<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to ___________
------------------
Commission file number 33-33691
------------------
THE TRAVELERS INSURANCE COMPANY
(exact name of registrant as specified in its charter)
CONNECTICUT 06-0566090
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
(Address of principal executive offices) (Zip Code)
(203) 277-0111
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--------------- ---------------
As of August 11, 1995, there were outstanding 40,000,000 shares of common stock,
par value $2.50, of the Registrant, all of which were owned by The Travelers
Insurance Group Inc., a subsidiary of Travelers Group Inc.
REDUCED DISCLOSURE FORMAT
The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format.
<PAGE> 2
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
FORM 10-Q
For the Quarter Ended June 30, 1995
Table of Contents
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page
----
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Statement of Operations and Retained Earnings for the Quarter and
Six Months Ended June 30, 1995 and 1994 (unaudited) ........................................................... 3
Condensed Consolidated Balance Sheet as of June 30, 1995 (unaudited) and
December 31, 1994.............................................................................................. 4
Condensed Consolidated Statement of Cash Flows for the
Six Months Ended June 30, 1995 and 1994 (unaudited)............................................................ 5
Notes to Condensed Consolidated Financial Statements (unaudited)............................................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations ................................................................. 9
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ..................................................................... 13
SIGNATURES .................................................................................................... 14
</TABLE>
2
<PAGE> 3
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
AND RETAINED EARNINGS (Unaudited)
(in millions)
<TABLE>
<CAPTION>
Quarter Ended Six Months Ended
June 30, June 30,
------------------- --------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES
Premiums $ 387 $ 373 $ 773 $ 742
Net investment income 455 384 905 775
Realized investment gains (losses) 11 10 (12) 16
Other revenues 49 40 117 87
------- ------- ------- -------
902 807 1,783 1,620
------- ------- ------- -------
BENEFITS AND EXPENSES
Current and future insurance benefits 315 280 601 588
Interest credited to contractholders 239 224 498 452
Amortization of deferred acquisition costs
and value of insurance in force 75 71 146 133
General and administrative expenses 80 81 184 169
------- ------- ------- -------
709 656 1,429 1,342
------- ------- ------- -------
Income from continuing operations
before federal income taxes 193 151 354 278
Federal income taxes 67 53 122 97
------- ------- ------- -------
Income from continuing operations 126 98 232 181
Discontinued operations, net of income taxes
Income from operations 26 33 39 63
Gain on disposition -- -- 20 --
------- ------- ------- -------
Income from discontinued operations 26 33 59 63
------- ------- ------- -------
Net income 152 131 291 244
Retained earnings beginning of period 1,701 1,130 1,562 1,017
------- ------- ------- -------
Retained earnings end of period $ 1,853 $ 1,261 $ 1,853 $ 1,261
======= ======= ======= =======
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(in millions)
<TABLE>
<CAPTION>
June 30, December 31,
1995 1994
--------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Investments, including real estate held for sale $ 26,618 $ 24,956
Separate and variable accounts 6,041 5,160
Reinsurance recoverable 2,920 2,886
Assets of discontinued operations 2,638 3,414
Other assets 3,845 4,119
--------- ---------
Total assets $ 42,062 $ 40,535
--------- ---------
LIABILITIES
Contractholder funds $ 14,683 $ 15,373
Benefit and other insurance reserves 11,376 11,291
Separate and variable accounts 6,012 5,128
Liabilities of discontinued operations 2,389 3,235
Other liabilities 1,921 1,154
--------- ---------
Total liabilities 36,381 36,181
--------- ---------
SHAREHOLDER'S EQUITY
Capital stock, par value $2.50; 40 million
shares authorized, issued and outstanding 100 100
Additional paid-in capital 3,464 3,452
Unrealized investment gains (losses), net of taxes 264 (760)
Retained earnings 1,853 1,562
