is alive you may change the Death
Benefit option by sending a written request to the Company. The Stated Amount
will be adjusted so the Net Amount at risk remains level. There is no other
direct consequence of changing a Death Benefit option, except as described under
"Tax Treatment of Policy Benefits." However, the change could affect future
values of Net Amount At Risk. The cost of insurance charge which is based on the
Net Amount At Risk may be different in the future. The following Changes in
Death Benefit Options are permissible:
Option 1-2
Option 2-1
Option 3-1
It is not permitted to change from Option 3 to 2; Option 1 to 3, and 2 to 3.
ADDITIONAL POLICY PROVISIONS
- --------------------------------------------------------------------------------
ASSIGNMENT
The Policy may be assigned as collateral for a loan or other obligation. The
Company is not responsible for any payment made or action taken before receipt
of written notice of such assignment. Proof of interest must be filed with any
claim under a collateral assignment.
LIMIT ON RIGHT TO CONTEST AND SUICIDE EXCLUSION
The Company may not contest the validity of the Policy after it has been in
effect during the lifetime or the Insured for two years from the Issue Date.
Subject to state law, if the Policy is reinstated, the two-year period will be
measured from the date of reinstatement. Each requested increase in Stated
Amount is contestable for two years from its effective date (subject to state
law). In addition, if the Insured commits suicide during the two-year period
following issue, subject to state law, the Death Benefit will be limited to the
premiums paid less (i) the amount of any partial surrender, (ii) the amount of
any outstanding Policy loan, and (iii) the amount of any unpaid Deduction Amount
due. During the two-year period following an increase, the Death
27
<PAGE> 32
Benefit in the case of suicide will be limited to an amount equal to the
Deduction Amount paid for such increase.
MISSTATEMENT AS TO SEX AND AGE
If there has been a misstatement with regard to sex or age, benefits payable
will be adjusted to what the Policy would have provided with the correct
information. A misstatement with regard to sex or age in a substantially funded
Policy may cause a cash distribution that is includable in whole or in part in
the gross income of the Policy Owner.
VOTING RIGHTS
The Company is the legal owner of the underlying fund shares. However, we
believe that when an underlying fund solicits proxies, we are required to obtain
from policy owners who have chosen those investment options 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. If we determine that we no longer need to
comply with this voting method, we will vote on the shares in our own right.
DISREGARD OF VOTING INSTRUCTIONS
When permitted by state insurance regulatory authorities, we may disregard
voting instructions if the instructions would cause a change in the investment
objective or policies of the Separate Account or an Investment Option, or if it
would cause the approval or disapproval of an investment advisory Policy of an
Investment Option. In addition, we may disregard voting instructions in favor of
changes in the investment policies or the investment adviser of any Investment
Options which are initiated by a Policy Owner if we reasonably disapprove of
such changes. A change would be disapproved only if the proposed change is
contrary to state law or prohibited by state regulatory authorities, or if we
determine that the change would have an adverse effect on our general account
(i.e., if the proposed investment policy for an Investment Option may result in
overly speculative or unsound investments.) If we do disregard voting
instructions, a summary of that action and the reasons for such action would be
included in the next annual report to Policy Owners.
OTHER MATTERS
- --------------------------------------------------------------------------------
STATEMENTS TO POLICY OWNERS
We will maintain all records relating to the Separate Account and the Investment
Options. At least once each Policy Year, we will send you a statement containing
the following information:
- the Stated Amount and the Contract Value of the Policy (indicating the
number of Accumulation Units credited to the Policy in each Investment
Option and the corresponding Accumulation Unit Value);
- the date and amount of each premium payment;
- the date and amount of each Monthly Deduction;
- the amount of any outstanding Policy loan as of the date of the
statement, and the amount of any loan interest charged on the Loan
Account;
- the date and amount of any partial cash surrenders and the amount of any
partial surrender charges;
- the annualized cost of any supplemental benefits purchased under the
Policy; and
28
<PAGE> 33
- a reconciliation since the last report of any change in Contract Value
and Cash Surrender Value.
We will also send any other reports required by any applicable state or federal
laws or regulations.
SUSPENSION OF VALUATION
We reserve the right to suspend or postpone the date of any payment of any
benefit or values associated with the Separate Account for any Valuation Period
(1) when the New York Stock Exchange ("Exchange") is closed; (2) when trading on
the Exchange is restricted; (3) when the SEC determines so that disposal of the
securities held in the Underlying Funds is not reasonably practicable or the
value of the Investment Option's net assets cannot be determined; or (4) during
any other period when the SEC, by order, so permits for the protection of
security holders. We reserve the right to suspend or postpone the date of any
payment of any benefit or values associated with the fixed account for up to six
months.
DIVIDENDS
No dividends will be paid under the Policy.
MIXED AND SHARED FUNDING
It is conceivable that in the future it may not be advantageous for variable
life insurance and variable annuity Separate Accounts to invest in the
Investment Options simultaneously. This is called mixed funding. Certain funds
may be available to variable products of other companies not affiliated with
Travelers. This is called "shared funding." Although we -- and the funds -- do
not anticipate any disadvantages either to variable life insurance or to
variable annuity Policy Owners, the Investment Options' Boards of Directors
intend to monitor events to identify any material conflicts that may arise and
to determine what action, if any, should be taken. If any of the Investment
Options' Boards of Directors conclude that separate mutual funds should be
established for variable life insurance and variable annuity Separate Accounts,
the Company will bear the attendant expenses, but variable life insurance and
variable annuity Policy Owners would no longer have the economies of scale
resulting from a larger combined fund. Please consult the prospectuses of the
Investment Options for additional information.
