<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Pre-Effective Amendment No. 1
THE TRAVELERS INSURANCE COMPANY
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(Exact name of registrant as specified in its charter)
CONNECTICUT
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(State or other jurisdiction of incorporation or organization)
I.R.S. Employer Identification Number: 06-0566090
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One Tower Square, Hartford, Connecticut 06183 (203) 277-0111
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(Address, including Zip Code, and Telephone Number, including Area Code,
of Registrant's Principal Executive Offices)
Ernest J. Wright
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
(203) 277-4345
----------------------------------------
(Name, Address, including Zip Code, and Telephone Number,
including Area Code of Agent for Service)
Approximate date of commencement of proposed sale to the public: The annuities
covered by this registration statement are to be issued from time to time after
the effective date of this registration statement.
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. X
--------
If the Registrant elects to deliver its latest Annual Report to security-
holders, or a complete and legible facsimile thereof, pursuant to Item 11(a)(1)
of this Form, check the following box. _____
This 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.
<PAGE>
PART I
INFORMATION REQUIRED IN PROSPECTUS
----------------------------------
THE TRAVELERS INSURANCE COMPANY
Cross Reference Sheet Pursuant to Regulation S-K, Item 501(b)
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<TABLE>
<CAPTION>
Item
No. Form S-2 Caption Heading in Prospectus
- ---- ---------------- ---------------------
<C> <S> <C>
1. Forepart of the Registration Outside Front CoverPage of Registration
Statement and Outside Front Statement and Prospectus
Cover Page of Prospectus
2. Inside Front and Outside Back Available Information, Incorporation of
Cover Pages of Prospectus Certain Documents by Reference;
Table of Contents
3. Summary Information, Risk Prospectus Summary; Outside Front
Factors and Ratio of Earnings Cover Page
to Fixed Charges
4. Use of Proceeds Investments by the Company
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Distribution of the Contract
9. Description of Securities Outside Front Cover Page of Prospectus;
to be Registered Description of Contracts
10. Interests of Named Experts Not Applicable
and Counsel
11. Information with Respect to Outside Front Cover Page; Incorporated
the Registrant by Reference to Form 10-K
12. Incorporation of Certain Incorporation of Certain Documents by
Information by Reference Reference
13. Disclosure of Commission Not Applicable
Position on Indemnification
for Securities Act Liabilities
</TABLE>
<PAGE>
THE TRAVELERS INSURANCE COMPANY
ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
TTM
Travelers Target Maturity
MODIFIED GUARANTEED ANNUITY CONTRACT
This Prospectus describes $200 million in participating interests in
individual and group deferred annuity contracts issued by The Travelers
Insurance Company (the "Company"). They are designed to offer retirement
programs to eligible individuals. With respect to the group Contract, eligible
individuals include persons who have established accounts with certain broker-
dealers that have entered into a participation agreement to offer interests in
the Contract, and members of other eligible groups. (See "Distribution of the
Contracts," page 10.) An individual deferred annuity contract is offered in
certain states and through certain trusts. Certain Qualified Plans may also
purchase the Contract. (See Appendix A.)
Participation by an individual in a group Contract will be separately
accounted for by the issuance of a certificate evidencing the individual's
interest under the Contract. Participation in an individual Contract is
evidenced by the issuance of an individual annuity Contract. A group Contract
will be issued under certain circumstances. (See Appendix A.) The certificate,
group and individual annuity Contract are hereafter collectively referred to as
the "Contract."
A minimum single Purchase Payment of at least $5,000 must accompany the
application or purchase order for a Contract. Prior approval by the Company is
necessary for Purchase Payments in excess of $1,000,000. No additional payments
are permitted to be made under a Contract, although eligible individuals may
purchase more than one Contract. (See "Description of the Contracts
- - Application and Purchase Payment," page 3.)
Purchase Payments become part of the general assets of the Company. The
Company intends generally to invest funds received in relation to the Contracts
in fixed income securities, including public and privately placed bonds, and
mortgages. (See "Investments by the Company," page 10).
UPON A SUBSEQUENT GUARANTEE PERIOD, THE GUARANTEED INTEREST RATE WILL BE
DECLARED BY THE COMPANY BASED ON VARIOUS FACTORS. IT MAY BE HIGHER OR LOWER THAN
THE PREVIOUS GUARANTEED INTEREST RATE. (See "Guarantee Periods," page 3 and
"Establishment of Guaranteed Interest Rates," page 5.)
THIS PROSPECTUS IS ACCOMPANIED BY A COPY OF THE COMPANY'S LATEST ANNUAL
REPORT ON FORM 10-K, WHICH CONTAINS ADDITIONAL INFORMATION ABOUT THE COMPANY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
MUTUAL FUNDS, ANNUITIES AND INSURANCE PRODUCTS ARE NOT DEPOSITS OR
OBLIGATIONS OF, OR GUARANTEED BY ANY BANK, NOR ARE THEY 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 __________________.
<PAGE>
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
GLOSSARY OF SPECIAL TERMS...................................... GLOSSARY - 1
PROSPECTUS SUMMARY............................................. SUMMARY - 1
THE INSURANCE COMPANY................................................... 1
AVAILABLE INFORMATION................................................... 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE......................... 1
DESCRIPTION OF THE CONTRACTS............................................ 3
Application and Purchase Payment.................................... 3
Right to Cancel..................................................... 3
ACCUMULATION PERIOD..................................................... 3
Guarantee Periods................................................... 3
ESTABLISHMENT OF GUARANTEED INTEREST RATES.............................. 5
SURRENDERS.............................................................. 5
General............................................................. 5
Surrender Charge.................................................... 5
Market Value Adjustment............................................. 6
Special Surrenders.................................................. 6
Waiver of Surrender Charge.......................................... 6
Reduction or Elimination of Surrender Charges....................... 7
Guarantee Period Exchange Option.................................... 7
Premium Taxes....................................................... 7
DEATH BENEFIT........................................................... 7
PAYMENT UPON FULL OR PARTIAL SURRENDER.................................. 8
ANNUITY PERIOD.......................................................... 8
Election of Annuity Commencement Date and Form of Annuity........... 8
Change of Annuity Commencement Date or Annuity Option............... 8
Annuity Options..................................................... 9
Annuity Payment..................................................... 9
Death of Annuitant After Annuity Commencement Date.................. 10
INVESTMENTS BY THE COMPANY.............................................. 10
AMENDMENT OF THE CONTRACTS.............................................. 10
ASSIGNMENT OF THE CONTRACTS............................................. 10
DISTRIBUTION OF THE CONTRACTS........................................... 10
FEDERAL TAX CONSIDERATIONS.............................................. 11
General............................................................. 11
Section 403(b) Plans and Arrangements............................... 11
Qualified Pension and Profit-Sharing Plans.......................... 11
Individual Retirement Annuities..................................... 12
Section 457 Plans................................................... 12
Nonqualified Annuities.............................................. 13
Federal Income Tax Withholding...................................... 13
Tax Advice.......................................................... 14
LEGAL OPINION........................................................... 15
INDEPENDENT ACCOUNTANTS................................................. 15
APPENDIX A.............................................................. 16
Modified Guaranteed Annuity for Qualified Plans..................... 16
APPENDIX B.............................................................. 17
<PAGE>
GLOSSARY OF SPECIAL TERMS
- --------------------------------------------------------------------------------
In this Prospectus the following terms have the indicated meanings:
ACCOUNT VALUE - The Purchase Payment plus all interest earned, minus all
surrenders, surrender charges and applicable premium taxes previously
deducted.
ANNUITANT - The person upon whose life the Contract is issued.
ANNUITY COMMENCEMENT DATE - The date on which annuity payments are to start. The
date may be designated in the Contract or elected by the Owner.
BENEFICIARY - The person entitled to receive benefits pursuant to the terms of
the Contract in case of the death of the Annuitant or the Owner, or joint
Owner, as applicable.
CASH SURRENDER VALUE - The Cash Value less surrender charges and any applicable
premium tax.
CASH VALUE - The Account Value at the end of a Guarantee Period or the Market
Adjusted Value before the end of a Guarantee Period.
COMPANY (WE, US, OUR) - The Travelers Insurance Company.
CONTINGENT ANNUITANT - The person named prior to the Contract Date by the Owner
who, upon the Annuitant's death (prior to the Annuity Commencement Date)
becomes the Annuitant. All rights and benefits provided by the Contract
then continue to be in effect. Applicable to nonqualified Contracts only.
CONTRACT - For a group Contract, the certificate evidencing a participating
interest in the group annuity Contract. Any reference in this Prospectus to
Contract includes the underlying group annuity Contract. For an individual
Contract, the individual annuity Contract.
CONTRACT DATE - The effective date of participation under the group annuity
Contract as designated in the certificate, or the date of issue of an
individual annuity Contract .
CONTRACT YEAR - A continuous twelve-month period commencing on the Contract Date
and each anniversary thereof.
GUARANTEE PERIOD - The period for which either an initial or subsequent
Guaranteed Interest Rate is credited.
GUARANTEED INTEREST RATE - The annual effective interest rate credited during
the Guarantee Period.
HOME OFFICE - The principal executive offices of The Travelers Insurance Company
located at One Tower Square, Hartford, Connecticut 06183 (Attention:
Annuity Services).
MARKET VALUE ADJUSTMENT - The Market Value Adjustment reflects the relationship,
at the time of surrender, between the then-current Guaranteed Interest Rate
for a Guarantee Period equal to the duration left in your Guarantee Period,
and the Guaranteed Interest Rate that applies to your Contract.
MATURITY VALUE - The accumulated value of a Purchase Payment at the Guaranteed
Interest Rate at the end of the Guarantee Period selected, minus all
surrenders, surrender charges and premium taxes previously deducted.
OWNER (YOU, YOURS) - For an individual Contract, the person or entity to whom
the individual Contract is issued. Joint Owners, who share in ownership
rights and any benefits or payments, may be named in nonqualified
Contracts. For a group Contract, the person or entity to whom the
certificate under a group annuity Contract is issued.
PURCHASE PAYMENT - The premium payment applied to the Contract less premium
taxes if applicable.
- --------------------------------------------------------------------------------
GLOSSARY-1
<PAGE>
PROSPECTUS SUMMARY
- --------------------------------------------------------------------------------
The Travelers Insurance Company (the "Company"), an indirect wholly owned
subsidiary of Travelers Group Inc., is offering individual and group modified
guaranteed annuity contracts to eligible individuals.
Upon application or purchase order, you select an initial Guarantee Period
from those available from the Company. Interest on the Purchase Payment is
credited on a daily basis and this compounding effect is reflected in the
Guaranteed Interest Rate. (See "Accumulation Period--Guarantee Periods," page 3
and "Establishment of Guaranteed Interest Rates," page 5.)
At the end of each Guarantee Period, a subsequent Guarantee Period of one
year will begin unless, within the thirty-day period prior to the end of the
Guarantee Period, you elect a different duration from among those offered by us
at that time.
The Account Value as of the first day of each subsequent Guarantee Period
will earn interest at the subsequent Guaranteed Interest Rate. THE COMPANY WILL
MAKE THE FINAL DETERMINATION AS TO GUARANTEED INTEREST RATES TO BE DECLARED. WE
CANNOT PREDICT NOR CAN WE GUARANTEE FUTURE GUARANTEED INTEREST RATES. (See
"Accumulation Period--Guarantee Periods," page 3 and "Establishment of
Guaranteed Interest Rates," page 5.)
Subject to certain restrictions, full and partial surrenders are permitted.
However, such surrenders may be subject to a surrender charge and/or a Market
Value Adjustment. A full or partial surrender made prior to the end of a
Guarantee Period will be subject to a Market Value Adjustment. Except as
described below, the surrender charge will be deducted from any surrender made
before the end of the seventh Contract Year. The surrender charge will be equal
to seven percent of the amount surrendered in the first Contract Year, and will
be reduced by one percentage point for each of the next six Contract Years. A
REQUEST FOR SURRENDER AT THE END OF A GUARANTEE PERIOD MUST BE RECEIVED IN
WRITING WITHIN 30 DAYS PRECEDING THE END OF THE GUARANTEE PERIOD. A MARKET VALUE
ADJUSTMENT WILL NOT BE APPLIED.
No surrender charge will apply for full or partial surrenders taken: (1) at
the end of an initial Guarantee Period of at least three years, or (2) at the
end of any other Guarantee Period provided the surrender occurs on or after the
fifth Contract Year. We will waive surrender charges in certain instances. (See
"Surrenders--Waiver of Surrender Charge," page 6.) For Section 403(b) or other
qualified plan participants, surrenders may be subject to restrictions. (See
"Federal Tax Considerations," page 11.)
In addition, we will send you any interest that has been credited during
the prior Contract Year if you so request in writing. No surrender charge or
Market Value Adjustment will be imposed on such interest payments; however, all
applicable premium taxes will be deducted. Any such surrender may also be
subject to federal and state taxes. (See "Surrenders," page 5 and "Federal Tax
Considerations," page 11.)
The Market Value Adjustment reflects the relationship between the then
current Guaranteed Interest Rate for the duration remaining in the Guarantee
Period at the time of surrender and the Guaranteed Interest Rate that applies to
your Contract. Generally, the primary factor affecting the amount of the Market
Value Adjustment is the level of interest rates on investments to be made by the
Company at the time that the current Guaranteed Interest Rates are established.
The Market Value Adjustment is sensitive, therefore, to changes in interest
rates. It is possible that the amount you receive upon surrender may be less
than your original Purchase Payment if interest rates increase. It is also
possible that if interest rates decrease, the amount you receive upon surrender
may be more than your original Purchase Payment plus accrued interest.
We may defer payment of any surrender for a period not exceeding six months
from the date of our receipt of your written notice of surrender or the period
permitted by state insurance law, if less, but such a deferral of payment will
be for a period greater than thirty days only under highly unusual
circumstances. Interest of at least 3 1/2% per annum will be paid on any amounts
deferred for more than 30 days if the Company chooses to exercise this deferral
right. (See "Payment Upon Full or Partial Surrender," page 8.)
- --------------------------------------------------------------------------------
SUMMARY-1
<PAGE>
On the Annuity Commencement Date specified by you, the Company will make
either a lump-sum payment or start to pay a series of payments based on the
Annuity Options you select. (See "Annuity Period," page 8.)
The Contract provides for a death benefit. If the Annuitant dies before the
Annuity Commencement Date and there is no designated Contingent Annuitant
surviving, or if the Owner dies before the Annuity Commencement Date with the
Annuitant surviving, the death benefit will be payable to the Beneficiary. For
Contracts that are not tax-qualified, the party receiving distributions upon the
death of the Owner before the Annuity Commencement Date with the Annuitant
surviving may be either the surviving joint Owner or the Beneficiary depending
upon all the circumstances and terms of the Contract. The death benefit is
calculated as of the date we receive written notification of due proof of death
at the Company's Home Office. The death benefit will equal the Account Value.
(See "Death Benefit," page 7.)
On any Contract subject to premium tax, the Company will deduct any
applicable premium taxes from the Cash Value either upon death, surrender,
annuitization, or at the time the Purchase Payment is made to the Contract. (See
"Surrenders--Premium Taxes," page 7.)
Certain changes and elections must be made in writing to the Company. Where
the term "in writing" is used, it means that written information must be sent to
the Company's Home Office in a form and content satisfactory to the Company.
- --------------------------------------------------------------------------------
SUMMARY-2
<PAGE>
THE INSURANCE COMPANY
- --------------------------------------------------------------------------------
The Travelers Insurance Company (the "Company") is a wholly owned
subsidiary of The Travelers Insurance Group Inc., which is indirectly owned,
through a wholly owned subsidiary, by Travelers Group Inc. The Company is a
stock insurance company chartered in 1864 in the State of Connecticut and has
been continuously engaged in the insurance business since that time. The Company
is licensed to conduct a life insurance business in all states of the United
States, the District of Columbia, Puerto Rico, Guam, the U.S. and British Virgin
Islands and the Bahamas. The Company's Home Office is located at One Tower
Square, Hartford, Connecticut 06183.
AVAILABLE INFORMATION
- --------------------------------------------------------------------------------
The Company, subject to the information requirements of the Securities
Exchange Act of 1934 (the "1934 Act"), as amended, and files reports and other
information with the Securities and Exchange Commission (the "Commission"). Such
reports and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. and at the Commission's Regional Offices located at Seven World
Trade Center, New York, New York 10048, and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
can also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
Under the Securities Act of 1933, the Company has filed with the Commission
a registration statement (the "Registration Statement") relating to the
Contracts offered by this Prospectus. This Prospectus has been filed as a part
of the Registration Statement and does not contain all of the information set
forth in the Registration Statement and the exhibits, and reference is hereby
made to such Registration Statement and exhibits for further information
relating to the Company and the Contracts. The Registration Statement and the
exhibits may be inspected and copied as described above. Although the Company
does furnish the Annual Report on Form 10-K for the year ended December 31, 1994
to owners of contracts or certificates, the Company does not plan to furnish
subsequent annual reports containing financial information to the owners of
contracts or certificates described in this Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- --------------------------------------------------------------------------------
The Company's latest Annual Report on Form 10-K and the current reports on
Form 8-K (dated January 3, 1995 and April 21, 1995) and Form 10-Q (dated May 15,
1995) have been filed with the Commission pursuant to Section 15(d) of the 1934
Act. They are incorporated by reference into this Prospectus and copies of the
Form 10-K, Form 8-K dated April 21, 1995 and Form 10-Q dated May 15, 1995 must
accompany this Prospectus.
The Form 10-K for the fiscal year ended December 31, 1994 contains
additional information about the Company, including audited financial statements
for the Company's latest fiscal year. The Forms 8-K report certain significant
events and pro forma financial information concerning the sale of the Company's
group life and related businesses to Metropolitan Life Insurance Company and the
formation of The MetraHealth Companies Inc., the joint venture of the health
care benefits business of the Company and Metropolitan Life Insurance Company.