--------- ---------
Total shareholder's equity 5,681 4,354
--------- ---------
Total liabilities and shareholder's equity $ 42,062 $ 40,535
========= =========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (Unaudited)
INCREASE (DECREASE) IN CASH
(in millions)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-------------------
1995 1994
---- ----
<S> <C> <C>
Cash flows from operating activities
Net cash provided by (used in) continuing operations $ 610 $ (17)
Net cash provided by (used in) discontinued operations (787) 171
------- -------
Net cash provided by (used in) operations (177) 154
------- -------
Cash flows from investing activities
Investment repayments
Fixed maturities 1,097 1,591
Mortgage loans 194 711
Proceeds from sales of investments including real estate held for sale
Fixed maturities 2,990 771
Equity securities 205 169
Mortgage loans 315 160
Real estate held for sale 115 523
Investments in
Fixed maturities (4,036) (2,329)
Equity securities (189) (191)
Mortgage loans (61) (73)
Policy loans, net (320) (203)
Short-term securities, (purchases) sales, net (532) (851)
Other investments, net (61) (25)
Securities transactions in course of settlement 123 549
Net cash flows provided by (used in) investing activities of discontinued operations 962 (147)
------- -------
Net cash provided by investing activities 802 655
------- -------
Cash flows from financing activities
Issuance (redemption) of short-term debt, net (7) 89
Contractholder fund deposits 1,531 1,049
Contractholder fund withdrawals (2,188) (1,967)
Other 1 (3)
Net cash flows provided by financing activities of discontinued operations -- 54
------- -------
Net cash used in financing activities (663) (778)
------- -------
Net increase (decrease) in cash (38) 31
Cash at beginning of period 102 50
------- -------
Cash at end of period $ 64 $ 81
======= =======
Supplemental disclosure of cash flow information
Interest paid $ 2 $ 1
======= =======
Income taxes paid (refunded) $ 48 $ (38)
======= =======
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
June 30, 1995
1. General
The interim financial statements of The Travelers Insurance Company (an
indirect, wholly owned subsidiary of Travelers Group Inc.) and Subsidiaries
(the Company) have been prepared in conformity with generally accepted
accounting principles (GAAP) and are unaudited. They reflect all
adjustments (none of which were other than normal recurring adjustments)
necessary, in the opinion of management, for a fair statement of results
for the periods reported. The accompanying condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and related notes included in the Company's Form 10-K for the
year ended December 31, 1994.
Certain financial information that is normally included in financial
statements prepared in accordance with GAAP but is not required for interim
reporting purposes has been condensed or omitted.
As more fully described in Note 3, all of the operations comprising the
Managed Care and Employee Benefits Operations (MCEBO) segment are presented
as discontinued operations and, accordingly, prior year amounts have been
restated.
In June 1995, Travelers Group Inc. (Travelers) announced that it plans to
make a pro rata distribution to Travelers' common stockholders of shares
of Class A Common Stock, $.01 par value per share, of Transport Holdings
Inc., currently a wholly owned subsidiary of Travelers and which, at the
time of the distribution, will be the indirect owner of the business of
Transport Life Insurance Company. Immediately prior to this distribution,
the Company will dividend Transport Life Insurance Company, an indirect,
wholly owned subsidiary of the Company, to its parent. The distribution
is subject to the satisfaction of various conditions.
2. Changes in Accounting Principles
Effective January 1, 1995, the Company adopted Statement of Financial
Accounting Standards No. 114, "Accounting by Creditors for Impairment of a
Loan", and Statement of Financial Accounting Standards No. 118, "Accounting
by Creditors for Impairment of a Loan - Income Recognition and Disclosures",
which describe how impaired loans should be measured when determining the
amount of a loan loss accrual. These statements amended existing guidance on
the measurement of restructured loans in a troubled debt restructuring
involving a modification of terms. The adoption of these standards did not
have a material impact on the Company's financial condition, results of
operations or liquidity.