DISTRIBUTION
The Company intends to sell the Policies in all jurisdictions where it is
licensed to do business and where the Policy is approved. The Policies will be
sold by life insurance sales representatives who are registered representatives
of the Company or certain other registered broker-dealers. The maximum first
year commission payable by the Company for distribution would be no greater than
35% of the actual premium paid in the first twelve months. Any sales
representative or employee will be qualified to sell variable life insurance
Policies under applicable federal and state laws. Each broker/dealer is
registered with the Securities and Exchange Commission under the Securities
Exchange Act of 1934 and all are members of the National Association of
Securities Dealers, Inc. CFBDS, Inc. serves as principal underwriter of the
Policies.
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<PAGE> 34
LEGAL PROCEEDINGS AND OPINION
[To be provided by amendment.]
INDEPENDENT ACCOUNTANTS
[To be provided by amendment.]
FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
GENERAL
The following is a general discussion of the federal income tax considerations
relating to the Policies. This discussion is based upon the Company's
understanding of the federal income tax laws as they are currently interpreted
by the Internal Revenue Service ("IRS"). These laws are complex, and tax results
may vary among individuals. A person contemplating the purchase of or the
exercise of elections under a Policy should seek competent tax advice.
IT SHOULD BE UNDERSTOOD THAT THIS IS NOT AN EXHAUSTIVE DISCUSSION OF ALL TAX
QUESTIONS THAT MIGHT ARISE UNDER THE POLICIES. NO ATTEMPT HAS BEEN MADE TO
ADDRESS ANY FEDERAL ESTATE TAX OR STATE AND LOCAL TAX CONSIDERATIONS WHICH MAY
ARISE IN CONNECTION WITH A POLICY. FOR COMPLETE INFORMATION, A QUALIFIED TAX
ADVISOR SHOULD BE CONSULTED.
THE COMPANY DOES NOT GUARANTEE THE TAX STATUS OF ANY POLICY AND THE FOLLOWING
TAX DISCUSSION IS BASED ON THE COMPANY'S UNDERSTANDING OF FEDERAL INCOME TAX
LAWS AS THEY ARE CURRENTLY INTERPRETED. THE COMPANY CANNOT GUARANTEE THAT THOSE
LAWS OR INTERPRETATIONS WILL REMAIN UNCHANGED.
TAX STATUS OF THE POLICY
DEFINITION OF LIFE INSURANCE
Section 7702 of the IRS Code ("Code") sets forth a definition of a life
insurance contract for federal tax purposes. Guidance as to how Section 7702 is
to be applied, however, is limited. Although the Secretary of the Treasury (the
"Treasury") is authorized to prescribe regulations implementing Section 7702,
and while proposed regulations and other limited, interim guidance has been
issued, final regulations have not been adopted. If a Policy were determined not
to be a life insurance contract for purposes of Section 7702, such Policy would
not provide the tax advantages normally provided by a life insurance policy.
With respect to a Policy issued on the basis of a standard rate class, the
Company believes (largely in reliance on IRS Notice 88-128 and the proposed
regulations under Section 7702) that such a Policy should meet the Section 7702
definition of a life insurance contract. There is less guidance on the
application of the rules with respect to a Policy that is issued on a
substandard basis (i.e., a premium class involving higher than standard
mortality risk). Thus, it is not clear whether such a Policy would satisfy
Section 7702, particularly if the Policy Owner pays the full amount of premiums
permitted under the Policy.
The Company reserves the right to make changes in the Policy if such changes are
deemed necessary to attempt to assure its qualification as a life insurance
contract for tax purposes.
DIVERSIFICATION
Section 817(h) of the Code provides that separate account investments (or the
investments of a mutual fund, the shares of which are owned by separate accounts
of insurance companies) underlying the Policy must be "adequately diversified"
in accordance with Treasury regulations in order for the Policy to qualify as
life insurance. The Treasury Department has issued regulations
30
<PAGE> 35
prescribing the diversification requirements in connection with variable
contracts. The Separate Account, through the Investment Options, intends to
comply with these requirements. Although the Company does not control the
Investment Options, it intends to monitor the investments of the Investment
Options to ensure compliance with the diversification requirements prescribed by
the Treasury Department.
INVESTOR CONTROL
In certain circumstances, owners of variable life insurance contracts may be
considered the owners, for federal income tax purposes, of the assets of the
separate accounts used to support their contract. In those circumstances, income
and gains from the separate account assets would be includable in the variable
contract owner's gross income each year. The IRS has stated in published rulings
that a variable contract owner will be considered the owner of separate account
assets if the contract owner possesses incidents of ownership in those assets,
such as the ability to exercise investment control over the assets. The Treasury
has also announced, in connection with the issuance of regulations concerning
diversification, that those regulations "do not provide guidance concerning the
circumstances in which investor control of the investments of a segregated asset
account may cause the investor (i.e., the Policy Owner), rather than the
insurance company, to be treated as the owner of the assets in the account."
This announcement also stated that guidance would be issued by way of
regulations or rulings on the "extent to which policyholders may direct their
investments to particular Investment Options without being treated as owners of
the underlying assets." As of the date of this prospectus, no such guidance has
been issued.
The ownership rights under the Policy are similar to, but different in certain
respects from, those described by the IRS in rulings in which it determined that
the policy owners received the desired tax benefits because they were not owners
of separate account assets. For example, a Policy Owner of this Policy has the
choice of more investment options to which to allocate premium payments and cash
values and may be able to transfer among investment options more frequently than
in such rulings. In addition, the Policy Owner may have the choice of certain
investment options which may be more similar to each other in their investment
objective and policies than in such rulings. These differences could result in
the Policy Owner being treated as the owner of the assets of the Separate
Account. In addition, the Company does not know what standard will be set forth
in the regulations or rulings which the Treasury is expected to issue, nor does
the Company know if such guidance will be issued. The Company therefore reserves
the right to modify the Policy as necessary to attempt to prevent the Policy
Owner from being considered the owner of a pro rata share of the assets of the
Separate Account.