The Form 10-Q contains unaudited first quarter 1995 information that updates the
financial information reported in Form 10-K.
- --------------------------------------------------------------------------------
1
<PAGE>
If requested, the Company will furnish, without charge, to each person to
whom a copy of this Prospectus is delivered, a copy of the documents referred to
above which have been incorporated by reference in the Prospectus, other than
exhibits to the documents (unless such exhibits are specifically incorporated by
reference in such documents). Any such requests should be directed to The
Travelers Insurance Company, One Tower Square, Hartford, Connecticut 06183-5030,
Attention: Annuity Services. The telephone number is (203) 277-0111.
- --------------------------------------------------------------------------------
2
<PAGE>
- --------------------------------------------------------------------------------
DESCRIPTION OF THE CONTRACTS
- --------------------------------------------------------------------------------
Application and Purchase Payment
To apply for a Contract, you must complete an application form or an order
to purchase. The application must be submitted to the Company's Home Office for
approval. Your Purchase Payment must accompany the application or order to
purchase in order for the Contract to become effective.
The minimum Purchase Payment is $5,000. The Company retains the right to
limit the amount of the maximum Purchase Payment to $1,000,000 without prior
approval.
On the date we receive your Purchase Payment, it becomes part of our
general assets and is credited to an account we establish for you. We then issue
a Contract and confirm the Purchase Payment in writing. You may not contribute
additional Purchase Payments to the Contract in the future. You may, however,
purchase additional Contracts at the then-effective interest rates.
In the event that your application or order to purchase is not properly
completed, we will attempt to contact your agent or broker by telephone. We will
return an improperly completed application, along with the corresponding
Purchase Payment, within ten days after we receive it, if the application or
order to purchase has not been properly completed by that time.
Right to Cancel
State law may afford the right to cancel a Contract for a certain period of
time after receipt of the Contract and may allow a refund of the Purchase
Payment.
ACCUMULATION PERIOD
- --------------------------------------------------------------------------------
Guarantee Periods
Upon application, you will select the duration of the Guarantee Period and
corresponding Guaranteed Interest Rate from among those offered by us. Your
Purchase Payment will earn interest at the Guaranteed Interest Rate during the
entire Guarantee Period. All interest earned will be credited daily; this
compounding effect is reflected in the Guaranteed Interest Rate.
The following example is an illustration of how interest will be credited
to your Account Value during each Guarantee Period. For the purpose of this
example we have made the assumptions indicated.
NOTE: THE FOLLOWING EXAMPLE ASSUMES NO SURRENDERS, DEDUCTIONS FOR PREMIUM
TAXES, OR PRE-AUTHORIZED PAYMENT OF INTEREST DURING THE ENTIRE FIVE-YEAR
PERIOD. A MARKET VALUE ADJUSTMENT OR SURRENDER CHARGE MAY APPLY TO ANY SUCH
INTERIM SURRENDER (SEE "SURRENDERS," PAGE 5). THE HYPOTHETICAL GUARANTEED
INTEREST RATES ARE ILLUSTRATIVE ONLY AND ARE NOT INTENDED TO PREDICT FUTURE
GUARANTEED INTEREST RATES TO BE DECLARED UNDER THE CONTRACT. ACTUAL
GUARANTEED INTEREST RATES DECLARED FOR ANY GIVEN TIME MAY BE MORE OR LESS
THAN THOSE SHOWN.
- --------------------------------------------------------------------------------
3
<PAGE>
Example of Compounding at the Guaranteed Interest Rate
Beginning Account Value: $50,000
Guarantee Period: 5 years
Guarantee Interest Rate: 5.50% per annum
<TABLE>
<CAPTION>
End of Contract Year
- ------------------------------------------------------------------------------------------------------------------------------
Year 1 Year 2 Year 3 Year 4 Year 5
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Beginning Account Value. . . . . . . . . . $50,000.00
X (1 + Guaranteed Interest Rate) . . . . . 1.055
--------
$52,750.00
=========
Account Value at end of Contract Year 1. . $52,750.00
X (1 + Guaranteed Interest Rate) . . . . . 1.055
--------
$55,651.25
=========
Account Value at end of Contract Year 2. . $55,651.25
X (1 + Guaranteed Interest Rate) . . . . . 1.055
--------
$58,712.07
=========
Account Value at end of Contract Year 3. . $58,712.07
X (1 + Guaranteed Interest Rate) . . . . . 1.055
--------
$61,941.23
=========
Account Value at end of Contract Year 4. . $61,941.23
X (1 + Guaranteed Interest Rate) . . . . . 1.055
--------
$65,348.00
---------
Account Value at end of Guarantee Period (i.e. Maturity Value) $65,348.00
=========
Total Interest Credited in Guarantee Period -- $65,348.00 - 50,000.00 = $15,348.00
Account Value at end of Guarantee Period -- $50,000.00 + 15,348.00 = $65,348.00
</TABLE>
At the end of any Guarantee Period, a subsequent Guarantee Period will
begin. The Account Value at the beginning of any subsequent Guarantee Period
will equal the Account Value at the end of the Guarantee Period just ending.
This Account Value will earn interest at the subsequent Guaranteed Interest
Rate. We will notify you in writing about selecting a subsequent Guarantee
Period before maturity. [(In New York, the minimum subsequent interest rate is
3%.)] This written notification will not specify the then-current Guaranteed
Interest Rates. You may elect, during the 30-day period before the end of the
then-current Guarantee Period, a Guarantee Period of a duration available at
that time. The election may be made by notifying us in writing or by telephone.
If no election is made, we will automatically transfer the Account Value
into a one-year Guarantee Period. At any time during that year, you may elect to
transfer from your current automatic one-year Guarantee Period into another
Guarantee Period of a different duration. No Market Value Adjustment, transfer
or surrender charge will be applied. Surrender charges will continue to be based
on time elapsed from the original Contract Date.
In no event may subsequent Guarantee Periods extend beyond the Annuity
Commencement Date then in effect. For example, if you are age 72 upon the
expiration of a Guarantee Period and you have chosen age 75 as an Annuity
Commencement Date, we will provide a three-year Guarantee Period to equal the
number of years remaining before your Annuity Commencement Date. Your Account
Value will then earn interest at a Guaranteed Interest Rate that we have
declared for that duration.
We will notify you of any subsequent Guaranteed Interest Rate applicable to
your Contract. You may also contact us to inquire about subsequent Guaranteed
Interest Rates.
- --------------------------------------------------------------------------------
4
<PAGE>
ESTABLISHMENT OF GUARANTEED INTEREST RATES
- --------------------------------------------------------------------------------
You will know the Guaranteed Interest Rate for the Guarantee Period you
choose at the time you purchase your Contract, and we will send you a
confirmation that will show the amount of your Purchase Payment and the
applicable Guaranteed Interest Rate. After the end of each calendar year, we
will send you a statement that will show (a) your Account Value as of the end of
the preceding year, (b) all transactions regarding your Contract during the
year, (c) your Account Value at the end of the current year, and (d) the
Guaranteed Interest Rate being credited to your Contract.
The Company has no specific formula for determining Guaranteed Interest
Rates in the future. The Guaranteed Interest Rates will be declared from time to
time as market conditions dictate. (See "Investments by the Company," page 10.)
In addition, the Company may also consider various other factors in determining
Guaranteed Interest Rates for a given period, including regulatory and tax
requirements, sales commissions, administrative expenses, general economic
trends and competitive factors.
THE COMPANY WILL MAKE THE FINAL DETERMINATION AS TO GUARANTEED INTEREST
RATES TO BE DECLARED. WE CANNOT PREDICT NOR CAN WE GUARANTEE FUTURE GUARANTEED
INTEREST RATES.
SURRENDERS
- --------------------------------------------------------------------------------
General
The Company will permit full and partial surrenders of the Contract at any
time, subject to surrender charges described below. In the case of all
surrenders, the Cash Value and Maturity Value will be reduced.
Upon request, the Company will inform you of the amount payable upon a full
or partial surrender. Any full, partial or special surrender may be subject to
tax. (See "Federal Tax Considerations," page 11.)
For Participants in Section 403(b) tax-deferred annuity plans, a cash
surrender may not be made from certain amounts prior to the earliest of age 59
1/2, separation from service, death, disability or hardship. (See "Federal Tax
Considerations--Section 403(b) Plans and Arrangements," page 11.)
Surrender Charge
There are no sales charges deducted from a Purchase Payment when it is received.
However, a surrender charge may be assessed on surrenders made before the end of
the seventh Contract Year. The surrender charge is computed as a percentage of
the Cash Value (or portion thereof) being surrendered. The chart below indicates
the percentage charge applied during the specified Contract Year:
<TABLE>
<CAPTION>
Contract Year Charges as a Percentage of
in which Surrender is made Cash Value
-------------------------- --------------------------
<S> <C>
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
Thereafter 0%
</TABLE>
No surrender charge will be made for surrender dates after Contract Year 7
or certain surrenders effective at the end of a Guarantee Period. (See "Special
Surrenders," page 6.)
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5
<PAGE>
Market Value Adjustment
The amount payable on a full or partial surrender made prior to the end of any
Guarantee Period may be adjusted up or down by the application of the Market
Value Adjustment.
The Market Value Adjustment reflects, at the time of surrender, the relationship
between the then-current Guaranteed Interest Rate for a Guarantee Period equal
to the duration left in your Guarantee Period, and the Guaranteed Interest Rate
that applies to your Contract.
Generally, if your Guaranteed Interest Rate is lower than the applicable current
Guaranteed Interest Rate, then the application of the Market Value Adjustment
will result in a lower payment upon surrender. Conversely, if your Guaranteed
Interest Rate is higher than the applicable current Guaranteed Interest Rate,
the application of the Market Value Adjustment will result in a higher payment
upon surrender.
For example, assume you purchase a Contract and select an initial Guarantee
Period of ten years which has a Guaranteed Interest Rate of 8% per annum.
Assume at the end of seven years you make a partial surrender. If the current
three-year Guaranteed Interest Rate is then 6%, the amount payable upon partial
surrender will increase after the application of the Market Value Adjustment.
On the other hand, if the current three-year Guaranteed Interest Rate is higher
than your 8% Guaranteed Interest Rate, for example, 10%, the application of the
Market Value Adjustment will decrease the amount payable to you upon this
partial surrender.
Generally, the primary factor affecting the amount of the Market Value
Adjustment is the level of interest rates on investments made by the Company at
the time that the current Guaranteed Interest Rates are established. The Market
Adjusted Value is sensitive, therefore, to changes in current interest rates.
It is possible that the amount you receive upon surrender would be less than the
original Purchase Payment if interest rates increase. It is also possible that
if interest rates decrease, the amount you receive upon surrender may be more
than the original Purchase Payment plus accrued interest.
The formula for calculating the Market Value Adjustment is set forth in Appendix
B to this Prospectus, which also contains an additional illustration of the
application of the Market Value Adjustment.
Special Surrenders
No surrender charge or Market Value Adjustment will apply for full or partial
surrenders taken: 1) at the end of an Initial Guarantee Period of at least three
years in duration; or 2) at the end of any other Guarantee Period provided the
surrender occurs on or after the fifth Contract Year. However, Guarantee Periods
initiated through the Guaranteed Period Exchange Option will be subject to the
surrender charges based on the original Contract Date. (See "Guarantee Period
Exchange Option," page 7.)
No surrender charges will be assessed upon the application of your Account Value
to elect an annuity option on the Annuity Commencement Date (except if the Fifth
Option is elected within the First Contract Year). A Market Value Adjustment
will be applied if the Annuity Commencement Date is not at the end of a
Guarantee Period. To elect an annuity option, you must notify us at least thirty
days before your Annuity Commencement Date.
In addition, we will send you any interest that has been credited during the
prior Contract Year if you so request in writing. No surrender charge or Market
Value Adjustment will be imposed on such interest payments. Any such surrender
may, however, be subject to federal or state taxes.
Waiver of Surrender Charge
The surrender charge may be waived if:
(a) distributions are applied to any one of the annuity options (except if
the Fifth Option is elected within the first Contract Year);
(b) you become disabled (as defined by the Internal Revenue Code ("Code")
Section 72(m)(7)) subsequent to purchase of the Contract;
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(c) the Owner or Annuitant dies and payment of a death benefit is made to
the Beneficiary;
(d) as a participant under a tax-deferred annuity plan (Section 403(b)
plan), you retire after age 55 and the Contract has been in force for
at least five years, provided that the payment is made directly to the
Owner;
(e) as Owner of an IRA, you reach age 70 1/2, and the Contract has been in
force for at least five years;
(f) as a participant under a qualified pension or profit sharing plan,
including a 401(k) plan, you retire at or after age 59 1/2 and the
Contract has been in force for at least five years, or if refunds are
made under any such plan to satisfy the anti-discrimination test;
(g) as a participant under a Section 457 deferred compensation plan, you
retire and the Contract has been in force for at least five years, or
if a financial hardship or disability withdrawal as defined by the
Code has been allowed by the plan administrator.
Reduction or Elimination of Surrender Charges
The amount of the surrender charge and duration that it may be assessed on
a Contract may be reduced or eliminated when sales of Contracts are made to
persons in certain employee or professional purchase arrangements in such a
manner that results in savings or reductions of sales and distribution expenses.
Any such reduction in the surrender charge will be based on the size and type of
groups to which sales are made (the sales and distribution expenses for a larger
group are generally less than for a smaller group), and any prior or existing
relationship with the Company.
There may be other circumstances, of which the Company is not presently
aware, which could result in reduced sales and distribution expenses. In no
event will reductions or elimination of the surrender charge and its duration be
permitted where such reductions or elimination would be unfairly discriminatory
to any person.
Guarantee Period Exchange Option
Once each Contract Year after the first year, you may elect to transfer
from your current Guarantee Period into a new Guarantee Period of a different
duration and at the then-current Guaranteed Interest Rate. A Market Value
Adjustment will be applied to your current Account Value at the time of
transfer. There will be no surrender charge for this exchange. However,
surrender charges will continue to be based on time elapsed from the original
Contract Date. We reserve the right to charge a fee of up to $50 for such
transfers, but do not impose a transfer charge as of the date of this
Prospectus.
Premium Taxes
Certain state and local governments impose premium taxes. These taxes
currently range from 0.5% to 3 1/2%, depending upon jurisdiction. The
Company, in compliance with any applicable state law, will determine the method
used to recover premium tax expenses incurred. The Company will deduct any
applicable premium taxes from the Cash Value either upon death, surrender,
annuitization, or at the time the Purchase Payment is made to the Contract, but
no earlier than when the Company has a tax liability under state law.
DEATH BENEFIT
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A death benefit is payable to the Beneficiary upon the death of the
Annuitant prior to the Annuity Commencement Date with no contingent Annuitant
surviving. The death benefit will equal the Account Value, and will be
calculated as of the date we receive written notification of due proof of death
at the Company's
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Home Office. A Beneficiary may request that a death benefit payable under the
Contract be applied to one of the annuity options available under the Contract,
subject to the contract provisions.
In addition, for nonqualified contracts, if the Owner dies (including the
first of joint owners) before the Annuity Commencement Date with the Annuitant
surviving, and if a distribution is made as a result of such death, as required
by the Code's minimum distribution rules, the value of the death benefit will be
credited to the individual(s) taking distributions upon death of the Owner. The
individual(s) will generally be the surviving joint owner or the Beneficiary in
accordance with all the circumstances and the terms of the Contract. The
individual(s) may differ from the Beneficiary who was named by the Owner in a
written request and who would receive any remaining contractual benefits upon
the death of the Annuitant. The individual(s) may be paid in a single lump sum,
or by other options, but should take distributions as required by the Code's
minimum distribution rules. If the Owner's spouse is the surviving joint owner
or Beneficiary, the spouse may elect to continue the Contract as owner in lieu
of taking a distribution under the Contract.
PAYMENT UPON FULL OR PARTIAL SURRENDER
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We may defer payment of any surrender for a period not exceeding six months
from the date we receive your notice of surrender or the period permitted by
state insurance law, if less. Only under highly unusual circumstances will we
defer a surrender payment more than thirty days, and if we defer payment for
more than thirty days, we will pay interest of at least 3.5% per annum on the
amount deferred. While all circumstances under which we could defer payment upon
surrender may not be foreseeable at this time, such circumstances could include,
for example, our inability to liquidate assets due to a general financial
crisis.
ANNUITY PERIOD
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Election of Annuity Commencement Date and Form of Annuity
When you apply for or complete a purchase order for a Contract, you may
select an Annuity Commencement Date. If no date is elected, for nonqualified
Contracts, the automatic default age is 95. For qualified Contracts, the
automatic default age is 70 1/2. Within thirty days prior to your Annuity
Commencement Date, you may elect to have all or a portion of your Cash Value
paid in a lump sum on your Annuity Commencement Date. Alternatively, you may
elect, at least thirty days prior to the Annuity Commencement Date, to have your
Cash Value or a portion thereof (less applicable premium taxes, if any)
distributed under any of the Annuity Options described below. In the absence of
such election, for nonqualified Contracts, the Cash Value will be applied on the
Annuity Commencement Date under the Second Option to provide a life annuity with
120 monthly payments certain. For qualified Contracts, the Cash Value will be
applied to the Fourth Option, to provide a Joint and Last Survivor Life Annuity.
This Contract may not be surrendered after the commencement of annuity payments,
except with respect to the Sixth Option.
Change of Annuity Commencement Date or Annuity Option
You may change the Annuity Commencement Date at any time as long as such change
is made in writing and is received by us at least thirty days prior to the
-----
scheduled Annuity Commencement Date. Once an Annuity Option has begun, it may
not be changed.
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Annuity Options
Any one of the following Annuity Options may be elected. Annuity payments
may be available on a monthly, quarterly, semiannual or annual basis. The
minimum amount that may be applied to Annuity Options is $2,000 unless we
consent to a smaller amount.