6
<PAGE> 7
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
3. Dispositions
Sale of subsidiaries
In December 1994, the Company and its affiliates sold its group dental
insurance business to Metropolitan Life Insurance Company (MetLife) and on
January 3, 1995, the Company and its affiliates sold its group life and
related businesses to MetLife for $350 million, and the Company recognized,
in the first quarter of 1995, an after-tax gain of $20 million ($31 million
pretax).
On January 3, 1995, the Company and MetLife, and certain of their
affiliates, formed The MetraHealth Companies, Inc. (MetraHealth) joint
venture by contributing their medical businesses to MetraHealth, in exchange
for shares of common stock of MetraHealth. The Company's total contribution
amounted to approximately $364 million at carrying value on the date of
contribution. No gain was recognized upon the formation of the joint
venture, at which time the Company owned 42.6% of the outstanding capital
stock of MetraHealth, its parent, the Travelers Insurance Group Inc. (TIG),
owned 7.4%, and the other 50% was owned by MetLife and its affiliates. In
March 1995, MetraHealth acquired HealthSpring, Inc., for common stock of
MetraHealth, resulting in a reduction in the ownership interest of the
Company to 41.10%, TIG to 7.15%, and MetLife to 48.25%.
In connection with the formation of the joint venture, the transfer of the
fee-based medical business (Administrative Services Only) and other
noninsurance business to MetraHealth was completed on January 3, 1995. As
the medical insurance business of the Company comes due for renewal, and
after obtaining regulatory approvals, the risks will be transferred to
MetraHealth. In the interim the related operating results for this medical
insurance business are being reported by the Company.
On June 25, 1995, Travelers agreed to United HealthCare Corporation's
proposed acquisition of MetraHealth. According to the terms, the Company
will receive a total of $708 million in cash, and up to an additional $144
million if a contingency payment based on 1995 results is made.
Discontinued operations
All of the businesses sold to MetLife or contributed to MetraHealth were
included in the Company's MCEBO segment in 1994 and in 1995, the Company's
results reflect the medical insurance business not yet transferred, plus its
equity interest in the earnings of MetraHealth. These operations have been
accounted for as discontinued operations. Revenues from discontinued
operations for the six months ended June 30, 1995 and 1994 amounted to $741
million and $1.7 billion, respectively, and for the three months ended June
30, 1995 and 1994 amounted to $361 million and $860 million, respectively.
The assets and liabilities of the discontinued operations have been
segregated in the Condensed Consolidated Balance Sheet as of June 30, 1995
and December 31, 1994. The assets and liabilities of the discontinued
operations consist primarily of investments, the equity interest in
MetraHealth and insurance-related assets and liabilities.
7
<PAGE> 8
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED), CONTINUED
4. Capital and Debt
The Company issues commercial paper directly to investors and had $68
million and $74 million outstanding at June 30, 1995 and December 31, 1994,
respectively. This is included in other liabilities in the condensed
consolidated balance sheet. The Company maintains unused credit availability
under bank lines of credit at least equal to the amount of the outstanding
commercial paper.
Travelers, Commercial Credit Company (CCC) (an indirect wholly owned
subsidiary of Travelers) and the Company have an agreement with a syndicate
of banks to provide $1.2 billion of revolving credit, to be allocated to any
of Travelers, CCC or the Company. The Company's participation in this
agreement is limited to $250 million. The revolving credit facility consists
of a five-year revolving credit facility which expires in 1999. At June 30,
1995, $160 million was allocated to the Company. Under this facility the
Company is required to maintain certain minimum equity and risk-based
capital levels. At June 30, 1995, the Company was in compliance with these
provisions.
Under Connecticut law the statutory capital and surplus of the Company,
which amounted to $2.1 billion at December 31, 1994, is not available in
1995 for dividends to its parent without prior approval of the Connecticut
Insurance Department. Dividend payments to the Company from its insurance
subsidiaries are subject to similar restrictions and statutory surplus of
the subsidiaries is not available in 1995 for dividends to the Company
without prior approval of insurance regulatory authorities.