The remaining tax discussion assumes that the Policy qualifies as a life
insurance contract for federal income tax purposes.
TAX TREATMENT OF POLICY BENEFITS
IN GENERAL
The Company believes that the proceeds and Contract value increases of a Policy
should be treated in a manner consistent with a fixed-benefit life insurance
policy for federal income tax purposes. Thus, the Death Benefit under the Policy
should be excludable from the gross income of the Beneficiary.
In addition, the Policy Owner will generally not be deemed to be in constructive
receipt of the Contract Value, including increments thereof, until there is a
distribution. The tax consequences of distribution from, and loans taken from or
secured by, a Policy depend on whether the Policy is classified as a "Modified
Endowment Contract." However, whether a Policy is or is not a Modified Endowment
Contract, upon a complete surrender or lapse of a Policy or when benefits are
paid at
31
<PAGE> 36
a Policy's maturity date, if the amount received plus the amount of indebtedness
exceeds the total investment in the Policy, the excess will generally be treated
as ordinary income subject to tax.
Depending on the circumstances, the exchange of a Policy, a change in the
Policy's Death Benefit Option, a Policy loan, a partial withdrawal, a surrender,
a change in ownership, or an assignment of the Policy may have federal income
tax consequences. In addition, federal, state and local transfer, and other tax
consequences of ownership or receipt of Policy proceeds depend on the
circumstances of each Owner or beneficiary. Therefore, it is important to check
with a tax adviser prior to the purchase of a policy.
MODIFIED ENDOWMENT CONTRACTS
A modified endowment contract is defined under tax law as any policy that
satisfies the present legal definition of a life insurance contract but which
fails to satisfy a 7-pay test. This failure could occur with contracts entered
into after June 21, 1988, or with certain older contracts materially changed
after that date. A Section 1035 exchange of an older contract into a contract
after that date will not by itself cause the new contract to be a modified
endowment contract if the older contract had not become one prior to the
exchange. However, the new contract must be re-tested under the 7-pay test
rules.
A contract fails to satisfy the 7-pay test if the cumulative amount of premiums
paid under the contract at any time during the first seven contract years
exceeds the sum of the net level premiums that would have been paid on or before
such time had the contract provided for paid-up future benefits after the
payment of seven level annual premiums. If a material change in the contract
occurs either during the first seven contract years, or later, a new seven-year
testing period is begun. A decrease to Stated Amount made in the first seven
years will cause a retest of the cumulative amount of premiums. Decreases made
after the first seven contract years are not considered a material change,
provided no other material changes have occurred prior. Tax regulations or other
guidance will be needed to fully define those transactions which are material
changes. The Company has established safeguards for monitoring whether a
contract may become a modified endowment contract.
Loans and partial withdrawals from, as well as collateral assignments of,
Policies that are modified endowment contracts will be treated as distributions
to the Policy Owner for tax purposes. All pre-death distributions (including
loans, partial withdrawals and collateral assignments) from these Policies will
be included in gross income on an income-first basis to the extent of any income
in the Policy (the cash value less the Policy Owner's investment in the Policy)
immediately before the distribution.
The law also imposes a 10% penalty tax on pre-death distributions (including
loans, collateral assignments, partial withdrawals and complete surrenders) from
modified endowment contracts to the extent they are included in income, unless a
specific exception to the penalty applies. The penalty does not apply to amounts
which are distributed on or after the date on which the taxpayer attains age
59 1/2, because the taxpayer is disabled, or as substantially equal periodic
payments over the taxpayer's life (or life expectancy) or over the joint lives
(or joint life expectancies) of the taxpayer and his or her beneficiary.
Furthermore, if the loan interest is capitalized by adding the amount due to the
balance of the loan, the amount of the capitalized interest will be treated as
an additional distribution subject to income tax as well as the 10% penalty tax,
if applicable, to the extent of income in the Policy.
The Death Benefit of a modified endowment contract remains excludable from the
gross income of the Beneficiary to the extent described above in "Tax
Consequences of Life Insurance Contracts." Furthermore, no part of the
investment growth of the Contract Value of a modified endowment contract is
includable in the gross income of the Contract Owner unless the contract
matures, is distributed or partially surrendered, is pledged, collaterally
assigned, or borrowed against, or otherwise terminates with income in the
contract prior to death. A full surrender of the
32
<PAGE> 37
contract after age 59 1/2 will have the same tax consequences as noted above in
"Tax Consequences of Life Insurance Contracts."
EXCHANGES
Any Policy issued in exchange for a modified endowment contract will be subject
to the tax treatment accorded to modified endowment contracts. However, the
Company believes that any Policy received in exchange for a life insurance
contract that is not a modified endowment contract will generally not be treated
as a modified endowment contract if the face amount of the Policy is greater
than or equal to the death benefit of the policy being exchanged. The payment of
any premiums at the time of or after the exchange may, however, cause the Policy
to become a modified endowment contract. A prospective purchaser should consult
a qualified tax advisor before authorizing the exchange of his or her current
life insurance contract for a Policy.
AGGREGATION OF MODIFIED ENDOWMENT CONTRACTS
In the case of a pre-death distribution (including a loan, partial withdrawal,
collateral assignment or complete surrender) from a Policy that is treated as a
modified endowment contract, a special aggregation requirement may apply for
purposes of determining the amount of the income on the Policy. Specifically, if
the Company or any of its affiliates issues to the same Policy Owner more than
one modified endowment contract within a calendar year, then for purposes of
measuring the income on the Policy with respect to a distribution from any of
those Policies, the income on the Policy for all those Policies will be
aggregated and attributed to that distribution.