First Option - Life Annuity: An annuity payable during the lifetime of the
Annuitant, ceasing with the last payment prior to the Annuitant's death. Upon
the death of the Annuitant, no additional annuity payments will be made.
Second Option - Life Annuity with 120, 180 or 240 Monthly Payments Certain:
An annuity providing income to the Annuitant for a guaranteed period of 120
months, 180 months, or 240 months (as selected), and for as long thereafter as
the Annuitant lives.
Third Option - Cash Refund Life Annuity: An annuity payable during the
lifetime of the Annuitant. Upon the death of the Annuitant, the Beneficiary will
receive a payment equal to the Cash Value applied to this option on the Annuity
Commencement Date minus the dollar amount of annuity payments already paid.
Fourth Option - Joint and Last Survivor Life Annuity: An annuity payable
during the lifetimes of the Annuitant and a designated second person, ceasing
with the last payment prior to the death of the survivor. Upon the death of the
last survivor, no additional annuity payments will be made.
Fifth Option - Payments for a Designated Period: An amount payable for the
guaranteed number of years selected which may be from five to thirty years.
Sixth Option - Annuity Proceeds Settlement Option: Proceeds from the Death
Benefit may be left with the Company for a period not to exceed five years from
the date of the Owner's or Annuitant's death prior to the Annuity Commencement
Date. The proceeds will remain in the same Guarantee Period and continue to earn
the same Guaranteed Interest Rate as at the time of death. If the Guarantee
Period ends before the end of the five-year period, the Beneficiary may elect a
new Guarantee Period with a duration not to exceed the time remaining in the
period of five years from the date of the Owner's or Annuitant's death. Full or
partial surrenders may be made at any time. In the event of surrenders, the
remaining Cash Value will equal the proceeds left with the Company, minus any
surrenders and applicable premium tax, plus any interest earned. A Market Value
Adjustment will be applied to all surrenders except those occurring at the end
of a Guarantee Period.
The Tables in the Contract reflect guaranteed dollar amounts of monthly
payments for each $1,000 applied under the first five Annuity Options listed
above. Under the First, Second or Third Options, the amount of each payment will
depend upon the age (and, for nonqualified Contracts, sex) of the Annuitant at
the time the first payment is due. Under the Fourth Option, the amount of each
payment will depend upon the payees' ages at the time the first payment is due
(and, for nonqualified Contracts, the sex of both payees).
The Tables for the First, Second, Third and Fourth Options are based on the
1983 Individual Annuitant Mortality Table A with ages set back one year and a
net investment rate of 3% per annum. The table for the Fifth Option is based on
a net investment rate of 3% per annum. If mortality appears more favorable and
interest rates so justify, at our discretion, we may apply other tables which
will result in higher payments for each $1,000 applied under one or more of the
first five Annuity Options.
Annuity Payment
The first payment under any Annuity Option will be made on the Annuity
Commencement Date. Subsequent payments will be made in accordance with the
manner of payment selected and are based on the first payment date.
The option elected must result in a payment at least equal to the minimum
payment amount according to Company rules then in effect. If at any time
payments are less than the minimum payment amount, the Company has the right to
change the frequency to an interval resulting in a payment at least equal to the
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minimum. If any amount due is less than the minimum per year, the Company may
make other arrangements that are equitable to the Annuitant.
Once annuity payments have commenced, no surrender of the annuity benefit
(including benefits under the Fifth Option) can be made for the purpose of
receiving a lump-sum settlement.
Death of Annuitant After Annuity Commencement Date
In the event of the Annuitant's death after the Annuity Commencement Date,
any amount payable as a death benefit will be distributed at least as rapidly as
under the method of distribution in effect.
INVESTMENTS BY THE COMPANY
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Assets of the Company must be invested in accordance with the requirements
established by applicable state laws regarding the nature and quality of
investments that may be made by life insurance companies and the percentage of
their assets that may be committed to any particular type of investment. In
general, these laws permit investments, within specified limits and subject to
certain qualifications, in federal, state and municipal obligations, corporate
bonds, preferred and common stocks, real estate mortgages, real estate and
certain other investments. All claims by purchasers of the Contracts, and other
general account products, will be funded by the Company's general account.
In establishing Guaranteed Interest Rates, the Company will consider the
yields on fixed income securities that are part of the Company's current
investment strategy for the Contracts at the time that the Guaranteed Interest
Rates are established. (See "Establishment of Guaranteed Interest Rates," page
5.) The current investment strategy for the Contracts is to invest in fixed
income securities, including public bonds, privately placed bonds, and
mortgages, some of which may be zero coupon securities. While the foregoing
generally describes our investment strategy, we are not obligated to follow any
particular strategy except as may be required by federal and state laws.
AMENDMENT OF THE CONTRACTS
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We reserve the right to amend the Contracts to comply with applicable
federal or state laws or regulations. We will notify you in writing of any such
amendments.
ASSIGNMENT OF THE CONTRACTS
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Your rights as evidenced by a Contract may be assigned as permitted by
applicable law. An assignment will not be binding upon us until we receive
notice from you in writing. We assume no responsibility for the validity or
effect of any assignment. You should consult your tax adviser regarding the tax
consequences of an assignment.
DISTRIBUTION OF THE CONTRACTS
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Travelers Equities Sales, Inc. ("TESI") is the principal underwriter of the
Contracts. TESI is registered with the Securities and Exchange Commission under
the 1934 Act as a broker-dealer, and is a member of the National Association of
Securities Dealers, Inc. TESI is a wholly owned subsidiary of the Company.
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<PAGE>
TESI may enter into distribution agreements with certain broker-dealers
registered under the 1934 Act. Under the distribution agreements such broker-
dealers may offer Contracts to persons who have established an account with the
broker-dealer. In addition, the Company may offer certificates to members of
certain other eligible groups. The Company will pay a maximum commission of 5%
of the Purchase Payment for the sale of a Contract.
From time to time, the Company may offer customers of certain broker-
dealers special Guaranteed Interest Rates and negotiated commissions. In
addition, the Company may offer Contracts to members of certain other eligible
groups through trusts or otherwise.
FEDERAL TAX CONSIDERATIONS
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General
The Company is taxed as a life insurance company under Subchapter L of the
Code. Generally, amounts credited to a contract are not taxable until received
by the Contract Owner, participant or beneficiary, either in the form of annuity
payments or other distributions. Tax consequences and limits are described
further below for each annuity program.
Section 403(b) Plans and Arrangements
Purchase Payments for a tax deferred annuity contract may be made by an
employer for employees under annuity plans adopted by public educational
organizations and certain organizations which are tax exempt under Section
501(c)(3) of the Code. Within statutory limits, such payments are not currently
includable in the gross income of the participants. Increases in the value of
the contract attributable to these Purchase Payments are similarly not subject
to current taxation. The income in the contract is taxable as ordinary income
whenever distributed.
An additional tax of 10% will apply to any taxable distribution received by
the participant before the age of 59 1/2, except when due to death, disability,
or as part of a series of payments for life or life expectancy, or made after
the age of 55 with separation from service. There are other statutory
exceptions.
Amounts attributable to salary reductions and income thereon may not be
withdrawn prior to attaining the age of 59 1/2, separation from service, death,
total and permanent disability, or in the case of hardship as defined by federal
tax law and regulations. Hardship withdrawals are available only to the extent
of the salary reduction contributions and not from the income attributable to
such contributions. These restrictions do not apply to assets held generally as
of December 31, 1988.
Distributions must begin by April 1st of the calendar year following the
calendar year in which the participant attains the age of 70 1/2. Certain other
mandatory distribution rules apply at the death of the participant. Certain
rollover distributions, including most partial or full redemptions or "term-for-
years" distributions of less than 10 years, are eligible for direct rollover to
another 403(b) contract or to an Individual Retirement Arrangement (IRA) without
federal income tax withholding.
Qualified Pension and Profit-Sharing Plans
Under a qualified pension or profit-sharing trust described in Section
401(a) of the Code and exempt from tax under Section 501(a) of the Code, a
Purchase Payment made by an employer is not currently taxable to the participant
and increases in the value of a contract are not subject to taxation until
received by a participant or beneficiary.
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Distributions in the form of annuity payments are taxable to the
participant or beneficiary as ordinary income in the year of receipt. Any
distribution that is considered the participant's "investment in the contract"
is treated as a return of capital and is not taxable. Certain lump-sum
distributions described in Section 402 of the Code may be eligible for special
ten-year forward averaging treatment for individuals born before January 1,
1936. All individuals may be eligible for favorable five-year forward averaging
of lump-sum distributions after age 59 1/2. Certain eligible rollover
distributions including most partial and full surrenders or term-for-years
distributions of less than 10 years are eligible for direct rollover to an
eligible retirement plan or to an IRA without federal income tax withholding.
An additional tax of 10% will apply to any taxable distribution received by
the participant before the age of 59 1/2, except by reason of death, disability
or as part of a series of payments for life or life expectancy, or at early
retirement at or after the age of 55. There are other statutory exceptions.
Individual Retirement Annuities
To the extent of earned income for the year and not exceeding $2,000 per
individual, an individual may make deductible contributions to an individual
retirement annuity (IRA). (Note: The minimum Purchase Payment allowed for this
Contract is $5,000.) There are certain limits on the deductible amount based on
the adjusted gross income of the individual and spouse based on their
participation in a retirement plan. If an individual is married and the spouse
is not employed, the individual may establish IRAs for the individual and
spouse. Purchase Payments may then be made annual into IRAs for both spouses in
the maximum amount of 100% of earned income up to a combined limit of $2,250.
Partial or full distributions made prior to the age of 59 1/2 are treated
as ordinary income. Amounts contributed after 1986 on a non-deductible basis are
not includable in income when distributed. Distributions must commence by April
1st of the calendar year after the close of the calendar year in which the
individual attains the age of 70 1/2. The individual must maintain personal and
tax return records of any non-deductible contributions and distributions.
Section 407(k) of the Code provides for the purchase of a Simplified
Employee Pension (SEP) plan. A SEP is funded through an IRA with an annual
employer contribution limit of 15% of compensation up to $30,000 for each
participant.
Section 457 Plans
Section 457 of the Code allows employees and independent contractors of
state and local governments and tax-exempt organizations to defer a portion of
their salaries or compensation to retirement years without paying current income
tax on either the deferrals or the earnings on the deferrals.
The Owner of contracts issued under Section 457 plans is the employer or a
contractor of the participant and amounts may not be made available to
participants (or beneficiaries) until separation from service, retirement or
death or an unforeseeable emergency as determined by Treasury Regulations. The
proceeds of annuity contracts purchased by Section 457 plans are subject to the
claims of general creditors of the employer or contractor.
Distributions must begin generally by April 1st of the calendar year
following the calendar year in which the participant attains the age of 70 1/2.
Certain other mandatory distribution rules apply upon the death of the
participant.
All distributions from plans that meet the requirements of Section 457 of
the Code are taxable as ordinary income in the year paid or made available to
the participant or beneficiary.
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Nonqualified Annuities
Individuals may purchase tax-deferred annuities without tax law funding
limits. The Purchase Payment receive no tax benefit, deduction or deferral, but
increases in the value of the Contract are generally deferred from tax until
distribution. If a nonqualified annuity is owned by other than an individual,
however, (e.g., by a corporation), the increases in value attributable to
Purchase Payments made after February 28, 1986 are includable in income
annually. Furthermore, for Contracts issued after April 22, 1987, all deferred
increases in value will be includable in income annually. Furthermore, for
Contracts issued after April 22, 1987, all deferred increases in value will be
includable in the income of an Owner when that Owner transfers the Contract
without adequate considerations.
The federal tax law requires nonqualified annuity contracts issued on or
after January 19, 1985 to meet minimum mandatory distribution requirements upon
the death of the Contract Owner. Failure to meet these requirements will cause
the succeeding Contract Owner or beneficiary to lose the tax benefits associated
with annuity contracts, i.e., primarily the tax deferral prior to distribution.
The distribution required depends upon whether an Annuity Option is elected or
whether the succeeding Owner is the surviving spouse. Contracts will be
administered by The Company in accordance with these rules.
If two or more nonqualified annuity contracts are purchased from the same
insurer within the same calendar year, distributions from any of them will be
taxed based upon the amount of income in all of the same calendar year series of
annuities. This will generally have the effect of causing taxes to be paid
sooner on the deferred gain in the contracts.
Those receiving partial distributions made before annuitization of a
contract will generally be taxed on an income-first basis to the extent of
income in the contract. Certain pre-August 14, 1982 deposits into a nonqualified
annuity contract that have been placed in the contract by means of a tax-
deferred exchange under Section 1035 of the Code may be withdrawn first without
income tax liability. This information on deposits must be provided to the
Company by the other insurance company at the time of the exchange. There is
income in the contract generally to the extent the Cash Value exceeds the
investment in the contract. The investment in the contract is equal to the
amount of premiums paid less any amount received previously which was excludable
from gross income. Any direct or indirect borrowing against the value of the
contract or pledging of the contract as security for a loan will be treated as a
cash withdrawal under the tax law.
With certain exceptions, the law will impose an additional tax if a
Contract Owner makes a withdrawal of any amount under the contract which is
allocable to an investment made after August 13, 1982. The amount of the
additional tax will be 10% of the amount includable in income by the Contract
Owner because of the withdrawal. The additional tax will not be imposed if the
amount is received on or after the Contract Owner reaches the age of 59 1/2, of
if the amount is one of a series of substantially equal periodic payments made
for life or life expectancy of the taxpayer. The additional tax will not be
imposed if the withdrawal or partial surrender follows the death or disability
of the Contract Owner .
Federal Income Tax Withholding
The portion of a distribution which is taxable income to the recipient will
be subject to federal income tax withholding, generally pursuant to Section 3405
of the Code. The application of this provision is summarized below.
1. Eligible Rollover Distribution From Section 403(b) Plans or Arrangements
or From Qualified Pension and Profit-Sharing Plans
There is an unwaivable 20% tax withholding for plan distributions that
are eligible for rollover to an IRA or to another retirement plan but
that are not directly rolled over. A distribution made directly to a
participant or beneficiary may avoid this result if:
(a) a periodic settlement distribution is elected based upon a life
or life expectancy calculation, or
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(b) a complete term-for-years settlement distribution is elected
for a period of ten years or more, payable at least annually, or
(c) a minimum required distribution as defined under the tax law is
taken after the attainment of the age of 70 1/2 or as otherwise
required by law.
A distribution including a rollover that is not a direct rollover will
require the 20% withholding, and a 10% additional tax penalty may apply
to any amount not added back in the rollover. The 20% withholding may be
recovered when the participant or beneficiary files a personal income
tax return for the year if a rollover was completed within 60 days of
receipt of the funds, except to the extent that the participant or
spousal beneficiary is otherwise underwithheld or short on estimated
taxes for that year.
2. Other Non-Periodic Distributions (full or partial redemptions)
To the extent not described as requiring 20% withholding in 1 above, the
portion of a non-periodic distribution which constitutes taxable income
will be subject to federal income tax withholding, to the extent such
aggregate distributions exceed $200 for the year, unless the recipient
elects not to have taxes withheld. If an election out is not provided,
10% of the taxable distribution will be withheld as federal income tax.
Election forms will be provided at the time distributions are requested.
This form of withholding applies to all annuity programs.
3. Periodic Distributions (distributions payable over a period greater
than one year)
The portion of a periodic distribution which constitutes taxable income
will be subject to federal income tax withholding under the wage
withholding tables as if the recipient were married claiming three
exemptions. A recipient may elect not to have income taxes withheld or
have income taxes withheld at a different rate by providing a completed
election form. Election forms will be provided at the time distributions
are requested. This form of withholding applies to all annuity programs.
As of January 1, 1994, a recipient receiving periodic payments (e.g.,
monthly or annual payments under an Annuity Option) which total $13,700
or less per year, will generally be exempt from the withholding
requirements.
Recipients who elect not to have withholding made are liable for payment of
federal income tax on the taxable portion of the distribution. All recipients
may also be subject to penalties under the estimated tax payment rules if
withholding and estimated tax payments are not sufficient.
Recipients who do not provide a social security number or other taxpayer
identification number will not be permitted to elect out of withholding.
Additionally, United States citizens residing outside of the country, or U.S.
legal residents temporarily residing outside the country, are not permitted to
elect out of withholding.
Tax Advice
Because of the complexity of the law and the fact that the tax results will
vary according to the factual status of the individual involved, tax advice may
be needed by a person contemplating purchase of an annuity contract and by an
Owner, participant or beneficiary who may make elections under a contract. It
should be understood that the foregoing description of the federal income tax
consequences under these contracts is not exhaustive and that special rules are
provided with respect to situations not discussed here. It should be understood
that if a tax-benefited plan loses its exempt status, employees could lose some
of the tax benefits described. For further information, a qualified tax adviser
should be consulted.
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PROSPECTUS
PART II
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INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------
Item 14. Other Expenses of Issuance and Distribution
-------------------------------------------
Registration Fees: $68,965.58 for $200,000,000 in interests of Modified
Guaranteed Annuity Contracts
Estimate of Printing Costs: $15,000
Cost of Independent Auditors: $ 4,000
Item 15. Indemnification of Directors and Officers
-----------------------------------------
Section 33-320a of the Connecticut General Statutes ("C.G.S.") regarding
indemnification of directors and officers of Connecticut corporations provides
in general that Connecticut corporations shall indemnify their officers,
directors and certain other defined individuals against judgments, fines,
penalties, amounts paid in settlement and reasonable expenses actually incurred
in connection with proceedings against the corporation. The corporation's
obligation to provide such indemnification generally does not apply unless (1)
the individual is successful on the merits in the defense of any such
proceeding; or (2) a determination is made (by persons specified in the statute)
that the individual acted in good faith and in the best interests of the
corporation; or (3) the court, upon application by the individual, determines in
view of all of the circumstances that such person is fairly and reasonably
entitled to be indemnified, and then for such amount as the court shall
determine. With respect to proceedings brought by or in the right of the
corporation, the statute provides that the corporation shall indemnify its
officers, directors and certain other defined individuals, against reasonable
expenses actually incurred by them in connection with such proceedings, subject
to certain limitations.