5. Commitments and Contingencies
The Company is a defendant or co-defendant in various litigation matters.
Although there can be no assurances, as of June 30, 1995, the Company
believes, based on information currently available, that the ultimate
resolution of these legal proceedings would not be likely to have a material
adverse effect on its results of operations, financial condition or
liquidity.
8
<PAGE> 9
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's narrative analysis of the results of operations is presented in
lieu of Management's Discussion and Analysis of Financial Condition and Results
of Operations, pursuant to General Instruction H(2)(a) of Form 10-Q.
CONSOLIDATED OVERVIEW
<TABLE>
<CAPTION>
For the six months ended June 30, 1995 1994
--------------------------------- ---- ----
(in millions)
<S> <C> <C>
Revenues $1,783 $1,620
====== ======
Income from continuing operations $ 232 $ 181
Income from discontinued operations 59 63
------ ------
Net income $ 291 $ 244
====== ======
</TABLE>
The Travelers Insurance Company and its subsidiaries (the Company) write
principally individual life insurance, annuities, accident and health insurance,
and pension programs. The Company principally operates through one major
business segment, Life and Annuities, which offers individual life, long-term
care, annuities and investment products to individuals and small businesses, and
investment products to employer-sponsored retirement and savings plans. The
Company's Corporate and Other Operations segment manages the investment
portfolio of the Company.
Net income for the first six months of 1995 increased $47 million when compared
to the first six months of 1994. The principal reason for this increase was
higher retained investment margins.
Premiums from continuing operations of $773 million for the six months ended
June 30, 1995 increased $31 million as compared to premiums from continuing
operations of $742 million for the six months ended June 30, 1994, reflecting
an increase in term life insurance premiums.
Pretax realized investment losses from continuing operations were $12 million
for the first six months of 1995 as compared to pretax realized investment gains
from continuing operations of $16 million for the comparable period in 1994.
Other revenues from continuing operations include mortality, surrender and
administrative charges on universal life and investment contracts, net of
related benefits and expenses.
At June 30, 1995, the Company had mortgage loans and real estate investments
(including joint ventures) totaling $4.9 billion compared to $6.6 billion at
June 30, 1994. Underperforming mortgage loans and real estate accounted for $734
million of the total at June 30, 1995, down from $1,670 million at June 30,
1994. Underperforming assets include delinquent mortgage loans, loans in the
process of foreclosure, joint ventures, loans modified at interest rates below
market and real estate held for sale. The Company adopted a strategy to
accelerate the disposition of its mortgage loans and real estate assets in 1993.
The sale of mortgage loans and real estate has enabled the Company to reinvest
and obtain current market yields.
9
<PAGE> 10
DISCONTINUED OPERATIONS
On January 3, 1995, the Company and its affiliates completed the sale of its
group life and related businesses to Metropolitan Life Insurance Company
(MetLife). The Company agreed to cede to MetLife 100% of its risks in the
businesses sold on an indemnity reinsurance basis, effective January 1, 1995.
Also on January 3, 1995, the Company and MetLife, including certain of their
affiliates, each contributed its medical businesses to The MetraHealth
Companies, Inc. (MetraHealth), a newly formed joint venture, in exchange for
common stock of MetraHealth. The Company's total contribution to MetraHealth
amounted to approximately $364 million, at carrying value. In March 1995,
MetraHealth acquired HealthSpring, Inc., for common stock of MetraHealth. The
Company and its affiliates and MetLife and its affiliates are equal partners in
the joint venture.
Substantially all of the businesses sold to MetLife or contributed to
MetraHealth were included in the Company's Managed Care and Employee Benefits
Operations (MCEBO) segment in 1994. MCEBO marketed group life and health
insurance, managed health care programs and administrative services associated
with employee benefit plans.