POLICIES WHICH ARE NOT MODIFIED ENDOWMENT CONTRACTS
Unlike loans from modified endowment contracts, a loan from a Policy that is not
a modified endowment contract will be considered indebtedness of the Owner and
no part of a loan will constitute income to the Owner.
Pre-death distributions from a Policy that is not a modified endowment contract
will generally not be included in gross income to the extent that the amount
received does not exceed the Policy Owner's investment in the Policy. (An
exception to this general rule may occur in the case of a decrease or change
that reduces the benefits provided under a Policy in the first 15 years after
the Policy is issued and that results in a cash distribution to the Policy
Owner. Such a cash distribution may be taxed in whole or in part as ordinary
income to the extent of any gain in the Policy.) Further, the 10% penalty tax on
pre-death distributions does not apply to Policies that are not modified
endowment contracts.
Certain changes to Policies that are not modified endowment contracts may cause
such Policies to be treated as modified endowment contracts. A Policy Owner
should therefore consult a tax advisor before effecting any change to a Policy
that is not a modified endowment contract.
TREATMENT OF LOAN INTEREST
If there is any borrowing against the Policy, the interest paid on loans may not
be tax deductible.
THE COMPANY'S INCOME TAXES
The Company is taxed as a life insurance company under federal income tax law.
Presently, the Company does not expect to incur any income tax or the earnings
or the realized capital gains attributable to Fund UL III. However, the Company
may assess a charge against the Investment Options for federal income taxes
attributable to those accounts in the event that the Company incurs income or
capital gains or other tax liability attributable to Fund UL III under future
tax law.
33
<PAGE> 38
THE COMPANY
- --------------------------------------------------------------------------------
The Travelers Insurance Company (the "Company") is a stock insurance company
chartered in 1864 in Connecticut and has been engaged in the insurance business
since that time. The Company writes individual life insurance and individual and
group annuity contracts on a non-participating basis, and acts as depositor for
the Separate Account assets. 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
obligations as depositor for Fund UL III may not be transferred without notice
to and consent of Policy Owners.
The Company is an indirect wholly owned subsidiary of Citigroup Inc., a
financial services holding company. The Company's principal executive offices
are located at One Tower Square, Hartford, Connecticut 06183, telephone number
(860) 422-3985.
The Company is subject to Connecticut law governing insurance companies and is
regulated and supervised by the Connecticut Commissioner of Insurance. An annual
statement in a prescribed form must be filed with the Commissioner on or before
March 1 in each year covering the operations of the Company for the preceding
year and its financial condition on December 31 of such year. The Company's
books and assets are subject to review or examination by the Commissioner, and a
full examination of its operations is conducted at least once every four years.
In addition, the Company is subject to the insurance laws and regulations of any
jurisdiction in which it sells its insurance Policies, as well as to various
federal and state securities laws and regulations.
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.
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
necessary to address the Year 2000 issue. This 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 has achieved compliance with respect to its business critical
systems in accordance with its Year 2000 plan and has completed the process of
certification to validate compliance. An ongoing re-certification process will
be put in place for third and fourth quarter 1999 to ensure all systems and
products remain compliant.
The total pre-tax cost associated with the required modifications and
conversions is expected to be approximately $35 million and is being expensed as
incurred in the period 1996 through 1999. As of September 30, 1999, the Company
has incurred approximately $30.1 million on these efforts. The Company also has
third party customers, financial institutions, vendors and others with which it
conducts business and has confirmed their plans to address and resolve Year 2000
issues on a timely basis. While it is likely that these efforts by third party
vendors and customers 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 periods.
34
<PAGE> 39
In addition, the Company has developed contingency plans to address perceived
risks associated with the Year 2000 effort. These plans address the possibility
of internal systems failures and the possibility of failure of systems or
processes outside the Company's control. These business resumption contingency
plans would enable business critical units to function beginning January 1, 2000
in the event of an unexpected failure.
MANAGEMENT
- --------------------------------------------------------------------------------
DIRECTORS OF THE TRAVELERS INSURANCE COMPANY
The following are the Directors and Executive Officers of The Travelers
Insurance Company. Unless otherwise indicated, the principal business address
for all individuals is the Company's Home Office at One Tower Square, Hartford,
Connecticut 06183. References to Citigroup include, prior to December 31, 1993,
Primerica Corporation or its predecessors, and prior to October 8, 1998,
Travelers Group, Inc.
<TABLE>
<CAPTION>
DIRECTOR
NAME AND POSITION SINCE PRINCIPAL BUSINESS
----------------- -------- ------------------
<S> <C> <C>
Jay S. Benet................... 1996 Senior Vice President since February 1994; Chief
Director Financial Officer, Chief Accounting Officer, and
Controller since January, 1999 and Vice President
(1990-1994) of The Travelers Insurance Company; Partner
(1986-1990) of Coopers & Lybrand.
Katherine M. Sullivan.......... 1996 Senior Vice President since May 1996 and General
Director Counsel from May 1996 to August 1999 of The Travelers
Insurance Company; Senior Vice President and General
Counsel (1994-1996) Connecticut Mutual; Special Counsel
& Chief of Staff (1988-1994) Aetna Life & Casualty.
George C. Kokulis.............. 1996 Executive Vice President since July 1999. Senior Vice
Director President (1995-1999), Vice President (1993-1995) of
The Travelers Insurance Company.
Marc P. Weill*................. 1994 Senior Vice President-Investments since 1993 and Chief
Director Investment Officer since 1995 of The Travelers
Insurance Group Inc.; Senior Vice President and Chief
Investment Officer of Citigroup Inc. since 1992; Vice
President (1990-1992), Primerica Corporation; Vice
President (1989-1990), Smith Barney Inc.