C.G.S. Section 33-320a provides an exclusive remedy; a Connecticut corporation
cannot indemnify a director or officer to an extent either greater or less than
that authorized by the statute, e.g., pursuant to its certificate of
incorporation, by-laws, or any separate contractual arrangement. However, the
statute does specifically authorize a corporation to procure indemnification
insurance to provide greater indemnification rights. The premiums for such
insurance may be shared with the insured individuals on an agreed basis.
Travelers Group Inc. also provides liability insurance for its directors and
officers and the directors and officers of its subsidiaries, including the
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>
Item 16. Exhibits
--------
(a) Exhibits
1. Form of Underwriting Agreement.
3(a). Charter of The Travelers Insurance Company, as amended on October
19, 1994. (Incorporated herein by reference to Exhibit 3(a)(i) to
the Registration Statement on Form S-2, File No. 33-58677 filed via
Edgar on April 18, 1995.)
3(b). By-Laws of The Travelers Insurance Company, as amended on
October 20, 1994. (Incorporated herein by reference to Exhibit
3(b)(i) to the Registration Statement on Form S-2, File No.
33-58677 filed via Edgar on April 18, 1995.)
4. Contracts.
5. Opinion Re: Legality, Including Consent. (Incorporated herein by
reference to Exhibit 5 to the Registration Statement on Form S-2,
File No. 33-89812 filed on February 27, 1995.)
10. Material Contracts.
a. Restated Second Amended General Agency Agreement (SAGAA) dated as
of November 1, 1989 by and among Primerica Life Insurance Company
(formerly Massachusetts Indemnity Life Insurance Company;
hereinafter "Primerica Life"), A.L. Williams & Associates, Inc.
and Arthur L. Williams, Jr., incorporated by reference to Exhibit
10.15 to the Annual Report on Form 10-K of The Travelers Inc.
(formerly Primerica Corporation) for the fiscal year ended
December 31, 1990 (File No. 1-9924) (the "Primerica 1990 10-K")
b. Restated First Amendment to SAGAA dated as of November 1, 1989,
by and among Primerica Life, A.L. Williams & Associates, Inc. and
Arthur L. Williams, Jr., incorporated by reference to Exhibit
10.16 to the Primerica 1990 10-K.
c. Master Agreement, dated as of September 1, 1994, between the
Company and Metropolitan Life Insurance Company ("MetLife"),
incorporated by reference to Exhibit 10.03 to Form 10-Q for the
quarter ended September 30, 1994, File No. 33-33691, filed on
November 14, 1994.
d. Group Life Insurance and Related Businesses Acquisition
Agreement, dated as of September 1, 1994, among MetLife, the
Company, The Travelers Indemnity Company of Rhode Island and The
Travelers Insurance Company of Illinois, incorporated by
reference to Exhibit 10.04 to Form 10-Q for the quarter ended
September 30, 1994, File No. 33-33691, filed on November 14,
1994.
23(a). Consent of Coopers & Lybrand L.L.P., Independent Accountants, to
the reference in the Prospectus to such firm as "experts" in
accounting and auditing and to the incorporation of their reports on
The Travelers Insurance Company financial statements.
<PAGE>
23(b). Consent of KPMG Peat Marwick LLP, Independent Certified Public
Accountants, to the reference in the Prospectus to such firm as
"experts" in accounting and auditing and to the incorporation of
their reports on The Travelers Insurance Company financial
statements.
23(c). Consent of Counsel (see Exhibit 5).
24. Powers of Attorney authorizing Jay S. Fishman or Ernest J. Wright as
signatory for Robert I. Lipp, Charles O. Prince, III, Marc P. Weill,
Irwin R. Ettinger, Michael A. Carpenter, Donald T. DeCarlo and
Christine B. Mead.
27. Financial Data Schedule. (Incorporated herein by reference to
Exhibit 27 to Form 10-K for the year ended December 31, 1994, File
No. 33-33691, filed on March 31, 1995.)
Item 17. Undertakings
------------
The undersigned registrant hereby undertakes as follows, pursuant to Item 512 of
Regulation S-K:
(a) Rule 415 offerings:
1. To file, during any period in which offers or sales of the registered
securities are being made, a post-effective amendment to this
registration statement:
a. to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
b. to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement; and
c. to include any material information with respect to the plan of
distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement.
2. That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at the time shall be deemed to be
the initial bona fide offering thereof.
3. To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(h) Requests for Acceleration of Effective Date:
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the provisions described under Item 14 above 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
<PAGE>
successful defense of any action, suit or proceeding) is asserted against
the registrant 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>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this pre-effective
amendment to this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Hartford, State of
Connecticut, on June 2, 1995.
THE TRAVELERS INSURANCE COMPANY
(Registrant)
By: /s/Jay S. Fishman
-----------------
Jay S. Fishman
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this pre-effective
amendment to this registration statement has been signed by the following
persons in the capacities indicated on June 2, 1995.
*ROBERT I. LIPP Director and Chairman of the Board
- ---------------
(Robert I. Lipp)
/s/JAY S. FISHMAN Director and Chief Financial Officer
- -----------------
(Jay S. Fishman)
*CHARLES O. PRINCE, III Director
- -----------------------
(Charles O. Prince, III)
*MARC P. WEILL Director
- --------------
(Marc P. Weill)
*IRWIN R. ETTINGER Director
- ------------------
(Irwin R. Ettinger)
*MICHAEL A. CARPENTER Director, President and Chief Executive
- --------------------- Officer
(Michael A. Carpenter)
*DONALD T. DeCARLO Director
- ------------------
(Donald T. DeCarlo)
/s/CHRISTINE B. MEAD Vice President - Finance
- -------------------- and Controller
(Christine B. Mead)
*By: /s/Jay S. Fishman
-----------------
Jay S. Fishman, Attorney-in-Fact
<PAGE>
EXHIBIT INDEX
-------------
Exhibit
No. Description Method of Filing
- -------- ----------- ----------------
1. Form of Underwriting Agreement. Electronically
3(a). Charter of The Travelers Insurance Company, as
amended on October 19, 1994. (Incorporated
herein by reference to Exhibit 3(a)(i) to the
Registration Statement on Form S-2, File
No. 33-58677 filed via Edgar on April 18, 1995.)
3(b). By-Laws of The Travelers Insurance Company, as
amended on October 20, 1994. (Incorporated
herein by reference to Exhibit 3(a)(i) to the
Registration Statement on Form S-2, File
No. 33-58677 filed via Edgar on April 18, 1995.)
4. Contracts. Electronically
5. Opinion Re: Legality, Including Consent.
(Incorporated herein by reference to Exhibit 5 to
the Registration Statement on Form S-2, File
No. 33-89812 filed on February 27, 1995.)
10. Material Contracts.
a. Restated Second Amended General Agency
Agreement (SAGAA) dated as of November 1,
1989 by and among Primerica Life Insurance
Company (formerly Massachusetts Indemnity Life
Insurance Company; hereinafter "Primerica Life"),
A.L. Williams & Associates, Inc. and Arthur L.
Williams, Jr., incorporated by reference to
Exhibit 10.15 to the Annual Report on Form 10-K
of The Travelers Inc. (formerly Primerica Corporation)
for the fiscal year ended December 31, 1990
(File No. 1-9924) (the "Primerica 1990 10-K")
b. Restated First Amendment to SAGAA dated as of
November 1, 1989, by and among Primerica Life,
A.L. Williams & Associates, Inc. and Arthur L.
Williams, Jr., incorporated by reference to
Exhibit 10.16 to the Primerica 1990 10-K.
c. Master Agreement, dated as of September 1, 1994,
between the Company and Metropolitan Life Insurance
Company ("MetLife"), incorporated by reference to
Exhibit 10.03 to Form 10-Q for the quarter ended
September 30, 1994, File No. 33-33691, filed on
November 14, 1994.
d. Group Life Insurance and Related Businesses
Acquisition Agreement, dated as of September 1,
1994, among MetLife, the Company, The Travelers
Indemnity Company of Rhode Island and The
Travelers Insurance Company of Illinois,
incorporated by reference to Exhibit 10.04 to
Form 10-Q for the quarter ended September 30,
1994, File No. 33-33691, filed on November 14,
1994.
23(a). Consent of Coopers & Lybrand L.L.P., Electronically
Independent Accountants, to the reference in
the Prospectus to such firm as "experts" in
accounting and auditing and to the incorporation
of their reports on The Travelers Insurance
Company financial statements.
23(b). Consent of KPMG Peat Marwick LLP, Electronically
Independent Auditors, to the reference in the
Prospectus to such firm as "experts" in
accounting and auditing and to the incorporation
of their reports on The Travelers Insurance
Company financial statements.
23(c). Consent of Counsel (see Exhibit 5).
24. Powers of Attorney authorizing Jay S. Fishman or Electronically
Ernest J. Wright as signatory for Robert I. Lipp,
Charles O. Prince, III, Marc P. Weill, Irwin R.
Ettinger, Michael A. Carpenter, Donald T. DeCarlo
and Christine B. Mead.
27. Financial Data Schedule. (Incorporated herein by
reference to Exhibit 27 to Form 10-K for the year
ended December 31, 1994, File No. 33-33691,
filed on March 31, 1995.)
<PAGE>
Exhibit 1
FORM OF
PRINCIPAL UNDERWRITING AGREEMENT
PRINCIPAL UNDERWRITING AGREEMENT (the "Agreement") made this ____ day of
_________, 1995, by and among The Travelers Insurance Company, a Connecticut
stock insurance company (hereinafter the "Company"), Travelers Equities Sales,
Inc., a Connecticut general business corporation (hereinafter "TESI"), and The
Travelers Separate Account MGA (hereinafter "Separate Account MGA"), a separate
account of the Company established on March 31, 1986 by its Chairman of the
Board in accordance with a resolution adopted by the Company's Board of
Directors and pursuant to Section 38a-433 of the Connecticut General Statutes.
1. The Company hereby agrees to provide all administrative services
relative to modified guaranteed annuity contracts and revisions thereof
(hereinafter "Contracts") sold by the Company, the net proceeds of which or
reserves for which are maintained in Separate Account MGA.
2. TESI hereby agrees to perform all sales functions relative to the
Contracts. The Company agrees to reimburse TESI for commissions paid, other
sales expenses and properly allocable overhead expenses incurred in performance
thereof.
3. For providing the administrative services referred to in paragraph 1
above and for reimbursing TESI for the sales functions referred to in paragraph
2 above, the Company will receive the deductions for sales and administrative
expenses which are stated in the Contracts.
4. The Company will furnish at its own expense and without cost to
Separate Account MGA the administrative expenses of Separate Account MGA,
including but not limited to:
(a) office space in the offices of the Company or in such other place as
may be agreed upon from time to time, and all necessary office
facilities and equipment;
(b) necessary personnel for managing the affairs of Separate Account MGA,
including clerical, bookkeeping, accounting and other office personnel;
(c) all information and services, including legal services, required in
connection with registering and qualifying Separate Account MGA or the
Contracts with federal and state regulatory authorities, preparation of
registration statements and prospectuses, including amendments and
revisions thereto, and any other reports required to be furnished to
Contract Owners, including the costs of printing and mailing such
items;
(d) the costs of preparing, printing, and mailing all sales literature;
(e) all registration, filing and other fees in connection with compliance
requirements of federal and state regulatory authorities;
<PAGE>
Exhibit 1
(f) the charges and expenses of independent accountants retained by
Separate Account MGA, if applicable.
5. The services of the Company and TESI to Separate Account MGA hereunder
are not to be deemed exclusive and the Company or TESI shall be free to render
similar services to others so long as its services hereunder are not impaired or
interfered with thereby.
6. This Agreement will be effective on the date executed, and will remain
effective until terminated by any party upon sixty (60) days notice; provided,
however, that this Agreement will terminate automatically in the event of its
assignment by any of the parties hereto.
7. Notwithstanding termination of this Agreement, the Company shall
continue to provide administrative services and mortality and expense guarantees
provided for herein with respect to Contracts in effect on the date of
termination, and the Company shall continue to receive the compensation provided
under this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed by their respective officials thereunto duly authorized and, in the case
of the Company and TESI, seals to be affixed as of the day and year first above
written.
THE TRAVELERS INSURANCE COMPANY
(Seal)
By:___________________________________________
Title:________________________________________
ATTEST:
__________________________
Assistant Secretary
THE TRAVELERS SEPARATE ACCOUNT MGA
By:___________________________________________
Title:________________________________________
WITNESS:
__________________________
TRAVELERS EQUITIES SALES, INC.
By: ___________________________________________
Title: ________________________________________
ATTEST: (SEAL)
__________________________
Corporate Secretary
<PAGE>
[LOGO OF THE TRAVELERS INSURANCE COMPANY APPEARS HERE]
Exhibit 4
THE TRAVELERS INSURANCE COMPANY . One Tower Square . Hartford, Connecticut 06183
A Stock Company
We are pleased to provide You the benefits of this annuity contract. Please read
all attached forms carefully.
This contract is subject to the terms and conditions stated on the attached
pages, all of which are a part of it. The Certificates are issued in
consideration of the purchase payment.
Executed at Hartford, Connecticut
/s/ Robert I. Lipp
Chairman
This is a legal contract between You and Us. PLEASE READ YOUR
CONTRACT CAREFULLY.
Single Premium Group Modified Guaranteed Annuity Contract
Non-Tax Qualified
Elective Options Non-Participating
THE CASH SURRENDER VALUE MAY INCREASE OR DECREASE IN ACCORDANCE WITH THE
MARKET VALUE ADJUSTMENT FORMULA ON THE CONTRACT SPECIFICATIONS PAGE. THE CASH
SURRENDER VALUE IS AVAILABLE WITHOUT APPLICATION OF THE MARKET VALUE
ADJUSTMENT AT THE END OF A GUARANTEE PERIOD.
<PAGE>
TABLE OF CONTENTS
-----------------
Contract Specifications Page 3
Definitions Page 5
Purchase Payment Page 6
Contract Control Provisions Page 6
Crediting of Interest and Guarantee Periods Page 8
Market Value Adjustment Page 9
Transfer Between Guarantee Periods Page 9
Termination Provisions Page 9
Settlement Provisions Page 11
General Provisions Page 13
Any Riders or Endorsements follow the Life Annuity Tables.
<PAGE>
CONTRACT SPECIFICATIONS
CONTRACT OWNER THE GROUP ANNUITY TRUST
CONTRACT NUMBER SPECIMEN 06/01/94 CONTRACT DATE
- --------------------------------------------------------------------------------
Purchase Payment/Termination Amount:
- ------------------------------------
Minimum Purchase Payment Amount: $5,000 per Certificate
Maximum Purchase Payment Amount: $1,000,000 per Certificate unless
We consent to a larger amount
Termination Amount: $2,000 per Certificate
Market Value Adjustment Formula:
- --------------------------------
A Market Value Adjustment will be applied when a surrender occurs prior to the
end of a Guarantee Period. The Market Value Adjustment is the difference between
the Account Value and the Market Adjusted Value.
Market Adjusted Value = (Maturity Value) x [ 1/1 + ic]/t//365/
ic = the current Guaranteed Interest Rate (straight line interpolation between
whole years) that We are then crediting for a Guarantee Period of t days on this
class of certificate(s).
t = the number of days remaining in the Guarantee Period adjusting for leap
years.
Surrender Charge:
- -----------------
During the first seven years after a purchase payment is applied to a
Certificate under the contract, a surrender charge may be deducted from any
amount surrendered. This charge is a percentage of the Cash Value surrendered
from a Certificate.
CERTIFICATE YEARS SINCE PAYMENT WAS APPLIED SURRENDER CHARGE
- ------------------------------------------- ----------------
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
THEREAFTER 0%
No surrender charge will apply at the end of an initial Guarantee Period of at
least three years. Initial Guarantee Periods of one or two years are subject to
surrender charges for a period of five years.
Page 3
<PAGE>
Free Withdrawal Amount:
- -----------------------
The Certificate Owner may withdraw interest credited in the previous Certificate
Year without a Market Value Adjustment or a surrender charge.
Automatic Renewal Guarantee Period:
- -----------------------------------
A one year Guarantee Period.
Guarantee Period Transfer Charge:
- ---------------------------------
$0.
Page 4
<PAGE>
DEFINITIONS
(a) Account - An Account is established for each purchase payment.
(b) Account Value - The sum of the purchase payment under each Account and all
interest credited to that date, less the sum of all partial surrenders,
surrender charges, and applicable premium tax deducted to that date under
that Certificate.
(c) Annuitant - The person on whose life the Certificate is issued and on whose
life the annuity payments are made.
(d) Annuity Commencement Date - the date shown on the Certificate
Specifications page on which annuity payments commence.
(e) Beneficiary(ies) - The person(s) entitled to receive benefits under a
Certificate after the death of the Annuitant, Certificate Owner or first of
joint Certificate Owners.
(f) Cash Surrender Value - The Cash Value under each Account less surrender
charges and any applicable premium tax.
(g) Cash Value - The Account Value at the end of a Guarantee Period or the
Market Adjusted Value before the end of a Guarantee Period.
(h) Certificate - The individual Certificate provided to the Certificate Owner,
which describes the benefits, rights and obligations of the Certificate
Owner and Us.
(i) Certificate Date - The date on which a Certificate is issued.
(j) Certificate Owner(s) - The person(s) who participate(s) under this contract
and is given a Certificate.
(k) Certificate Year(s) - The twelve month period(s) beginning with the
Certificate Date.
(l) Contingent Annuitant - The person designated prior to the Certificate Date
who, upon the Annuitant's death prior to the Annuity Commencement Date,
becomes the Annuitant.
(m) Contract Date - The date shown on the Contract Specifications page on which
the contract is issued.