On June 25, 1995, The Travelers Insurance Group Inc. (TIGI) and the Company,
both wholly owned subsidiaries of Travelers Group Inc. (Travelers), entered into
a definitive agreement with MetLife HealthCare Holdings, Inc. (MHH), a
subsidiary of MetLife, MetraHealth and United HealthCare Corporation (United)
and its acquisition subsidiary for the acquisition by merger of MetraHealth by
United (the Acquisition). The Travelers entities and MHH each own 48.25% of
MetraHealth. The Company owns 41.1% of MetraHealth's stock. According to the
terms of the merger agreement, the Company will receive $708 million of the
initial consideration in cash, and up to an additional $144 million if a
contingent payment based on 1995 results is made. The merger is subject to
customary regulatory approvals, including approvals from a number of state
insurance commissioners.
As discussed in Note 3 of Notes to Condensed Consolidated Financial Statements,
all of the businesses sold to MetLife or contributed to MetraHealth were
included in the Company's MCEBO segment in 1994. In 1995, the Company's results
reflect the medical insurance business not yet transferred, plus its equity
interest in the earnings of MetraHealth. These operations have been accounted
for as discontinued operations.
LIFE AND ANNUITIES
<TABLE>
<CAPTION>
For the six months ended June 30, 1995 1994
--------------------------------- ---- ----
(in millions)
<S> <C> <C>
Revenues $1,774 $1,618
====== ======
Net income $ 231 $ 182
====== ======
</TABLE>
Life and Annuities net income increased 27% to $231 million for the six months
ended June 30, 1995 from $182 million in the 1994 period. Higher retained
investment margins and lower administrative expenses propelled the six month's
earnings growth. Investment margins continue to be helped by the reinvestment of
proceeds from real estate sales and the generally higher level of interest
rates. Primerica Life Insurance Company (Primerica Life) earnings increased over
the comparable 1994 period reflecting continued growth in life insurance in
force as well as improved mortality results compared to the first six months of
1994.
10
<PAGE> 11
Individual annuity production was strong during the first six months of 1995,
compared to the prior period levels, primarily reflecting increased sales of
variable annuities. Sales continue to be aided by the success of the Vintage
annuity product distributed by Smith Barney Financial Consultants, which was
launched in June 1994. Net written premiums and deposits for individual
annuities during the first six months of 1995 totaled $767 million compared to
$617 million in the comparable 1994 period, bringing total policyholder account
balances and benefit reserves to $11.8 billion at June 30, 1995 versus $10.4
billion at June 30, 1994. Annuity sales activity has been helped by the ratings
upgrades that accompanied the merger with Primerica. The most recent upgrade in
April 1995 by A.M. Best, which upgraded The Travelers Insurance Company to an
"A" (excellent) rating, is expected to have a positive impact on Life and
Annuities production. (This rating is not a recommendation to buy, sell or hold
securities, and it may be revised or withdrawn at any time).
In the group annuity business, a management decision not to renew low margin
guaranteed investment contracts (GICs) written in prior years accounted for the
reduction in policyholder account balances and reserves from $12.6 billion at
June 30, 1994 to $11.3 billion at June 30, 1995. Net written premiums and
deposits for the first six months of 1995 were $582 million (excluding
intercompany items) compared to $511 million in last year's period reflecting an
increase in the sale of GICs that are being selectively underwritten in 1995.
During the first six months of 1995, the Life and Annuities operations
(excluding Primerica Life discussed below) issued $3.0 billion of face amount of
individual life insurance, down from $5.0 billion during the first six months of
1994, bringing total life insurance in force to $49.2 billion. The reduction in
face amount issued reflects intense competition in the independent agent segment
of the term insurance market. Individual life insurance net written premiums and
deposits totaled $125 million during the first six months of 1995 compared to
$133 million in the first six months of 1994, reflecting the purchase of
additional reinsurance coverage in 1995.