J. Eric Daniels................ 1998 Chairman since November 1999, President and Chief
Director Executive Officer since December 1998 of The Travelers
Insurance Company; Chief Operating Officer of Global
Consumer Bank of Citibank; since 1993, vice president,
Citibank.
</TABLE>
- ---------------
* Principal business address: Citigroup Inc., 153 East 53rd St., New York, New
York 10043
35
<PAGE> 40
SENIOR OFFICERS OF THE TRAVELERS INSURANCE COMPANY
The following are the Senior Officers of The Travelers Insurance Company, other
than the Directors listed above, as of the date of this Prospectus. Unless
otherwise indicated, the principal business address for all individuals listed
is One Tower Square, Hartford, Connecticut 06183.
<TABLE>
<CAPTION>
NAME POSITION WITH INSURANCE COMPANY
---- -------------------------------
<S> <C>
Stuart Baritz......... Senior Vice President
Barry Jacobson........ Senior Vice President
Russell H. Johnson.... Senior Vice President
Warren H. May......... Senior Vice President
Jay S. Fishman........ Senior Vice President
David A. Tyson........ Senior Vice President
F. Denney Voss........ Senior Vice President
Marla Berman Senior Vice President and General Counsel
Lewitus.............
Kathleen A. Preston... Senior Vice President
Mary Jean Thornton.... Senior Vice President and Chief Information Officer
</TABLE>
Information relating to the management of the underlying funds is contained in
the applicable prospectuses.
36
<PAGE> 41
EXAMPLE OF POLICY CHARGES
- --------------------------------------------------------------------------------
The following chart illustrates the Monthly Deduction Amounts that would apply
under a Policy based on the assumptions listed below. Monthly Deduction Amounts
generally will be higher for an Insured who is older than the assumed Insured,
and lower for an Insured who is younger (assuming the Insureds have the same
risk classification). Cost of insurance rates go up each year as the Insured
becomes a year older.
Male, Age 45
Guarantee Issue
Non-Smoker
Annual Premium: $25,000 for seven years
Hypothetical Gross Annual Investment
Rate of Return: 8%
Face Amount: $436,557
Level Death Benefit Option
Current Charges
<TABLE>
<CAPTION>
TOTAL MONTHLY DEDUCTION
FOR THE POLICY YEAR
-----------------------
COST OF
POLICY CUMULATIVE INSURANCE ADMINISTRATIVE PER $1,000
YEAR PREMIUMS SALES LOAD CHARGES CHARGES CHARGE
- ------ ---------- ---------- --------- -------------- ----------
<S> <C> <C> <C> <C> <C>
1 $ 25,000 $2,500 $ 356 $60 $523
2 $ 50,000 $2,500 $ 493 $60 $523
3 $ 75,000 $2,000 $ 607 $60 $523
5 $125,000 $2,000 $ 606 $60 $523
10 $175,000 $ 0 $1,029 $60 $523
</TABLE>
Hypothetical results shown above are illustrative only and are based on the
Hypothetical Gross Annual Investment Rate of Return shown above. This
Hypothetical Gross Annual Investment Rate of Return should not be deemed to be a
representation of past or future investment results. Actual investment results
may be more or less than those shown. No representations can be made that the
hypothetical rates assumed can be achieved for any one year or sustained over
any period of time.
ILLUSTRATIONS
- --------------------------------------------------------------------------------
[To be provided by amendment.]
37
<PAGE> 42
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE> 43
APPENDIX A
PERFORMANCE INFORMATION
- --------------------------------------------------------------------------------
From time to time, we may show investment performance for the investment
options, the percentage change in the value of an Accumulation Unit based on the
performance of the Investment Option over a period of time, determined by
dividing the increase (decrease) in value for that unit by the Accumulation Unit
Value at the beginning of the period.
For Investment Options of Fund UL III that invest in underlying funds that were
in existence before the Investment Option became available under the Policy,
average annual rates of return may include periods prior to the inception of the
Investment Option. Performance calculations for Investment Options with
pre-existing Investment Options will be calculated by adjusting the actual
returns of the Investment Options to reflect the charges that would have been
assessed under the Investment Options had the Investment Option been available
under Fund during the period shown.
The following performance information represents the percentage change in the
value of an Accumulation Unit of the Investment Options for the periods
indicated, and reflects all expenses of the Investment Options. The chart
reflects the guaranteed maximum .75% mortality and expense risk charge. The
rates of return do not reflect the front-end sales charge (which is deducted
from premium payments) nor do they reflect Monthly Deduction Amounts. These
charges would reduce the average annual return reflected.
The surrender charges and Monthly Deduction Amounts for a hypothetical Insured
are depicted in the Example following the Rates of Returns. See "Charges and
Deductions" for more information regarding fees assessed under the Policy. For
illustrations of how these charges affect Contract Values and Death Benefits,
see "Illustrations." The performance information described in this prospectus
may be used from time to time in advertisement for the Policy, subject to
National Association of Securities Dealers, Inc. ("NASD") and applicable state
approval and guidelines.
The table below shows the net annual rates of return for accumulation units of
investment options available through the Variable Life Policy.