(n) Due Proof of Death - A copy of a certified death certificate; a copy of a
certified decree of a court of competent jurisdiction as to the finding of
death; a written statement by a medical doctor who attended the deceased;
or any other proof satisfactory to Us.
(o) Guaranteed Interest Rate - The annual effective interest rate credited to a
purchase payment during the Guarantee Period as described in the Crediting
of Interest and Guarantee Periods section.
(p) Guarantee Period - The period for which either an initial or subsequent
Guarantee Interest Rate is credited.
(q) Market Adjusted Value - Reflects the relationship on the Surrender Date
between the current Guaranteed Interest Rate for the duration remaining in
the Guarantee Period and the Guaranteed Interest Rate that applies to the
Certificate.
(r) Market Value Adjustment - The difference between the Account Value and the
Market Adjusted Value.
(s) Maturity Value - The accumulated value of a purchase payment at the
Guaranteed Interest Rate at the end of the Guarantee Period selected less
any partial surrenders, surrender charges, and applicable premium tax
previously deducted.
(t) Our Office - The home office of the Travelers Insurance Company located at
One Tower Square, Hartford, Connecticut. All correspondence concerning this
contract should be sent to the attention of Annuity Services.
(u) Surrender Date - The date We receive Written Request from the Certificate
Owner for a surrender or the date the Certificate Owner requests the
surrender to be effective, if later.
(v) We, Us, Our - The Travelers Insurance Company.
(w) Written Request - A written form satisfactory to Us and received at Our
Office.
(x) You, Your - The contract owner. The contract owner is the person or entity
named as such on the Contract Specifications page.
Page 5
<PAGE>
PURCHASE PAYMENT
Purchase Payment - The purchase payment is the payment made for the Certificate
and the benefits it provides. The minimum purchase payment is shown on both the
Contract and Certificate Specifications pages. The purchase payment is payable
at Our Office. We reserve the right to limit the amount of the purchase payment
which will be accepted.
Premium Tax - The premium tax is the amount of tax, if any, charged by the state
or municipality on a purchase payment, on the Cash Value upon surrender, or on
the amount applied to elect an annuity option. We will deduct any applicable
premium tax from the Cash Value either upon death, surrender, annuitization or
at the time the purchase payment is made, but no earlier than when We have a tax
liability under law.
CONTRACT CONTROL PROVISIONS
Allocation of Purchase Payment
The purchase payment (less applicable premium tax, if any) will be allocated to
an Account established for the Certificate Owner by Us. Account Values will be
determined in accordance with the terms of this contract and related
certificates.
Owner
This contract belongs to the Contract Owner shown on the Contract Specifications
page. The Certificate belongs to the Certificate Owner or to any person
subsequently named in a Written Request of transfer of certificate ownership as
provided below. A Certificate Owner has sole power during the Annuitant's
lifetime to exercise any rights and to receive all benefits given in the
Certificate provided an irrevocable Beneficiary is not named and provided the
Certificate is not assigned.
The Certificate Owner will be the recipient of all payments while the Annuitant
is alive unless he/she directs them to an alternate recipient under a recorded
payment direction. An alternate recipient under a payment direction does not
become the Certificate Owner. A payment direction is revocable by the
Certificate Owner at any time by Written Request giving 30 days advance notice.
Joint Certificate Owners
Married spouses may be named as joint Certificate Owners in a Written Request
prior to the Certificate Date. All rights of Certificate ownership must be
exercised by joint action. Joint Certificate Owners own equal shares of any
benefits accruing or payments made to them while both live. All rights of a
joint Certificate Owner end at death if another joint Certificate Owner
survives. The entire interest of the deceased joint Certificate Owner in the
Certificate will pass to the surviving joint Certificate Owner.
Assignments
Ownership Assignments
A Certificate Owner may transfer Certificate ownership by Written Request.
The Certificate Owner may not revoke any assignment after the effective
date. Once the Certificate ownership assignment is recorded by Us, it will
take effect as of the date of the Certificate Owner's Written Request,
subject to any payments made or other action taken by Us before the
recording.
Unless provided otherwise, a Certificate ownership assignment does not
affect the interest of any Beneficiary designated prior to the effective
date of the transfer. Certificate ownership assignments may have adverse tax
consequences to the Certificate Owner.
Page 6
<PAGE>
Collateral Assignments
A Certificate Owner may collaterally assign Certificate ownership of all or
a portion of the Certificate by Written Request without the approval of any
Beneficiary unless irrevocably named. The Certificate Owner may not exercise
any rights of ownership while the assignment remains in effect without the
approval of the collateral assignee. We are not responsible for the validity
of any assignment. Once the collateral assignment is recorded by Us, it will
take effect as of the date of the Certificate Owner's Written Request,
subject to any payments made or any other actions taken by Us before the
request is received.
If a claim is made based on an assignment, We may require proof of interest
of the claimant. A recorded assignment takes precedence over any rights of a
Beneficiary. Any amount due under a recorded assignment will be paid in a
single sum. Collateral Assignments may have adverse tax consequences to the
Certificate Owner.
Creditor Claims
To the extent permitted by law, the rights or benefits of the Certificate Owner
or the Beneficiary under the Certificate are not subject to the claims of
creditors or to any legal process.
Beneficiary
The Beneficiary is the surviving joint Certificate Owner. If there is no
surviving joint Certificate Owner, the Beneficiary is the party named by the
Certificate Owner in a Written Request. The Beneficiary has the right to
receive any remaining Certificate benefits upon the death of the Certificate
Owner, the first joint Certificate Owner, or the Annuitant, as described further
in the Death Benefit provision.
The surviving joint Certificate Owner receives the entire Death Benefit to the
exclusion of any party that is named as Beneficiary.
If there is more than one Beneficiary surviving the death of the Certificate
Owner or the death of the Annuitant, the Beneficiaries will share equally in
benefits unless different shares are recorded with Us in a Written Request prior
to the death.
Unless an irrevocable Beneficiary has been named, the Certificate Owner has the
right to change any Beneficiary by Written Request during the Annuitant's
lifetime and while the Certificate continues.
Once a change in Beneficiary is recorded by Us, it will take effect on that date
or on the date requested, if later, subject to any payments made or other
actions taken by Us before the recording.
If no Beneficiary has been named, or if no Beneficiary is living when the
Certificate Owner or Annuitant dies, the interest of any Beneficiary will pass:
(a) if the Certificate Owner is living, to the Certificate Owner; or
(b) if the Certificate Owner has died, to the Certificate Owner's estate.
Page 7
<PAGE>
Contingent Annuitant
The Certificate Owner may name one individual as a Contingent Annuitant by
Written Request prior to the Certificate Date. A Contingent Annuitant may not
be changed, deleted or added to the Certificate after the Certificate Date.
If an Annuitant who is not also the Certificate Owner or a joint Certificate
Owner dies prior to the Annuity Commencement Date while the Certificate is in
effect and while the Contingent Annuitant is living:
(a) the death benefit will not be payable upon the Annuitant's death;
(b) the Contingent Annuitant becomes the Annuitant; and
(c) all other rights and benefits provided by the Certificate will continue in
effect.
When a Contingent Annuitant become the Annuitant, the Annuity Commencement Date
remains the same as previously in effect unless otherwise provided.
If the Annuitant dies simultaneously with the Certificate Owner or with a joint
Certificate Owner, distributions required by tax law must commence as described
under the Tax Law Qualification section. The Contingent Annuitant does not
become the Annuitant in this circumstance.
CREDITING OF INTEREST AND GUARANTEE PERIODS
The purchase payment (less surrenders made and less applicable premium tax, if
any) will earn interest at the initial Guaranteed Interest Rate during the
initial Guarantee Period. All interest earned will be credited daily. This
compounding effect is reflected in the Guaranteed Interest Rates.
Within 60 days of the end of any Guarantee Period, We will notify the
Certificate Owner about selecting a subsequent Guarantee Period. If no election
is made, the automatic renewal guarantee period as stated on both the Contract
and Certificate Specifications pages will commence, unless the Certificate
Owner has:
a. submitted a Written Request for a full surrender which we receive within 30
days prior to the end of the current Guarantee Period; or
b. elected by Written Request a Guarantee Period of a different duration from
among those offered by Us within 30 days prior to the end of the current
Guarantee Period; or
c. selected a subsequent Guarantee Period that extends beyond the Annuity
Commencement Date then in effect. In this case, We will automatically
establish a subsequent Guarantee Period that will end nearest to the Annuity
Commencement Date then in effect, unless the Certificate Owner elects by
Written Request a subsequent Guarantee Period of shorter duration.
At any time during the automatic renewal guarantee period, the Certificate Owner
may transfer to a Guarantee Period of a different duration without incurring a
surrender charge or Market Value Adjustment.
The Account Value at the beginning of any subsequent Guarantee Period will be
equal to the Account Value at the end of the Guaranteed Period just ending. The
Account Value will earn interest at the subsequent Guaranteed Interest Rate
during the subsequent Guarantee Period. There is no minimum Guaranteed Interest
Rate for renewals. However, this rate will be at least equal to the initial
Guaranteed Interest Rate being credited to purchase payments for new
certificates at the time the subsequent Guaranteed Interest Rate is determined.
Page 8
<PAGE>
MARKET VALUE ADJUSTMENT
This contract and related certificates contain a Market Value Adjustment
formula. The formula may result in upward or downward adjustments in the amount
payable on any full or partial surrender of a Certificate made prior to the end
of any Guarantee Period. Details of the Market Value Adjustment formula are
described in both the Contract and Certificate Specifications pages.
The Market Value Adjustment formula will not be applied when the Certificate
Owner submits a Written Request for:
a. a full or partial surrender at the end of any Guarantee Period if We receive
the request within the 30 day period prior to the end of such Guarantee
Period; or
b. any interest credited during the previous Certificate Year.
TRANSFER BETWEEN GUARANTEE PERIODS
Once each Certificate Year after the first Certificate Year, the Certificate
Owner may elect by Written Request to transfer out of the current Guarantee
Period and into a Guarantee Period of a different duration. At that time, a new
Guarantee Period will be established for the duration the Certificate Owner
chooses, and the Account Value at the beginning of the new Guarantee Period will
equal the Market Adjusted Value for the current Guarantee Period at the time of
the transfer. There is no surrender charge for this transfer. We reserve the
right to charge for any such transfer by reducing the Account Value at the
beginning of the new Guarantee Period by an amount not to exceed $50.00. The
Guarantee Period transfer charge is shown on both the Contract and Certificate
Specifications pages.
Surrender charges will continue to be based on the appropriate Certificate Year
as determined from the original Certificate Date.
TERMINATION PROVISIONS
General Surrenders
The Certificate Owner may make full and partial surrenders from the Certificate
at any time. A surrender charge may be assessed on surrenders as stated on both
the Contract and Certificate Specifications pages.
Special Surrenders
A full or partial surrender of a Certificate made at the end of a Guarantee
Period may be subject to a surrender charge as set forth on both the Contract
and Certificate Specifications pages. The Market Value Adjustment will not be
applied. A request for a surrender at the end of a Guarantee Period must be
received by Written Request within the 30 day period prior to the end of such
Guarantee Period.
No surrender charges will apply at the end of an initial Guarantee Period of at
least three years. Initial Guarantee Periods of one or two years are subject to
surrender charge for a period of five years. No surrender charge will be applied
upon annuitization unless the fifth annuity option is elected within the first
Certificate Year.
In addition, if the Certificate Owner notifies Us by Written Request, We will
send the Certificate Owner any interest credited during the previous Certificate
Year. No surrender charge or Market Value Adjustment will be imposed on such
interest payments.
Termination After the Annuity Commencement Date
The Certificate may not be surrendered after the commencement of annuity
payments.
Payment Upon Surrender - Deferral of Payment
We may defer payment of a partial or full surrender request for up to six months
from the date of the Written Request. If payment is deferred for more than 30
days from date the request is received, We will pay interest of 3 1/2% on the
amount deferred.
Page 9
<PAGE>
Death Benefit
A death benefit is payable to the Beneficiary before annuity payments commence,
upon the death of
a. the Annuitant
b. the Certificate Owner, or
c. the first of joint Certificate Owners.
We will pay the Beneficiary the death benefit in a single sum upon receiving Due
Proof of Death. The death benefit equals the Account Value as of the date We
receive written notification of Due Proof of Death.
A death benefit is also due and payable to the Beneficiary when the Annuitant
dies after annuity payments commence under options with remaining guaranteed
payments or cash refunds.
A Beneficiary may request that a death benefit payable under the Certificate be
applied to an annuity option, subject to the Settlement Provisions.
If before annuity payments commence, the Annuitant dies with both joint
Certificate Owners or the Certificate Owner and a Contingent Annuitant
surviving, the Contingent Annuitant becomes the Annuitant and a death benefit is
not payable.
Tax Law Qualification
The following conditions, restrictions, and limitations must apply for certain
death benefit payments as described below to maintain the federal tax deferred
status of this annuity:
a) If the Certificate Owner dies before annuity payments commence, the
Beneficiary must receive the entire death benefit proceeds within five years
of the Certificate Owner's death unless:
1. the Beneficiary elects by Written Request to receive the proceeds
over life or over a period not extending beyond life expectancy, and
the payments begin within one year of the Certificate Owner's death,
or
2. the sole Beneficiary is the Certificate Owner's spouse who elects by
Written Request to continue the Certificate deferral. The Certificate
Owner's spouse in this circumstance becomes the Certificate Owner and
Annuitant (if the Annuitant has not survived).
b) If one joint Certificate Owner dies before annuity payments commence, the
surviving joint Certificate Owner who is the sole Beneficiary for this
purpose must receive the entire death benefit proceeds within five years of
the deceased joint Certificate Owner's death unless:
1. the Beneficiary elects by Written Request to receive the proceeds
over life or over a period not extending beyond life expectancy, and
the payments begin within one year of the deceased joint Certificate
Owner's death, or
2. the Beneficiary elects by Written Request to continue the Certificate
deferral. That individual becomes the sole owner and also the
Annuitant if the deceased joint Certificate Owner was the Annuitant
or if the Annuitant died simultaneously with the deceased joint
Certificate Owner.
c) If the Certificate Owner is a non-natural person and the Annuitant dies
before any annuity payments commence, the Beneficiary must receive the
entire death benefit proceeds within five years of the death of the
Annuitant.
d) If the Certificate Owner or Annuitant dies after annuity payments commence,
the remaining value of the contract must be distributed at least as rapidly
as under the method of distribution being used at the date of death.
e) If there is no Beneficiary named when the Certificate Owner dies, or if none
survives the Certificate Owner, and if there is no surviving joint
Certificate Owner, ownership of the death benefit passes to the Certificate
Owner's estate. The estate or persons taking benefits through the
Certificate Owner's estate must receive the entire death benefit proceeds
within five years of the Certificate Owner's death.
Page 10
<PAGE>
f) If the federal tax law, regulations or rules require a distribution more
rapid than described above to keep this annuity contract tax deferred, we
will administer the contract and related certificates in accordance with the
law, regulations and rules. We will provide You with a revised contract
rider describing any necessary changes, and the Certificate Owner with a
revised Certificate rider following all regulatory approvals.
Termination of the Contract and Certificate
We reserve the right to terminate a Certificate if the Account Value is less
than the termination amount shown on both the Contract and Certificate
Specifications pages. Termination will not occur until 31 days after We have
mailed notice of termination to the Certificate Owner at the Certificate Owner's
last known address. If a Certificate is terminated, we will pay the Certificate
Owner the Cash Surrender Value, if any.
We reserve the right to terminate this contract if all related certificates have
been terminated.
SETTLEMENT PROVISIONS
Annuity Benefit
On the Annuity Commencement Date, unless directed otherwise, We will apply the
Cash Surrender Value, or any part thereof, less any applicable premium tax, to
purchase the monthly annuity payments according to the annuity option elected by
the Certificate Owner. In the absence of such election, the second annuity
option providing a life annuity with 120 months certain will apply. Election of
an annuity option must be made by Written Request and received by Us at least 30
days prior to the date such election is to become effective. If the Annuity
Commencement Date coincides with the end of any Guarantee Period, no Market
Value Adjustment will be applied in the determination of the annuity payments.
No surrender charge will be applied upon annuitization (unless the fifth annuity
option is elected within the first Certificate Year).
The Certificate Owner may change the Annuity Commencement Date at any time as
long as the change is made by Written Request and is received by Us at least 30
days prior to the scheduled Annuity Commencement Date.
The Certificate Owner, or in the event the Certificate Owner has not done so,
the Beneficiary, may elect, in lieu of payment in one sum, that any amount due
under the Certificate be applied under any of the annuity options described
below. The election by the Beneficiary must be made within one year after the
Certificate Owner's death by Written Request to Our Office. with the exception
of the sixth annuity option. The sixth annuity option must be elected at the
time Due Proof of Death is provided to Us.
Death of Annuitant
In the event of the death of the Certificate Owner or Annuitant after annuity
payments commence, any method of distribution must provide that any amount
payable as a death benefit will be distributed at least as rapidly as under the
method of distribution in effect at the time of the death of the Certificate
Owner or Annuitant.
Annuity Options
Option 1. Life Annuity - An annuity payable monthly during the lifetime of the
Annuitant, ceasing with the last payment due prior to the death of the
Annuitant.
Option 2. Life Annuity with 120, 180, or 240 Monthly Payments Certain - An
annuity providing monthly income to the Annuitant for a guaranteed period of 120
months, 180 months, or 240 months (as selected), and for as long thereafter as
the Annuitant shall live.
Page 11
<PAGE>
Option 3. Cash Refund Life Annuity - An annuity payable monthly during the
lifetime of the Annuitant, ceasing with the last payment due prior to the death
of the Annuitant provided that, at the death of the Annuitant, the Beneficiary
will receive an additional payment equal to the excess, if any, of (a) over (b)
where: (a) is the Cash Value applied on the Annuity Commencement Date under
this option; and (b) is the dollar amount of annuity payments already paid.