Net written premiums for individual accident and health products, primarily
long-term care, increased to $162 million for the six months ended June 30,
1995, from $160 million for the six months ended June 30, 1994.
Primerica Life issued $26.9 billion in face amount of new term life insurance
during the first six months of 1995, compared with $27.9 billion in face amount
during the first six months of 1994. Life insurance in force increased to a
record $341.8 billion at June 30, 1995 up from $325.9 billion at June 30, 1994,
and continued to reflect good policy persistency.
CORPORATE AND OTHER OPERATIONS
<TABLE>
<CAPTION>
For the six months ended June 30, 1995 1994
--------------------------------- ---- ----
(in millions)
<S> <C> <C>
Revenues $ 9 $ 2
=== ===
Net income (loss) $ 1 $(1)
=== ===
</TABLE>
11
<PAGE> 12
DISCONTINUED OPERATIONS
<TABLE>
<CAPTION>
For the six months ended June 30, 1995 1994
--------------------------------- ---- ----
(in millions)
<S> <C> <C>
Income from operations of discontinued operations $39 $63
Gain on disposition 20 --
--- ---
Income from discontinued operations $59 $63
=== ===
</TABLE>
In 1995, income from operations of discontinued operations of $39 million
includes the results of the medical insurance business not yet transferred
plus the Company's equity interest in the earnings of MetraHealth. The
after-tax gain on disposition of $20 million represents the gain from the
sale in January 1995 of the group life and related businesses to MetLife.
INSURANCE REGULATIONS
Risk-based capital requirements are used as early warning tools by the National
Association of Insurance Commissioners and the states to identify companies that
merit further regulatory action. At June 30, 1995, the Company and its insurance
subsidiaries had adjusted capital in excess of amounts requiring any regulatory
action.
The Company is subject to various regulatory restrictions that limit the maximum
amount of dividends available to its parent without prior approval of insurance
regulatory authorities in the state of domicile. No statutory surplus is
available in 1995 for dividends to the Company's shareholder without prior
approval of the Connecticut Insurance Department.
Dividend payments to the Company from its insurance subsidiaries are subject to
similar restrictions and statutory surplus of the subsidiaries is not available
in 1995 for dividends to the Company without prior approval of insurance
regulatory authorities.
ACCOUNTING STANDARDS NOT YET ADOPTED
In March 1995, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 121, Accounting for Long-Lived Assets and for
Long-Lived Assets to be Disposed Of (FAS 121). This Statement establishes
accounting standards for the impairment of long-lived assets, certain
identifiable intangibles, and goodwill related to those assets to be held and
used and for long-lived assets and certain identifiable intangibles to be
disposed of. This Statement requires write down to fair value when long-lived
assets to be held and used are impaired. The Statement also requires long-lived
assets to be disposed of (e.g., real estate held for sale) to be carried at the
lower of cost or fair value less cost to sell and does not allow such assets to
be depreciated. This Statement will be effective for 1996 financial statements,
although earlier adoption is permissible. The Company has not yet determined
when it will adopt FAS 121, however the impact is not expected to be material to
its results of operations, financial condition or liquidity.
12
<PAGE> 13
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
<TABLE>
<CAPTION>
Exhibit
No. Description Filing Method
------- ----------- -------------
<S> <C> <C>
2. Agreement and Plan of Merger dated June 25, 1995, by and among United
HealthCare Corporation, Montana Acquisition Inc., The MetraHealth
Companies, Inc., The Travelers Insurance Group Inc., The Travelers
Insurance Company (the Company), MetLife Healthcare Holdings, Inc.
and Metropolitan Life Insurance Company, incorporated by reference to
Exhibit 2 to the Registration Statement on Form S-2, as amended
(File No. 33-58677), of the Company and The Travelers Life and
Annuity Company.