A-1
<PAGE> 44
AVERAGE ANNUAL RETURNS THROUGH 12/31/99
COLI FUND PERFORMANCE
<TABLE>
<CAPTION>
INCEPTION SINCE
THE FUND DATE YTD 1 YR 3 YR 5 YR 10 YR INCEPTION
- ----------------------------------------- --------- ------ ------ ----- ----- ----- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Warburg Pincus Trust Emerging Markets
Portfolio................................ Dec-97 -16.49% -16.49% -- -- -- -16.49%
Lazard International Stock Portfolio
(Equity)............................... Aug-96 12.15% 12.15% -- -- -- 11.58%
Smith Barney International Equity
Portfolio.............................. Jun-94 5.99% 5.99% 8.29% -- -- 6.82%
Delaware Premium Small Cap Value Series
(Value)................................ Dec-93 -5.23% -5.23% 15.23% -- -- 12.64%
Dreyfus Small Cap Portfolio (Blend)...... Aug-90 -3.89% -3.89% 9.04% 12.20% 25.88%
Travelers Disciplined Small Cap Stock
Portfolio (Blend)...................... May-98 -- -- -- -- -- -11.00%
Delaware Investments REIT Series......... May-98 -- -- -- -- -- -9.21%
Salomon Brothers Cap Fund................ Feb-98 -- -- -- -- -- 17.64%
Strong Schaefer Value Fund II (Value).... Oct-97 1.57% 1.57% -- -- -- 0.37%
Travelers Disciplined Mid-Cap Portfolio
(Blend)................................ Apr-97 -- -- -- -- -- -11.00%
MFS Emerging Growth Portfolio (Growth)... Aug-96 33.71% 33.71% -- -- -- 25.71%
AIM Capital Appreciation (Growth)........ Oct-95 16.57% 16.57% 14.13% -- -- 11.64%
MFS Mid Cap Growth Portfolio............. Mar-98 -- -- -- -- -- 0.26%
Large Cap Portfolio (Fidelity)........... Aug-96 34.93% 34.93% -- -- -- 30.94%
Equity Income Portfolio (Fidelity)....... Aug-96 11.86% 11.86% -- -- -- 23.58%
Alliance Growth (Blend).................. Dec-85 20.68% 20.68% 23.99% 20.07% 15.97% 15.12%
Capital Appreciation (Janus) (Growth).... Dec-85 60.91% 60.91% 37.14% 27.12% 20.74% 16.44%
Dreyfus Capital Appreciation Portfolio
(Growth)............................... Apr-93 29.59% 29.59% 27.34% 23.01% -- 21.05%
Salomon Brothers Investors Fund
(Value)................................ Feb-98 -- -- -- -- -- 10.12%
Smith Barney Large Capitalization Growth
Portfolio Growth)...................... May-98 -- -- -- -- -- 24.24%
Van Kampen American Cap Enterprise
Portfolio (Growth)..................... Jun-94 24.39% 24.39% 24.79% -- -- 24.21%
Salomon Brothers Total Return Fund....... Feb-98 -- -- -- -- -- 5.38%
MFS Total Return Portfolio............... Jun-94 11.16% 11.16% 15.20% -- -- 14.93%
Fidelity VIP II Asset Manager
Portfolio.............................. Sep-89 14.51% 14.51% 16.19% 11.29% -- 12.45%
Bankers Trust EAFE Index Fund............ Oct-97 20.88% 20.88% -- -- -- 14.76%
Bankers Trust Small Cap Index Fund....... Oct-97 -2.59% -2.59% -- -- -- -6.32%
Equity Index Portfolio................... Oct-91
Travelers U.S. Government Securities
Portfolio.............................. Jan-92 9.69% 9.69% 7.49% 7.65% -- 7.87%
Travelers Convertible Bond Portfolio..... May-98 -- -- -- -- -- -1.65%
Travelers High Yield Bond Trust.......... Jun-83 6.07% 6.07% 12.43% 9.94% 8.98% 8.59%
Salomon Brothers Strategic Bond Fund..... Feb-98 -- -- -- -- -- 5.84%
Smith Barney Diversified Strategic
Income................................. Dec-92 5.39% 5.39% 7.16% 6.43% -- 7.46%
American Odyssey Intermediate Bond Fund.. May-93 7.98% 7.98% 6.13% 5.77% -- 5.80%
Travelers Money Market Portfolio......... Dec-87 4.58% 4.58% 4.28% 3.78% 4.42% 4.62%
Social Awareness Stock Portfolio......... May-92 31.60% 31.60% 25.80% 20.70% -- 17.86%
MFS Research Portfolio................... Mar-98 -- -- -- -- -- 5.43%
Strategic Stock Portfolio................ May-98 -- -- -- -- -- -5.93%
Janus Worldwide Growth Portfolio
Janus Balanced Portfolio
Janus Global Technology Portfolio
Fidelity VIP II Contrafund
Portfolio -- Service Class
Franklin Small Cap Investments
Fund -- Class 2
</TABLE>
A-2
<PAGE> 45
APPENDIX B
TARGET PREMIUM PER $1,000
OF STATED AMOUNT
ALL UNDERWRITING CLASSES
STANDARD AND PREFERRED
SMOKER AND NON-SMOKER
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AGE MALE FEMALE UNISEX
--- ---- ------ ------
<S> <C> <C> <C>
20 25.49885 21.35312 24.67777
21 26.25533 22.05852 25.42278
22 27.04281 22.79038 26.19845
23 27.86586 23.54970 27.00937
24 28.72917 24.33773 27.85695
25 29.63486 25.15422 28.74463
26 30.58643 26.00205 29.67441
27 31.58335 26.88113 30.64690
28 32.62452 27.79141 31.66258
29 33.71079 28.73438 32.72066
30 34.84316 29.71150 33.82174
31 36.02088 30.72326 34.96677
32 37.24380 31.77143 36.15529
33 38.51130 32.85823 37.38654
34 39.82501 33.98300 38.66183
35 41.18470 35.14808 39.98270
36 42.59063 36.35310 41.34755
37 44.04142 37.59596 42.75638
38 45.53736 38.87592 44.20922
39 47.07884 40.19069 45.70492
40 48.66485 41.53957 47.24193