Option 4. Joint and Last Survivor Annuity - An annuity payable monthly during
the joint lifetime of the Annuitant and a secondary payee, and thereafter during
the remaining lifetime of the survivor, ceasing with the last payment prior to
the death of the survivor.
Option 5. Payments for a Designated Period - An amount payable monthly for the
guaranteed number of years selected which may be from 5 to 30 years.
Option 6. Annuity Proceeds Settlement Option - Proceeds from the death benefit
can be left with Us for a period not to exceed five years from the date of the
Certificate Owner's or Annuitant's death prior to the Annuity Commencement Date.
The proceeds will remain in the same Guarantee Period and continue to earn the
same Guaranteed Interest Rate in effect at the time of death as long as this
option is elected at the time Due Proof of Death is provided to Us. If the
Guarantee Period ends before the end of the five year period, the Beneficiary
may elect a new Guarantee Period with a duration not to exceed the time
remaining in the period of five years from the date of the death of the
Certificate Owner or Annuitant. If no election is made, the certificate will
automatically renew for a period of one year, provided that the five year period
is not exceeded. Full or partial surrenders may be made at any time. A Market
Value Adjustment will be applied to all surrenders except those occurring at the
end of a Guarantee Period or if the previous Certificate Year's interest is
being surrendered. This option is only available to Beneficiaries.
Annuity Tables
The attached tables show the dollar amount of the monthly payments for each
$1000 of proceeds applied under the five annuity options. Under options 1, 2 or
3, the amount of each payment will depend upon the age of the Annuitant at the
time the first payment is due. Under option 4, the amount of each payment will
depend upon the ages of the Annuitant and the secondary payee at the time the
first payment is due.
Betterment of Rates
If at the due date of the first annuity payment, We have declared a higher rate
per $1,000 of proceeds applied under an annuity option, then the annuity
payments will be based on the higher rates.
In no event will the annuity benefit, at the time of its commencement, be less
than that which would be provided by applying the greater of the Cash Surrender
Value or 95% of the Cash Value to purchase a single premium immediate annuity
contract offered by Us or one of Our affiliates at the time to the same class of
annuitants.
Minimum Amount
The minimum amount that can be placed under an annuity option is $2,000 unless
We consent to a lesser amount.
Minimum Payment
The annuity option elected must result in a payment of at least $20.00. If at
any time payments are less than $20.00, We have the right to change the
frequency to an interval resulting in a payment of at least $20.00. If any
amount due is less than $20.00 per year, We may make other arrangements that are
equitable to the Annuitant.
Date of Payment
The first payment under any annuity option shall be made on the Annuity
Commencement Date. Subsequent payments shall be made on the same day of each
month in accordance with the manner of payment selected.
Page 12
<PAGE>
GENERAL PROVISIONS
The Contract
The entire contract between You and Us consists of the contract and all attached
pages.
The Certificate
Each Certificate owner will receive an individual Certificate stating in
substance the benefits to which he or she is entitles under the Certificate and
contract. The Certificate does not constitute a part of the contract. The entire
Certificate consists of the Certificate and all attached pages.
Contract and Certificate Changes
The only way this contract or the Certificate may be changed is be a written
endorsement signed by one of Our officers.
Misstatement
If the Annuitant's or Certificate Owner's sex or date of birth was misstated,
all benefits of the Certificate are what the purchase payment would have
purchased at the correct age and sex. Proof of the Annuitant's and Certificate
Owner's age may be filed at any time at Our Office.
Incontestability
We will not contest this contract from its Contract Date. We will not contest a
Certificate from its Certificate Date.
Required Reports
We will provide a report to the Certificate Owner as often as required by law,
but at least once in each Certificate Year before the due date of the first
annuity payment.
Mortality and Expenses
Our actual mortality and expense experience will not affect the amount of any
annuity payments or any other values under the contract and related
certificates.
Non-Participating
This contract and related certificates do not share in Our surplus earnings, so
neither You or a Certificate Owner will receive dividends under it.
Conformity with State and Federal Laws
This contract and related certificates are governed by the law of the state in
which they are issued for delivery. Any paid-up annuity, Cash Surrender Value
or death benefit available under this contract and related certificates will not
be less than the minimum benefits required by the statutes of that state.
Upon receiving appropriate state approval, We may at any time make any changes,
including retroactive changes, in this contract or related certificates to the
extent that the change is required to meet the requirements of any law or
regulation issued by any governmental agency to which We or You are subject.
Page 13
<PAGE>
LIFE ANNUITY TABLES
GUARANTEED DOLLAR AMOUNT OF THE MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTIONS 1, 2 AND 3 - SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
MALE
ADJUSTED NUMBER OF MONTHLY PAYMENTS GUARANTEED CASH
AGE NONE 120 180 240 REFUND
<S> <C> <C> <C> <C> <C>
45 3.87 3.85 3.82 3.77 3.72
46 3.93 3.90 3.87 3.82 3.77
47 3.99 3.96 3.92 3.87 3.82
48 4.05 4.02 3.98 3.92 3.87
49 4.12 4.09 4.04 3.97 3.92
50 4.19 4.15 4.10 4.03 3.98
51 4.27 4.22 4.17 4.08 4.04
52 4.34 4.30 4.23 4.14 4.10
53 4.43 4.37 4.30 4.20 4.16
54 4.51 4.45 4.37 4.26 4.23
55 4.60 4.54 4.45 4.32 4.30
56 4.70 4.62 4.53 4.39 4.37
57 4.80 4.72 4.61 4.45 4.44
58 4.91 4.82 4.69 4.51 4.52
59 5.03 4.92 4.78 4.58 4.61
60 5.15 5.03 4.87 4.65 4.69
61 5.28 5.14 4.96 4.71 4.79
62 5.43 5.27 5.06 4.78 4.88
63 5.58 5.39 5.16 4.84 4.98
64 5.74 5.53 5.26 4.90 5.09
65 5.91 5.66 5.36 4.96 5.20
66 6.10 5.81 5.46 5.02 5.32
67 6.30 5.96 5.56 5.08 5.44
68 6.51 6.12 5.66 5.13 5.56
69 6.73 6.28 5.77 5.18 5.70
70 6.97 6.44 5.86 5.23 5.84
71 7.23 6.61 5.96 5.27 5.99
72 7.51 6.79 6.05 5.31 6.14
73 7.80 6.96 6.14 5.34 6.30
74 8.12 7.14 6.23 5.37 6.47
75 8.46 7.32 6.31 5.40 6.65
</TABLE>
Dollar amounts of the monthly annuity payments for the first, second, third, and
fourth options are based on the 1983 Individual Annuitant Mortality Table A with
ages set back one year and a net investment rate of 3% per annum. The adjusted
age of the person on whose life the life annuity is based is determined from the
actual age last birthday on the due date of the first annuity payment in the
following manner:
<TABLE>
<S> <C> <C> <C> <C>
CALENDAR YEAR IN WHICH
FIRST PAYMENT IS DUE 1995-2000 2001-2010 2011-2020 2021 & LATER
ADJUSTED AGE IS
ACTUAL AGE MINUS 0 MINUS 1 MINUS 2 MINUS 3
</TABLE>
<PAGE>
LIFE ANNUITY TABLES
GUARANTEED DOLLAR AMOUNT OF THE MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTIONS 1, 2 AND 3 - SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
FEMALE
ADJUSTED NUMBER OF MONTHLY PAYMENTS GUARANTEED CASH
AGE NONE 120 180 240 REFUND
<S> <C> <C> <C> <C> <C>
45 3.59 3.58 3.57 3.55 3.52
46 3.64 3.63 3.61 3.59 3.56
47 3.68 3.67 3.66 3.63 3.60
48 3.74 3.72 3.71 3.68 3.64
49 3.79 3.78 3.76 3.72 3.69
50 3.85 3.83 3.81 3.77 3.73
51 3.90 3.89 3.86 3.82 3.78
52 3.97 3.95 3.92 3.88 3.84
53 4.03 4.01 3.98 3.93 3.89
54 4.10 4.08 4.04 3.99 3.95
55 4.18 4.15 4.11 4.05 4.01
56 4.25 4.22 4.18 4.11 4.07
57 4.34 4.30 4.25 4.17 4.14
58 4.42 4.38 4.32 4.23 4.20
59 4.52 4.47 4.40 4.30 4.28
60 4.61 4.56 4.48 4.37 4.35
61 4.72 4.66 4.57 4.44 4.43
62 4.83 4.76 4.66 4.51 4.52
63 4.95 4.87 4.75 4.58 4.61
64 5.08 4.98 4.85 4.65 4.70
65 5.21 5.10 4.95 4.72 4.80
66 5.36 5.22 5.05 4.79 4.90
67 5.51 5.36 5.16 4.86 5.01
68 5.67 5.50 5.26 4.93 5.12
69 5.85 5.65 5.38 5.00 5.25
70 6.04 5.80 5.49 5.06 5.37
71 6.25 5.97 5.60 5.12 5.51
72 6.47 6.14 5.71 5.18 5.65
73 6.71 6.32 5.83 5.23 5.80
74 6.98 6.50 5.94 5.28 5.96
75 7.26 6.69 6.04 5.32 6.13
</TABLE>
Dollar amounts of the monthly annuity payments for the first, second, third, and
fourth options are based on the 1983 Individual Annuitant Mortality Table A with
ages set back one year and a net investment rate of 3% per annum. The adjusted
age of the person on whose life the life annuity is based is determined from the
actual age last birthday on the due date of the first annuity payment in the
following manner:
CALENDAR YEAR IN WHICH
FIRST PAYMENT IS DUE 1995-2000 2001-2010 2011-2020 2021-LATER
ADJUSTED AGE IS
ACTUAL AGE MINUS 0 MINUS 1 MINUS 2 MINUS 3
<PAGE>
LIFE ANNUITY TABLES
GUARANTEED DOLLAR AMOUNT OF THE MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTION 4 - JOINT ANT LAST SURVIVOR LIFE ANNUITY
FEMALE AGE
<TABLE>
<CAPTION>
MALE AGE 45 50 55 60 65 70 75
<S> <C> <C> <C> <C> <C> <C> <C>
45 3.36 3.46 3.56 3.64 3.71 3.76 3.80
50 3.42 3.56 3.69 3.82 3.93 4.01 4.08
55 3.47 3.64 3.82 3.99 4.16 4.29 4.40
60 3.51 3.70 3.92 4.15 4.39 4.61 4.79
65 3.54 3.75 4.00 4.29 4.61 4.94 5.24
70 3.56 3.78 4.07 4.41 4.80 5.25 5.70
75 3.57 3.81 4.11 4.48 4.95 5.51 6.15
</TABLE>
Dollar amounts of the monthly annuity payments for the first, second, third, and
fourth options are based on the 1983 Individual Annuitant Mortality Table A with
ages set back one year and a net investment rate of 3% per annum. The adjusted
age of the person on whose life the life annuity is based is determined from the
actual age last birthday on the due date of the first annuity payment in the
following manner:
<TABLE>
<S> <C> <C> <C> <C>
CALENDAR YEAR IN WHICH
FIRST PAYMENT IS DUE 1995-2000 2001-2010 2011-2020 2021 & LATER
ADJUSTED AGE IS
ACTUAL AGE MINUS 0 MINUS 1 MINUS 2 MINUS 3
</TABLE>
<PAGE>
ANNUITY TABLES
GUARANTEED DOLLAR AMOUNT OF THE MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTION 5 - PAYMENTS FOR A DESIGNATED PERIOD
<TABLE>
<CAPTION>
NUMBER OF MONTHLY NUMBER OF MONTHLY
YEARS PAYMENT YEARS PAYMENT
AMOUNT AMOUNT
<S> <C> <C> <C>
5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18
</TABLE>
The dollar amounts of the monthly annuity payments for the fifth option are
based on a net investment rate of 3% per annum.
<PAGE>
[LOGO OF THE TRAVELERS INSURANCE COMPANY APPEARS HERE]
THE TRAVELERS INSURANCE COMPANY . ONE TOWER SQUARE . HARTFORD CT . 06183
A STOCK COMPANY
We are pleased to provide You the benefits of this annuity contract. Please read
all the attached forms carefully.
RIGHT TO EXAMINE THIS CONTRACT
If this contract is returned to Us at Our Office or to Our agent to be cancelled
within 10 days after its delivery to You, We will pay You the Market Adjusted
Value within 10 days after its return. After the contract is returned, it will
be considered as if it were never in effect.
This contract is issued in consideration of the Purchase Payment. It is subject
to the terms and conditions stated on the attached pages, all of which are a
part of it.
Executed at Hartford, Connecticut
/s/ Robert I. Lipp
Chairman
This is a legal contract between You and Us. PLEASE READ YOUR
CONTRACT CAREFULLY.
Single Premium Individual Modified Guaranteed Annuity Contract
Non-Tax Qualified
Elective Options Non-Participating
THE CASH SURRENDER VALUE MAY INCREASE OR DECREASE IN ACCORDANCE WITH THE MARKET
VALUE ADJUSTMENT FORMULA ON THE CONTRACT SPECIFICATIONS PAGE. THE CASH SURRENDER
VALUE IS AVAILABLE WITHOUT APPLICATION OF THE MARKET VALUE ADJUSTMENT AT THE END
OF A GUARANTEE PERIOD.
<PAGE>
TABLE OF CONTENTS
-----------------
Contract Specifications Page 3
Definitions Page 4
Purchase Payment Page 5
Contract Control Provisions Page 5
Crediting of Interest and Guarantee Periods Page 6
Market Value Adjustment Page 7
Transfer Between Guarantee Periods Page 7
Termination Provisions Page 7
Settlement Provisions Page 9
General Provisions Page 10
Any Riders or Endorsements follow the Life Annuity Tables.
<PAGE>
CONTRACT SPECIFICATIONS
CONTRACT OWNER JOHN DOE JANE DOE ANNUITANT
JOINT OWNER JANE DOE SAM DOE CONTINGENT ANNUITANT
CONTRACT NUMBER SPECIMEN 06/01/1995 CONTRACT DATE
MONTHLY LIFE ANNUITY 06/01/2024 ANNUITY COMMENCEMENT DATE
- --------------------------------------------------------------------------------
Purchase Payment/Termination Amount:
- ------------------------------------
Minimum Purchase Payment Amount: $5,000
Maximum Purchase Payment Amount: $1,000,000 unless We consent to a
larger amount
Termination Amount: $2,000
Market Value Adjustment Formula:
- --------------------------------
A Market Value Adjustment will be applied when a surrender occurs prior to the
end of a Guarantee Period. The Market Value Adjustment is the difference between
the Account Value and the Market Adjusted Value.
Market Adjusted Value = Maturity Value x [ 1/1 + ic ]/t//365/
ic = the current Guaranteed Interest Rate (straight line interpolation between
whole years) that We are then crediting for a Guarantee Period of t days on this
class of contract(s).
t = the number of days remaining in the Guarantee Period adjusting for leap
years.
Surrender Charge:
- -----------------
During the first seven years after a Purchase Payment is applied under the
contract, a surrender charge may be deducted from any amount surrendered. This
charge is a percentage of the Cash Value surrendered from the contract.
CONTRACT YEARS SINCE PAYMENT WAS APPLIED SURRENDER CHARGE
- ---------------------------------------- ----------------
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
THEREAFTER 0%
No surrender charge will apply at the end of an initial Guarantee Period of at
least three years. Initial Guarantee Periods of one or two years are subject to
a surrender charge period of five years.
<PAGE>
Free Withdrawal Amount:
- -----------------------
Interest credited in the previous Contract Year may be withdrawn without a
Market Value Adjustment or surrender charge.
Automatic Renewal Guarantee Period:
- -----------------------------------
A one year Guarantee Period.
Guarantee Period Transfer Charge:
- ---------------------------------
$0.
Page 3a
<PAGE>
DEFINITIONS
(a) Account Value - The sum of the purchase payment and all interest credited
to that date, less the sum of all partial surrenders, surrender charges,
and applicable premium tax deducted to that date.
(b) Annuitant - The person on whose life this contract is issued and on whose
life the annuity payments are made.
(c) Annuity Commencement Date - The date on which annuity payments are to
begin. The date is shown on the Contract Specifications page.
(d) Beneficiary - The person entitled to receive benefits after the death of
the Annuitant, Your death or the death of a joint contract owner as
applicable.
(e) Cash Surrender Value - The Cash Value less surrender charges and any
applicable premium tax.
(f) Cash Value - The Account Value at the end of a Guarantee Period or the
Market Adjusted Value before the end of a Guarantee Period.
(g) Contingent Annuitant - The person You designate prior to the Contract Date,
who, upon the Annuitant's death prior to the Annuity Commencement Date,
becomes the Annuitant.
(h) Contract Date - The date shown on the Contract Specifications page.
(i) Contract Year(s) - The twelve month period(s) beginning with the Contract
Date.
(j) Due Proof of Death - A copy of a certified death certificate; a copy of a
certified decree of a court of competent jurisdiction as to the finding of
death; a written statement by a medical doctor who attended the deceased;
or any other proof satisfactory to Us.
(k) Guaranteed Interest Rate - The annual effective interest rate credited to a
purchase payment during the Guarantee Period as described in the Crediting
of Interest and Guarantee Periods section.
(l) Guarantee Period - The period for which either an
initial or subsequent Guaranteed Interest Rate is credited.
(m) Market Adjusted Value - Reflects the relationship on the Surrender Date
between the current Guaranteed Interest Rate for the duration remaining in
the Guarantee Period and the Guaranteed Interest Rate that applies to Your
contract.
(n) Market Value Adjustment - The difference between the Account Value and the
Market Adjusted Value.
(o) Maturity Value - The accumulated value of a purchase payment at the
Guaranteed Interest Rate at the end of the Guarantee Period selected, less
any partial surrenders, surrender charges, and applicable premium tax
previously deducted.