3. Articles of Incorporation and By-laws
a. Charter of the Company, as effective October 19, 1994,
incorporated by reference to Exhibit 3.01 to the
Company's quarterly report on Form 10-Q for the
quarter ended September 30, 1994 (File No. 33-33691)
(the "Company's September 30, 1994 10-Q").
b. By-laws of the Company as effective October 20, 1994,
incorporated by reference to Exhibit 3.02 to the Company's
September 30, 1994 10-Q.
27. Financial Data Schedule Electronic
</TABLE>
(b) Reports on Form 8-K.
On April 21, 1995, the Company filed a Current Report on Form 8-K, dated April
21, 1995, reporting under Item 5 thereof certain pro forma financial information
as of and for the year ended December 31, 1994 related to the previously
reported sale of its group life and related businesses to Metropolitan Life
Insurance Company (MetLife) and the formation of The MetraHealth Companies, Inc.
(MetraHealth).
On June 30, 1995, the Company filed a Current Report on Form 8-K, dated June 25,
1995, reporting under Item 5 thereof certain pro forma financial information as
of and for the three months ended March 31, 1995 and for the year ended December
31, 1994 related to the definitive agreement with MetLife HealthCare Holdings,
Inc. (a subsidiary of MetLife), MetraHealth and United HealthCare Corporation
(United) and its acquisition subsidiary for the acquisition by merger of
MetraHealth by United. This pro forma financial information also reflects the
proposed dividend of Transport Life Insurance Company to the Company's parent
in connection with a proposed distribution to Travelers Group Inc.'s common
stockholders.
13
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE TRAVELERS INSURANCE COMPANY
(Registrant)
Date August 14, 1995 /s/ Jay S. Fishman
-------------------------------------
Jay S. Fishman
Chief Financial Officer
Date August 14, 1995 /s/ Christine B. Mead
-------------------------------------
Christine B. Mead
Vice President - Finance
and Controller
14
<PAGE> 15
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Filing Method
------- ----------- -------------
<S> <C> <C>
2. Agreement and Plan of Merger dated June 25, 1995, by and among United
HealthCare Corporation, Montana Acquisition Inc., The MetraHealth
Companies, Inc., The Travelers Insurance Group Inc., The Travelers
Insurance Company (the Company), MetLife Healthcare Holdings, Inc.
and Metropolitan Life Insurance Company, incorporated by reference to
Exhibit 2 to the Registration Statement on Form S-2, as amended
(File No. 33-58677), of the Company and The Travelers Life and
Annuity Company.
3. Articles of Incorporation and By-laws
a. Charter of the Company, as effective October 19, 1994,
incorporated by reference to Exhibit 3.01 to the
Company's quarterly report on Form 10-Q for the
quarter ended September 30, 1994 (File No. 33-33691)
(the "Company's September 30, 1994 10-Q").
b. By-laws of the Company as effective October 20, 1994,
incorporated by reference to Exhibit 3.02 to the Company's
September 30, 1994 10-Q.
27. Financial Data Schedule Electronic
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE JUNE 30,
1995 FINANCIAL STATEMENTS OF THE TRAVELERS INSURANCE COMPANY AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000733076
<NAME> THE TRAVELERS INSURANCE COMPANY
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 26,618
<CASH> 64
<RECOVER-REINSURE> 2,920
<DEFERRED-ACQUISITION> 0
<TOTAL-ASSETS> 42,062
<POLICY-LOSSES> 11,376
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 20,695
<NOTES-PAYABLE> 0
<COMMON> 100
0
0
<OTHER-SE> 5,581
<TOTAL-LIABILITY-AND-EQUITY> 42,062
773
<INVESTMENT-INCOME> 905
<INVESTMENT-GAINS> (12)
<OTHER-INCOME> 117
<BENEFITS> 601
<UNDERWRITING-AMORTIZATION> 146
<UNDERWRITING-OTHER> 682
<INCOME-PRETAX> 354
<INCOME-TAX> 122
<INCOME-CONTINUING> 232
<DISCONTINUED> 59
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 291
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