41 50.29448 42.92135 48.82045
42 51.96862 44.33684 50.44101
43 53.68801 45.78699 52.10416
44 55.45241 47.27608 53.81251
45 57.26368 48.80417 55.56579
46 59.12431 50.37449 57.36606
47 61.03580 51.99103 59.21574
48 63.00258 53.65371 61.11856
49 65.02827 55.36365 63.07747
50 67.11449 57.12257 65.09434
</TABLE>
<TABLE>
<CAPTION>
AGE MALE FEMALE UNISEX
--- ---- ------ ------
<S> <C> <C> <C>
51 69.26320 58.93024 67.16829
52 71.47047 60.78640 69.29887
53 73.73607 62.68726 71.48414
54 76.05516 64.63067 73.71929
55 78.42689 66.61974 76.00345
56 80.85354 68.65902 78.34017
57 83.34160 70.75893 80.73560
58 85.90006 72.93427 83.20014
59 88.53960 75.19989 85.74576
60 91.26869 77.56483 88.37912
61 94.09169 80.03119 91.10324
62 97.00755 82.59477 93.91915
63 100.01297 85.23864 96.81869
64 103.10493 87.94870 99.79450
65 106.28342 90.71791 102.84656
66 109.56101 93.55528 105.98510
67 112.96034 96.48236 109.23156
68 116.51614 99.53950 112.62104
69 120.26554 102.77254 116.19089
70 124.23658 106.21512 119.96965
71 128.44465 109.89099 123.97439
72 132.88796 113.80393 128.20151
73 137.54435 117.93734 132.63054
74 142.38323 122.27404 137.23573
75 147.39278 126.80803 142.00609
76 152.58944 131.55967 146.95678
77 158.02373 136.57999 152.13912
78 163.78802 141.95257 157.64536
79 169.99253 147.77602 163.58178
80 176.72991 154.13846 170.04077
</TABLE>
B-1
<PAGE> 46
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<PAGE> 47
APPENDIX C
CASH VALUE ACCUMULATION TEST FACTORS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
ATTAINED
AGE MALE FEMALE UNISEX
- -------- ---- ------ ------
<S> <C> <C> <C>
20 633.148% 729.902% 634.212%
21 614.665% 706.514% 615.406%
22 596.465% 683.789% 596.908%
23 578.611% 661.708% 578.729%
24 560.815% 640.288% 560.856%
25 543.379% 619.481% 543.379%
26 526.258% 599.296% 526.258%
27 509.509% 579.740% 509.509%
28 493.139% 560.793% 493.139%
29 477.198% 542.436% 477.198%
30 461.701% 524.666% 461.701%
31 446.663% 507.462% 446.663%
32 432.102% 490.804% 432.102%
33 418.008% 474.701% 418.008%
34 404.389% 459.135% 404.389%
35 391.242% 444.108% 391.242%
36 378.572% 429.635% 378.572%
37 366.371% 415.712% 366.371%
38 354.629% 402.342% 354.629%
39 343.340% 389.510% 343.340%
40 332.495% 377.202% 332.495%
41 322.076% 365.390% 322.076%
42 312.066% 354.046% 312.066%
43 302.451% 343.130% 302.451%
44 293.213% 332.625% 293.213%
45 284.333% 322.505% 284.333%
46 275.796% 312.743% 275.796%
47 267.583% 303.331% 267.583%
48 259.681% 294.258% 259.681%
49 252.082% 285.511% 252.082%
50 244.777% 277.080% 244.777%
51 237.768% 268.956% 237.768%
52 231.048% 261.136% 231.048%
53 224.616% 253.611% 224.616%
54 218.462% 246.362% 218.462%
55 212.574% 239.368% 212.574%
56 206.935% 232.606% 206.935%
57 201.529% 226.050% 201.529%
58 196.343% 219.684% 196.343%
59 191.366% 213.506% 191.366%
</TABLE>
<TABLE>
<CAPTION>
ATTAINED
AGE MALE FEMALE UNISEX
- -------- ---- ------ ------
<S> <C> <C> <C>
60 186.595% 207.521% 186.595%
61 182.029% 201.744% 182.029%
62 177.668% 196.192% 177.668%
63 173.510% 190.877% 173.510%
64 169.549% 185.796% 169.549%
65 165.775% 180.933% 165.775%
66 162.175% 176.268% 162.175%
67 158.734% 171.774% 158.734%
68 155.443% 167.434% 155.443%
69 152.298% 163.242% 152.296%
70 149.296% 159.205% 149.296%
71 146.446% 155.337% 146.446%
72 143.754% 151.657% 143.754%
73 141.225% 148.174% 141.225%
74 138.855% 144.893% 138.855%
75 142.252% 142.252% 142.252%
76 140.077% 140.077% 140.077%
77 138.021% 138.021% 138.021%
78 136.067% 136.067% 136.067%
79 134.206% 134.206% 134.206%
80 132.698% 132.698% 132.698%
81 131.020% 131.020% 131.020%
82 129.445% 129.445% 129.445%
83 127.981% 127.981% 127.981%
84 126.623% 126.623% 126.623%
85 120.411% 120.411% 120.411%
86 119.280% 119.280% 119.280%
87 118.211% 118.211% 118.211%
88 117.185% 117.185% 117.185%
89 116.182% 116.182% 116.182%
90 115.177% 115.177% 115.177%
91 114.146% 114.146% 114.146%
92 113.058% 113.058% 113.058%
93 111.887% 111.887% 111.887%
94 110.625% 110.625% 110.625%
95 109.295% 109.295% 109.295%
96 107.982% 107.982% 107.982%
97 106.958% 106.958% 106.958%
98 106.034% 106.034% 106.034%
99 103.603% 103.603% 103.603%
</TABLE>
C-1
<PAGE> 48
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<PAGE> 49
TRAVELERS
CORPORATE OWNED VARIABLE
LIFE INSURANCE POLICIES
L- March 2000
<PAGE> 50
UNDERTAKING TO FILE REPORTS
Subject to the terms and conditions of Section 15(d) of the Securities Exchange
Act of 1934, the undersigned Registrant hereby undertakes to file with the
Securities and Exchange Commission such supplementary and periodic information,
documents and reports as may be prescribed by any rule or regulation of the
Commission heretofore or hereafter duly adopted pursuant to authority conferred
in that section.