(p) Our Office - The home office of The Travelers Insurance Company located at
One Tower Square, Hartford, Connecticut. All correspondence concerning this
contract should be sent to the attention of Annuity Services.
(q) Surrender Date - The date We receive Your Written Request for a surrender
or the date You request the surrender to be effective, if later.
(r) We, Us, Our - The Travelers Insurance Company.
(s) Written Request - A written form satisfactory to Us and received at Our
Office.
(t) You, Your - The contract owner(s). The contract owner(s) is the person(s)
or entity(ies) named as such on the Contract Specifications page.
<PAGE>
PURCHASE PAYMENT
Purchase Payment - The minimum purchase payment is shown on the Contract
Specifications page. The purchase payment is payable at Our Office. We reserve
the right to limit the amount of the purchase payment which will be accepted.
Premium Tax - The premium tax is the amount of tax, if any, charged by the state
or municipality on a purchase payment, on the Cash Value upon surrender, or on
the amount applied to elect an annuity option. We will deduct any applicable
premium tax from the Cash Value either upon death, surrender, annuitization or
at the time the purchase payment is made, but no earlier than when We have a tax
liability under law.
CONTRACT CONTROL PROVISIONS
Allocation of Purchase Payment
The purchase payment (less applicable premium tax, if any) will be allocated to
an account established for You by Us. Account Values will be determined in
accordance with the terms of this contract.
Owner
This contract belongs to You or to any person subsequently named in a Written
Request of ownership assignment as provided below. You have sole power during
the Annuitant's lifetime to exercise any rights and to receive all benefits
given in this contract provided You have not named an irrevocable Beneficiary
and provided the contract is not assigned.
You will be the recipient of all payments while the Annuitant is alive unless
You direct them to an alternate recipient under a recorded payment direction. An
alternate recipient under a payment direction does not become the contract
owner. A payment direction is revocable by You at any time by Written Request
giving 30 days advance notice.
Joint Owner
Married spouses may be named as joint owners in a Written Request prior to the
Contract Date. All rights of ownership must be exercised by joint action. Joint
owners own equal shares of any benefits accruing or payments made to them. All
rights of a joint owner end at death if another joint owner survives. The entire
interest of the deceased joint owner in this contract will pass to the surviving
joint owner.
Assignments
Ownership Assignments
You may transfer ownership by Written Request. You may not revoke any
assignment after the effective date. Once the ownership assignment is
recorded by Us, it will take effect as of the date of Your Written
Request, subject to any payments made or other actions taken by Us before
the recording.
Unless provided otherwise, an ownership assignment does not affect the
interest of any Beneficiary designated prior to the effective date of the
transfer. Ownership assignments may have adverse tax consequences to You.
Collateral Assignments
You may collaterally assign ownership of all or a portion of this
contract by Written Request without the approval of any Beneficiary
unless irrevocably named. You may not exercise any rights of ownership
while the assignment remains in effect without the approval of the
collateral assignee. We are not responsible for the validity of any
assignment. Once the collateral assignment is recorded by Us, it will
take effect as of the date of your Written Request, subject to any
payments made or other actions taken by Us before the request is
received.
If a claim is made based on an assignment, We may require proof of
interest of the claimant. A recorded assignment takes precedence over any
rights of a Beneficiary. Any amount due under a recorded assignment will
be paid in a single sum. Collateral assignments may have adverse tax
consequences to You.
Creditor Claims
To the extent permitted by law, the rights or benefits of You or the Beneficiary
under this contract are not subject to the claims of creditors or to any legal
process except as may be provided by a collateral assignment.
Page 5
<PAGE>
Beneficary
The Beneficiary is the surviving joint owner. If there is no surviving joint
owner, the Beneficiary is the party named in a Written Request. The Beneficiary
has the right to receive any remaining contractual benefits upon the death of
the owner, the first joint owner, or the Annuitant, as described further in the
Death Benefit provision.
The surviving joint owner receives the entire Death Benefit to the exclusion of
any party that is named as Beneficiary.
If there is more than one Beneficiary surviving Your death as a sole owner or
the death of the Annuitant, the Beneficiaries will share equally in benefits
unless different shares are recorded with us by Written Request prior to the
death.
Unless an irrevocable Beneficiary has been named, You have the right to change
any Beneficiary by Written Request during the lifetime of the Annuitant and
while the contract continues.
Once a change in Beneficiary is recorded by Us, it will take effect on that date
or on the date requested, if later, subject to any payments made or other
actions taken by Us before the recording.
If no Beneficiary has been named by You, or if no Beneficiary is living when the
contract owner or Annuitant dies, the interest of the Beneficiary will pass:
(a) if You are living, to You; or
(b) if You have died, to Your estate.
Annuitant
The Annuitant is shown on the Contract Specifications page. The Annuitant may
not be changed after the Contract Date.
Contingent Annuitant
You may name one individual as a Contingent Annuitant by Written Request prior
to the Contract Date. A Contingent Annuitant may not be changed, deleted or
added to the contract after the Contract Date.
If an Annuitant who is not also the contract owner or a joint owner dies prior
to the Annuity Commencement Date while this contract is in effect and while the
Contingent Annuitant is living:
(a) the death benefit will not be payable upon the Annuitant's death;
(b) the Contingent Annuitant becomes the Annuitant; and
(c) all other rights and benefits provided by this contract will continue
in effect.
When a Contingent Annuitant becomes the Annuitant, the Annuity Commencement Date
remains the same as previously in effect, unless otherwise provided.
If the Annuitant dies simultaneously with You or with a joint owner,
distributions required by tax law must commence as described under the Tax Law
Qualification section. The Contingent Annuitant does not become the Annuitant in
this circumstance. Neither does a Contingent Annuitant become the Annuitant when
there is a non-natural owner and the Annuitant dies.
CREDITING OF INTEREST AND GUARANTEE PERIODS
The purchase payment (less surrenders made and less applicable premium tax, if
any) will earn interest at the initial Guaranteed Interest Rate during the
initial Guarantee Period. All interest earned will be credited daily. This
compounding effect is reflected in the Guaranteed Interest Rates.
Within 60 days of the end of any Guarantee Period, We will notify You about
selecting a subsequent Guarantee Period. If no election is made, the automatic
renewal guarantee period as stated on the Contract Specifications page will
commence, unless You have:
a. submitted a Written Request for a full surrender which We receive within
30 days prior to the end of the current Guarantee Period; or
b. elected by Written Request a Guarantee Period of a different duration from
among those offered by Us at any time within 30 days prior to the end of
the current Guarantee Period; or
c. selected a subsequent Guarantee Period that extends beyond the Annuity
Commencement Date then in effect. In this case, We will automatically
establish a subsequent Guarantee Period that will end nearest to the
Annuity Commencement Date then in effect, unless You elect by Written
Request a subsequent Guarantee Period of shorter duration.
<PAGE>
At any time during the automatic renewal guarantee period, You may transfer to a
Guarantee Period of a different duration without incurring a surrender charge or
Market Value Adjustment.
The Account Value at the beginning of any subsequent Guarantee Period will be
equal to the Account Value at the end of the Guaranteed Period just ending. The
Account Value will earn interest at the subsequent Guaranteed Interest Rate
during the subsequent Guarantee Period. However, this rate will be at least
equal to the initial Guaranteed Interest Rate being credited to purchase
payments for new contracts at the time the subsequent Guaranteed Interest Rate
is determined.
MARKET VALUE ADJUSTMENT
This contract contains a Market Value Adjustment formula. The formula may
result in upward or downward adjustments in the amount payable on any full or
partial surrender made prior to the end of any Guarantee Period. Details of the
Market Value Adjustment formula are described on the Contract Specifications
page.
The Market Value Adjustment formula will be applied when You submit a Written
Request for:
a. a full or partial surrender at the end of any Guarantee Period if We
receive the request within the 30 day period prior to the end of such
Guarantee Period; or
b. any interest credited during the previous Contract Year.
TRANSFER BETWEEN GUARANTEE PERIODS
Once in each Contract Year after the first Contract Year, You may elect by
Written Request to transfer out of the current Guarantee Period and into a
Guarantee Period of a different duration. At that time, a new Guarantee Period
will be established for the duration You choose, and the Account Value at the
beginning of the new Guarantee Period will equal the Market Adjusted Value for
the current Guarantee Period at the time of the transfer. There is no surrender
charge for this transfer. We reserve the right to charge for any such transfer
by reducing the Account Value at the beginning of the new Guarantee Period by an
amount not to exceed $50.00. The Guarantee Period transfer charge is shown on
the Contract Specifications page.
Surrender charges will continue to be based on the appropriate Contract Year as
determined from the original Contract Date.
TERMINATION PROVISIONS
General Surrenders
Full and partial surrenders may be made under this contract at any time. A
surrender charge may be assessed on surrenders as stated on the Contract
Specifications page.
Special Surrenders
A full or partial surrender made at the end of a Guarantee Period may be subject
to a surrender charge as set forth on the Contract Specifications page. The
Market Value Adjustment will not be applied. A request for a surrender at the
end of a Guarantee Period must be received by Written Request within the 30 day
period prior to the end of such Guarantee Period.
No surrender charges will apply at the end of an initial Guarantee Period of at
least three years. Initial Guarantee Periods of one or two years are subject to
a surrender charge for a period of five years. No surrender charge will be
applied upon annuitization unless the fifth annuity option is elected within the
first Contract Year.
In addition, if You notify Us by Written Request, We will send You any interest
credited during the previous Contract Year. No surrender charge or Market Value
Adjustment will be imposed on such interest payments.
Termination After the Annuity Commencement Date
This contract may not be surrendered after the commencement of annuity payments.
Payment Upon Surrender - Deferral of Payment
We may defer payment of a partial or full surrender request for up to six months
from the date of our receipt of the Written Request. If payment is deferred for
more than 30 days from the date the request is received, We will pay interest of
3 1/2% on the amount deferred.
Page 7
<PAGE>
Death Benefit
A death benefit is payable to the Beneficiary before annuity payments commence,
upon the death of:
a. the Annuitant
b. You, or
c. the first of joint owners.
We will pay the Beneficiary the death benefit in a single sum upon receiving Due
Proof of Death. The death benefit equals the Account Value as of the date We
receive written notification of Due Proof of Death.
A death benefit is also payable to the Beneficiary when You die or the Annuitant
dies after annuity payments commence under annuity options with remaining
guaranteed payments or cash refunds.
A Beneficiary may request that a death benefit payable under this contract be
applied to an annuity option, subject to the Settlement Provisions.
If before annuity payments commence the Annuitant dies with both joint owners or
You and a Contingent Annuitant surviving, the Contingent Annuitant becomes the
Annuitant and a death benefit is not payable.
Tax Law Qualification
The following conditions, restrictions, and limitations must apply for certain
death benefit payments as described below to maintain the federal tax deferred
status of Your annuity:
a. If You die before annuity payments commence, Your Beneficiary must
receive the entire death benefit proceeds within five years of Your death
unless:
1. the Beneficiary elects by Written Request to receive the proceeds
over life or over a period not extending beyond life expectancy,
and the payments begin within one year of Your death, or
2. the sole Beneficiary is Your spouse who elects by Written Request
to continue the contract deferral. Your spouse in this circumstance
becomes the contract owner and Annuitant (if the Annuitant has not
survived).
b. If You are the first joint owner to die before annuity payments commence,
the surviving joint owner who is the sole Beneficiary for this purpose
must receive the entire death benefit proceeds within five years of Your
death unless:
1. the Beneficiary elects by Written Request to receive the proceeds
over life or over a period not extending beyond life expectancy,
and the payments begin within one year of Your death, or
2. the Beneficiary elects by Written Request to continue the contract
deferral. That individual becomes the sole owner, and also the
Annuitant if You were the Annuitant or if the Annuitant died
simultaneously with You.
c. If the owner is a non-natural person and the Annuitant dies before
annuity payments commence, the Beneficiary must receive the entire death
benefit proceeds within five years of the death of the Annuitant.
d. If You die or the Annuitant dies after annuity payments commence, the
remaining value of the contract must be distributed at least as rapidly
as under the method of distribution being used at the date of death.
e. If there is no Beneficiary named when You die, or if none survives You,
and if there is no surviving joint owner, ownership of the death benefit
passes to Your estate. The estate or persons taking benefits through Your
estate must receive the entire death benefit proceeds within five years
of Your death.
f. If the federal tax law, regulations or rules require a distribution more
rapid than described above to keep this annuity contract tax deferred, we
will administer the contract in accordance with the law, regulations and
rules. We will provide You with a revised contract rider describing any
necessary changes, following all regulatory approvals.
Termination of this Contract
We reserve the right to terminate this contract if the Account Value is less
than the termination amount shown on the Contract Specifications page.
Termination will not occur until 31 days after We have mailed notice of
termination to You at Your last known address. If the contract is terminated, We
will pay You the Cash Surrender Value, if any.
<PAGE>
SETTLEMENT PROVISIONS
Annuity Benefit
On the Annuity Commencement Date, unless directed otherwise, We will apply the
Cash Surrender Value, or any part thereof, less any applicable premium tax, to
purchase the monthly annuity payments according to the annuity option elected.
In the absence of an election, the second annuity option providing a life
annuity with 120 monthly payments certain will apply. Election of any annuity
option must be made by Written Request and received by Us at least 30 days prior
to the date such election is to become effective. If the Annuity Commencement
Date coincides with the end of any Guarantee Period, no Market Value Adjustment
will be applied in the determination of the annuity payments. No surrender
charge will be applied upon annuitization (unless the fifth annuity option is
elected within the first Contract Year).
You may change the Annuity Commencement Date at any time as long as the Written
Request is received by Us at least 30 days prior to the scheduled Annuity
Commencement Date. Once annuity payments commence, the annuity option cannot be
changed.
You, or in the event You have not done so, the Beneficiary, after Your death or
the death of the Annuitant, may elect, in lieu of payment in one sum, that any
amount due under this contract be applied under any of the annuity options
described below. Such election by the Beneficiary must be made within one year
after the death of the Annuitant by Written Request to Our Office.
Death of Annuitant
In the event of Your death or the death of the Annuitant after annuity payments
commence, any amount payable as a death benefit will be distributed at least as
rapidly as under the method of distribution in effect at the time of Your death
or the death of the Annuitant.
Annuity Options
Option 1. Life Annuity - An annuity payable monthly during the lifetime of the
Annuitant, ceasing with the last payment due prior to the death of the
Annuitant.
Option 2. Life Annuity with 120, 180, or 240 Monthly Payments Certain- An
annuity providing monthly income to the Annuitant for a guaranteed period of 120
months, 180 months, or 240 months (as selected), and for as long thereafter as
the Annuitant shall live.
Option 3. Cash Refund Life Annuity - An annuity payable monthly during the
lifetime of the Annuitant, ceasing with the last payment due prior to the death
of the Annuitant provided that, at the death of the Annuitant, the Beneficiary
will receive an additional payment equal to the excess, if any, of (a) over (b)
where: (a) is the Cash Value applied on the Annuity Commencement Date under this
option; and (b) is the dollar amount of annuity payments already paid.
Option 4. Joint and Last Survivor Annuity - An annuity payable monthly during
the joint lifetime of the Annuitant and a secondary payee, and thereafter during
the remaining lifetime of the survivor, ceasing with the last payment prior to
the death of the survivor.
Option 5. Payments for a Designated Period - An amount payable monthly for the
guaranteed number of years selected which may be from 5 to 30 years.
Option 6. Annuity Proceeds Settlement Option - Proceeds from the death benefit
can be left with Us for a period not to exceed five years from the date of Your
or the Annuitant's death prior to the Annuity Commencement Date. The proceeds
will remain in the same Guarantee Period and continue to earn the same
Guaranteed Interest Rate as at the time of death as long as this option is
elected at the time Due Proof of Death is provided to Us. If the Guarantee
Period ends before the end of the five year period, the Beneficiary may elect a
new Guarantee Period with a duration not to exceed the time remaining in the
period of five years from the date of Your or the Annuitant's death. If no
election is made, the contract will automatically renew for a period of one year
provided the one year period does not exceed a total of five years from the date
of Your death. (See the Tax Law Qualification Section, page 8). Full or partial
surrenders may be made at any time. A Market Value Adjustment will be applied to
all surrenders except those occurring at the end of a Guarantee Period or if the
previous Contract Year's interest is being surrendered. This option is only
available to Beneficiaries.
Annuity Tables
The attached tables show the guaranteed dollar amount of the monthly payments
for each $1000 of proceeds applied under the first five annuity options. Under
option 1, 2 or 3, the amount of each payment will depend upon the age and sex of
the Annuitant at the time the first payment is due. Under option 4, the amount
of each payment will depend upon the sex of the Annuitant and secondary payee
and their ages at the time the first payment is due.
Page 9
<PAGE>
Betterment of Rates
If at the due date of the first annuity payment, We have declared a higher rate
per $1,000 of proceeds applied under an annuity option, then the annuity
payments will be based on the higher rates.
In no event will the annuity benefit, at the time of its commencement, be less
than that which would be provided by applying the greater of the Cash Surrender
Value or 95% of the Cash Value to purchase a single premium immediate annuity
contract offered by Us or one of Our affiliates at the time to the same class of
annuitants.
Minimum Amount
The minimum amount that can be placed under an annuity option is $2,000 unless
We consent to a lesser amount.
Minimum Payment
The annuity option elected must result in a payment of at least $20.00. If at
any time payments are less than $20.00, We have the right to change the
frequency to an interval resulting in a payment of at least $20.00. If any
amount due is less than $20.00 per year, We may make other arrangements that are
equitable to the Annuitant.
Date of Payment
The first payment under any annuity option shall be made on the Annuity
Commencement Date. Subsequent payments shall be made on the same day of each
month in accordance with the manner of payment selected.
GENERAL PROVISIONS
The Contract
The entire contract between You and Us consists of the contract and all attached
pages.
Contract Changes
The only way this contract may be changed is by a written endorsement signed by
one of Our officers.