RULE 484 UNDERTAKING
Sections 33-770 et seq inclusive 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 wholly 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 and in all other cases, his conduct was at
least not opposed to the best interests of the corporation, and in a criminal
case he had no reasonable cause to believe his conduct was unlawful; 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.
Citigroup Inc. also provides liability insurance for its directors and officers
and the directors and officers of its subsidiaries, including the Registrant.
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.
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 liabilities (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> 51
UNDERTAKING TO REPRESENT REASONABLENESS OF CHARGES
The Company hereby represents that the aggregate charges under the Policy 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.
CONTENTS OF REGISTRATION STATEMENT
This Registration Statement comprises the following papers and documents:
1. The facing sheet.
2. The Prospectus.
3. The undertaking to file reports.
4. The signatures.
Written consents of the following persons:
A. Consent of General Counsel, to filing of her opinion as
an exhibit to this Registration Statement and to the reference
to her opinion under the caption "Legal Proceedings and Opinion"
in the Prospectus. (See Exhibit 11 below.) To be filed by
Amendment.
B. Consent and Actuarial Opinion pertaining to the illustration
contained in the prospectus. To be filed by amendment
C. Consent of Independent Certified Public Accountants. To be
filed by amendment.
D. Powers of Attorney. (See Exhibit 12 below.)
EXHIBITS
1. Resolution of the Board of Directors of The Travelers Insurance
Company authorizing the establishment of the Registrant.
(Incorporated herein by reference to Exhibit 1 to the Registration
Statement on S-6, File No. 333-71349, filed January 28, 1999.)
2. Not Applicable.
3(a). Distribution and Principal Underwriting Agreement among the
Registrant, The Travelers Insurance Company and CFBDS, Inc.
(Incorporated herein by reference to Exhibit 3(a) to Pre-Effective
Amendment N. 1 to the Registration Statement on Form N-4, File No.
333-60227, filed November 9, 1998.)
3(b). Selling Agreement. (Incorporated herein by reference to Exhibit 3(ba)
to Pre-Effective Amendment N. 1 to the Registration Statement on Form
N-4, File No. 333-60227, filed November 9, 1998.)
3(c). Agents Agreements, including schedule of sales commissions. To be
filed by amendment.
4. None
5. Variable Life Insurance Contracts. To be filed by amendment.
<PAGE> 52
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 filed on Form N-4, File No. 333-40193, filed
November 13, 1997.)
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 filed on Form N-4, File No. 333-40193, filed
November 13, 1997.)
7. None
8. Participation Agreements. To be filed by amendment.
9. None
10. Application for Variable Life Insurance Contracts. To be filed by
amendment.
11. Opinion of counsel as to the legality of the securities being
registered. To be filed by amendment.
12. Power of Attorney authorizing Ernest J. Wright or Kathleen A. McGah
as signatory for Jay S. Benet, J. Eric Daniels, George C. Kokulis,
Katherine M. Sullivan and Marc P. Weill. (Incorporated herein by
reference to Exhibit 12 to the Registration Statement on S-6, File
No. 333-71349, filed January 28, 1999.)
<PAGE> 53
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant, The
Travelers Fund UL III for Variable Life Insurance, has duly caused this
registration statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the city of Hartford and state of Connecticut, on the 14th
day of January 2000.
THE TRAVELERS FUND UL III FOR VARIABLE LIFE INSURANCE
(Registrant)
THE TRAVELERS INSURANCE COMPANY
(Depositor)
By: *JAY S. BENET
------------------------------------------
Jay S. Benet
Senior Vice President, Chief Financial Officer,
Chief Accounting Officer and Controller
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities indicated
on the 14th day of January 2000.
*J. ERIC DANIELS Director, President and Chief Executive Officer
- ---------------------------
(J. Eric Daniels)
*JAY S. BENET Director, Senior Vice President, Chief Financial
- --------------------------- Officer, Chief Accounting Officer and Controller
(Jay S. Benet)
*GEORGE C. KOKULIS Director
- ---------------------------
(George C. Kokulis)
*KATHERINE M. SULLIVAN Director
- ---------------------------
(Katherine M. Sullivan)
*MARC P. WEILL Director
- ---------------------------
(Marc P. Weill)
*By:
--------------------------------------
/s/ Ernest J. Wright, Attorney-in-Fact
<PAGE> 54
EXHIBIT INDEX
<TABLE>
<CAPTION>
Written Consents Method of Filing
- ---------------- ----------------
<S> <C> <C>
A. Consent of General Counsel, to filing of her opinion an an To be filed by
exhibit to this Registration Statement and to the reference amendment.
to her opinion under the caption "Legal Proceedings and
Opinion" in the Prospectus. (See Exhibit 11 below.)
B. Consent and Actuarial Opinion pertaining to the To be filed by
illustrations contained in the prospectus. amendment
C. Consent of Independent Certified Public Accountants. To be filed by
amendment.
</TABLE>
EXHIBITS
<TABLE>
<S> <C> <C>
3(c). Agents Agreements, including schedule of sales commissions. To be filed by
amendment
5. Variable Life Insurance Contracts. To be filed by
amendment.
8. Participation Agreement. To be filed by
amendment
10. Application for Variable Life Insurance Contracts To be filed by
amendment
11. Opinion of counsel as to the legality of securities being To be filed by
registered. amendment.
</TABLE>