Misstatement
If You or the Annuitant's sex or date of birth was misstated, all benefits of
this contract are what the purchase payment paid would have purchased at the
correct sex and age. Proof of the Annuitant's and Your ages may be filed at any
time at Our Office.
Incontestability
We will not contest this contract from its Contract Date.
Required Reports
We will provide a report to You as often as required by law, but at least once
in each Contract Year before the due date of the first annuity payment.
Mortality and Expenses
Our actual mortality and expense experience will not affect the amount of any
annuity payments or any other values under this contract.
Non-Participating
This contract does not share in Our surplus earnings, so You will receive no
dividends under it.
Conformity with State and Federal Laws
This contract is governed by the law of the state in which it is issued for
delivery. Any paid-up annuity, Cash Surrender Value or death benefit available
under this contract will not be less than the minimum benefits required by the
statutes of that state.
Upon receiving appropriate state approval, We may at any time make any changes,
including retroactive changes, in this contract to the extent that the change is
required to meet the requirements of any law or regulation issued by any
governmental agency to which We or You are subject.
<PAGE>
LIFE ANNUITY TABLES
GUARANTEED DOLLAR AMOUNT OF THE MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTIONS 1, 2 AND 3 - SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
MALE
ADJUSTED NUMBER OF MONTHLY PAYMENTS GUARANTEED CASH
AGE NONE 120 180 240 REFUND
<S> <C> <C> <C> <C> <C>
45 3.87 3.85 3.82 3.77 3.72
46 3.93 3.90 3.87 3.82 3.77
47 3.99 3.96 3.92 3.87 3.82
48 4.05 4.02 3.98 3.92 3.87
49 4.12 4.09 4.04 3.97 3.92
50 4.19 4.15 4.10 4.03 3.98
51 4.27 4.22 4.17 4.08 4.04
52 4.34 4.30 4.23 4.14 4.10
53 4.43 4.37 4.30 4.20 4.16
54 4.51 4.45 4.37 4.26 4.23
55 4.60 4.54 4.45 4.32 4.30
56 4.70 4.62 4.53 4.39 4.37
57 4.80 4.72 4.61 4.45 4.44
58 4.91 4.82 4.69 4.51 4.52
59 5.03 4.92 4.78 4.58 4.61
60 5.15 5.03 4.87 4.65 4.69
61 5.28 5.14 4.96 4.71 4.79
62 5.43 5.27 5.06 4.78 4.88
63 5.58 5.39 5.16 4.84 4.98
64 5.74 5.53 5.26 4.90 5.09
65 5.91 5.66 5.36 4.96 5.20
66 6.10 5.81 5.46 5.02 5.32
67 6.30 5.96 5.56 5.08 5.44
68 6.51 6.12 5.66 5.13 5.56
69 6.73 6.28 5.77 5.18 5.70
70 6.97 6.44 5.86 5.23 5.84
71 7.23 6.61 5.96 5.27 5.99
72 7.51 6.79 6.05 5.31 6.14
73 7.80 6.96 6.14 5.34 6.30
74 8.12 7.14 6.23 5.37 6.47
75 8.46 7.32 6.31 5.40 6.65
</TABLE>
Dollar amounts of the monthly annuity payments for the first, second, third, and
fourth options are based on the 1983 Individual Annuitant Mortality Table A with
ages set back one year and a net investment rate of 3% per annum. The adjusted
age of the person on whose life the life annuity is based is determined from the
actual age last birthday on the due date of the first annuity payment in the
following manner:
CALENDAR YEAR IN WHICH
FIRST PAYMENT IS DUE 1995-2000 2001-2010 2011-2020 2021 & LATER
ADJUSTED AGE IS
ACTUAL AGE MINUS 0 MINUS 1 MINUS 2 MINUS 3
<PAGE>
LIFE ANNUITY TABLES
GUARANTEED DOLLAR AMOUNT OF THE MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTIONS 1, 2 AND 3 - SINGLE LIFE ANNUITIES
<TABLE>
<CAPTION>
FEMALE
ADJUSTED NUMBER OF MONTHLY PAYMENTS GUARANTEED CASH
AGE NONE 120 180 240 REFUND
<S> <C> <C> <C> <C> <C>
45 3.59 3.58 3.57 3.55 3.52
46 3.64 3.63 3.61 3.59 3.56
47 3.68 3.67 3.66 3.63 3.60
48 3.74 3.72 3.71 3.68 3.64
49 3.79 3.78 3.76 3.72 3.69
50 3.85 3.83 3.81 3.77 3.73
51 3.90 3.89 3.86 3.82 3.78
52 3.97 3.95 3.92 3.88 3.84
53 4.03 4.01 3.98 3.93 3.89
54 4.10 4.08 4.04 3.99 3.95
55 4.18 4.15 4.11 4.05 4.01
56 4.25 4.22 4.18 4.11 4.07
57 4.34 4.30 4.25 4.17 4.14
58 4.42 4.38 4.32 4.23 4.20
59 4.52 4.47 4.40 4.30 4.28
60 4.61 4.56 4.48 4.37 4.35
61 4.72 4.66 4.57 4.44 4.43
62 4.83 4.76 4.66 4.51 4.52
63 4.95 4.87 4.75 4.58 4.61
64 5.08 4.98 4.85 4.65 4.70
65 5.21 5.10 4.95 4.72 4.80
66 5.36 5.22 5.05 4.79 4.90
67 5.51 5.36 5.16 4.86 5.01
68 5.67 5.50 5.26 4.93 5.12
69 5.85 5.65 5.38 5.00 5.25
70 6.04 5.80 5.49 5.06 5.37
71 6.25 5.97 5.60 5.12 5.51
72 6.47 6.14 5.71 5.18 5.65
73 6.71 6.32 5.83 5.23 5.80
74 6.98 6.50 5.94 5.28 5.96
75 7.26 6.69 6.04 5.32 6.13
</TABLE>
Dollar amounts of the monthly annuity payments for the first, second, third, and
fourth options are based on the 1983 Individual Annuitant Mortality Table A with
ages set back one year and a net investment rate of 3% per annum. The adjusted
age of the person on whose life the life annuity is based is determined from the
actual age last birthday on the due date of the first annuity payment in the
following manner:
CALENDAR YEAR IN WHICH
FIRST PAYMENT IS DUE 1995-2000 2001-2010 2011-2020 2021 & LATER
ADJUSTED AGE IS
ACTUAL AGE MINUS 0 MINUS 1 MINUS 2 MINUS 3
<PAGE>
LIFE ANNUITY TABLES
GUARANTEED DOLLAR AMOUNT OF THE MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTION 4 - JOINT AND LAST SURVIVOR LIFE ANNUITY
<TABLE>
<CAPTION>
FEMALE AGE
MALE AGE 45 50 55 60 65 70 75
<S> <C> <C> <C> <C> <C> <C> <C>
45 3.36 3.46 3.56 3.64 3.71 3.76 3.80
50 3.42 3.56 3.69 3.82 3.93 4.01 4.08
55 3.47 3.64 3.82 3.99 4.16 4.29 4.40
60 3.51 3.70 3.92 4.15 4.39 4.61 4.79
65 3.54 3.75 4.00 4.29 4.61 4.94 5.24
70 3.56 3.78 4.07 4.41 4.80 5.25 5.70
75 3.57 3.81 4.11 4.48 4.95 5.51 6.15
</TABLE>
Dollar amounts of the monthly annuity payments for the first, second, third, and
fourth options are based on the 1983 Individual Annuitant Mortality Table A with
ages set back one year and a net investment rate of 3% per annum. The adjusted
age of the person on whose life the life annuity is based is determined from the
actual age last birthday on the due date of the first annuity payment in the
following manner:
<TABLE>
<S> <C> <C> <C> <C>
CALENDAR YEAR IN WHICH 1995-2000 2001-2010 2011-2020 2021 & LATER
FIRST PAYMENT IS DUE
ADJUSTED AGE IS MINUS 0 MINUS 1 MINUS 2 MINUS 3
ACTUAL AGE
</TABLE>
<PAGE>
ANNUITY TABLES
GUARANTEED DOLLAR AMOUNT OF THE MONTHLY ANNUITY PAYMENTS
PURCHASED WITH EACH $1,000 OF PROCEEDS APPLIED
OPTION 5-PAYMENTS FOR A DESIGNATED PERIOD
<TABLE>
<CAPTION>
NUMBER OF MONTHLY NUMBER OF MONTHLY
YEARS PAYMENT YEARS PAYMENT
AMOUNT AMOUNT
<S> <C> <C> <C>
5 17.91 18 5.96
6 15.14 19 5.73
7 13.16 20 5.51
8 11.68 21 5.32
9 10.53 22 5.15
10 9.61 23 4.99
11 8.86 24 4.84
12 8.24 25 4.71
13 7.71 26 4.59
14 7.26 27 4.47
15 6.87 28 4.37
16 6.53 29 4.27
17 6.23 30 4.18
</TABLE>
The dollar amounts of the monthly annuity payments for the fifth option are
based on a net investment rate of 3& per annum.
<PAGE>
Single Premium
Individual Modified Guaranteed Annuity Contract
Non-Tax Qualified
Non-Participating
ENDORSEMENTS
<PAGE>
DISTRIBUTION FROM A QUALIFIED RETIREMENT PLAN QUALIFICATION RIDER
The following conditions, restrictions and limitations apply to this contract if
it has been issued as an annuity contract as described in Section 401(g) of the
Internal Revenue Code.
OWNERSHIP--NON-TRANSFERABLE
You may not sell, assign, or discount this contract or pledge this contract as
collateral for a loan or as security for the performance of an obligation or for
any other purpose, to any person or organization other than Us; provided,
however, the restrictions of this provision will not apply to the Trustee of any
Trust described in Section 401(a) or the Administrator of any Annuity Plan
described in Section 403(a) of the Code. This provision supersedes any
provisions of the contract which may be inconsistent with it.
MANDATORY DISTRIBUTION RESTRICTIONS
In order to meet the qualification requirements of Code Section 401(a), all
plans must meet the required mandatory distribution rules in Code Section
401(a)(9).
Code Section 401(a)(9) states that a plan will not be qualified unless the
entire interest of each employee is distributed to such employee no later than
the "required beginning date" or over no longer than the life or life expectancy
of such employee or the lives or joint life expectancy of such employee and a
designated Beneficiary. Generally, the "required beginning date" means April 1
of the calendar year following the calendar year in which the employee attains
age 70-1/2.
If the employee dies before his/her entire interest has been distributed, the
remaining interest must be paid out at least as rapidly as under the method of
payment in effect at the time of death. If the employee dies before the
distribution of his/her entire interest has begun, the entire interest must be
distributed within five years after the employee's death or an annuity payable
over no longer than life or life expectancy must be distributed to an electing
designated Beneficiary starting within one year of the employee's death. A
spousal designated Beneficiary may elect to defer distributions until the
employee would have attained the age of 70-1/2.
ELIGIBLE ROLLOVERS AND OTHER ROLLOVERS
To the extent the Certificate Owner is eligible to make a rollover distribution
under Federal tax law, he or she may elect to have such distribution or a
portion of it paid directly to an eligible retirement plan. You must specify the
eligible retirement plan to which such distribution is to be paid in a form and
at such time acceptable to Us. Such distribution shall be made as a direct
transfer to the eligible retirement plan so specified. Contract surrender
charges and/or market value adjustments may apply to all rollovers.
Previously taxed amounts in this contract are not eligible for rollover. An
eligible rollover distribution includes generally any taxable distribution or
portion thereof from this contract except:
1. any distribution which is one of a series of substantially equal
periodic payments made not less frequently than annually and made to
the Certificate Owner for life or life expectancy or to the Certificate
Owner and his or her joint life beneficiary for joint lives or life
expectancies, or for a specified period of ten years or more, or
2. any distributions which is a required distribution as described above
under "MANDATORY DISTRIBUTION RESTRICTIONS."
An eligible retirement plan includes an individual retirement annuity or account
described in Code Section 408. It also includes a qualified retirement plan
described under Code Section 401(a) or qualified annuity plan under Code Section
403(a), provided these plans are eligible rollovers and are defined contribution
plans.
ANNUITIES DISTRIBUTED UNDER QUALIFIED PLANS
If the applicant for this contract requested that it be issued to comply with
Section 401(a) of the Code, and this contract has subsequently been transferred
to the Annuitant, the following conditions, restrictions and limitations apply
to this contract in addition to the above.
Spousal Consent
- ---------------
Death Benefit--If the Annuitant dies while the contract continues and the
- -------------
Annuitant has a spouse at the time of the Annuitant's death, We will Pay the
death benefit to a person other than the spouse of the Annuitant only if proof
of spousal consent, which meets the requirements of Section 417 of the Code, is
furnished to Us.
If the Beneficiary is not the spouse and such spousal consent is not furnished,
We will pay 50% of the death benefit to the spouse. We will pay the balance of
the death benefit to the Beneficiary.
Cash Surrender--Before the due date of the first Annuity Payment, 1) if You do
- --------------
not have a spouse and without the consent of any Beneficiary unless irrevocably
named; or, 2) if You do have a spouse then only with the written consent of Your
spouse, as required by Section 417 of the Code; We will pay to You all or any
portion of the Cash Surrender Value of the contract upon receipt of your
Written Request for it.
<PAGE>
Settlement Option-If the Annuitant is living on the Maturity Date, payment must
- -----------------
be made in accordance with Option 4 under ANNUITY OPTIONS unless you elect
another form of annuity option and furnish us a qualified election which meets
the requirements of Section 417 of the Code.
THE TRAVELERS INSURANCE COMPANY
Robert I. LPP
Chairman
<PAGE>
TAX SHELTERED ANNUITY QUALIFICATION RIDER
This endorsement is made a part of this contract in order to comply with Section
403(b) of the Internal Revenue Code. The following conditions, restrictions and
limitations apply.
OWNERSHIP - NONTRANSFERABLE
You may not sell, assign, or discount this contract or pledge this contract as
collateral for a loan or as security for the performance of an obligation or for
any other purpose, to any person or organization other than to Us. This
provision supersedes any provisions of the contract which may be inconsistent
with it.
ELECTIVE DEFERRAL CONTRIBUTION LIMITS
In order to meet the qualification requirements of Code Section 403(b), elective
deferral contributions may not exceed the limitations in effect under Code
Section 402(g).
This rule is an individual limitation that applies to all elective deferral
plans, contracts or arrangements in the aggregrate.
WITHDRAWAL RESTRICTIONS
To qualify as a contract which can defer compensation under a Code Section
403(b) plan or arrangement, the withdrawal restrictions under Code Section
403(b)(11) must be met.
Withdrawals attributable to contributions made pursuant to a salary reduction
agreement may be paid only upon or after attainment of age 59 1/2, separation
from service, death, total or permanent disability (as defined in Code Section
72(m)(7)) or in the case of hardship (as defined in the Treasury Regulations).
The hardship exception applies only to the salary reduction contribution and not
to any income attributable to such contribution.
These withdrawal restrictions apply to years beginning after December 31, 1988
but only with respect to assets other than those assets held as of the close of
the last year beginning before January 1, 1989.
If contributions attributable to a custodial account described in Section
403(b)(7) of the Code are transferred to this contract, the following
conditions, restrictions and limitations apply.
Withdrawals attributable to these transferred contributions may be paid only
upon or after attainment of age 59 1/2, separation from service, death, or total
and permanent disability (as defined in Code Section 72(m)(7)).
Withdrawals on account of hardship may be made only with respect to assets
attributable to a custodial account as of the close of the last year beginning
before January 1, 1989 and amounts contributed thereafter under a salary
reduction agreement but not to any income attributable to such contributions.
MANDATORY DISTRIBUTION REQUIREMENTS
In order to meet the qualification requirements of Code Section 403(b), all
plans must meet the required mandatory distribution rules in Code Section
401(a)(9).
Code Section 401(a)(9) states that a plan will not be qualified unless the
entire interest of each employee is distributed to such employee not later than
the "required beginning date" or over the life or life expectancy of such
employee or over the lives or joint life expectancy of such employee and a
designated Beneficiary. Generally, the "required beginning date" means April 1
of the calendar year following the calendar year in which the employee attains
age 70 1/2.
If the employee dies after annuity payments commence but before his/her entire
interest has been distributed, the remaining interest must be paid out at least
as rapidly as it was being paid out under the method of payment in effect at the
time of death. If the employee dies before annuity payments commence, the entire
interest must be distributed within five years after the employee's death or an
annuity payable over no longer than life or life expectancy must be distributed
to an electing designated Beneficiary starting within one year of the employee's
death. A spousal designated Beneficiary may elect to defer distributions until
the employee would have attained the age of 70 1/2.
ELIGIBLE ROLLOVERS
To the extent You are otherwise eligible for a distribution under this contract,
and provided the distribution is an eligible rollover distribution, You may
elect to have such distribution or a portion of it paid directly to an eligible
retirement plan. You must specify the eligible retirement plan to which such
distribution is to be paid in a form and at such time acceptable to Us. Such
distribution shall be made as a direct transfer to the eligible retirement plan
so specified. Contract surrender charges and/or market value adjustments may
apply to all rollovers.
Previously taxed amounts in this contract are not eligible for rollover. Amounts
that are rolled over are not taxed generally until later distributed. An
eligible rollover distribution includes generally any taxable distribution or
portion thereof from this contract except:
<PAGE>
a. any distribution which is one of a series of substantially equal periodic
payments made not less frequently than annually and made to You for life or
life expectancy or to You and Your joint life beneficiary for joint lives or
life expectancies, or for a specified period of 10 years or more, or
b. any distribution which is a required distribution as described above under
"MANDATORY DISTRIBUTION REQUIREMENTS".
An eligible retirement plan includes an individual retirement annuity or account
described in Code Section 408. It also includes a tax sheltered annuity plan or
arrangement under Code Section 403(b), provided it accepts eligible rollovers
and is a defined contribution plan.
If You receive a distribution that is eligible for rollover but You receive the
check directly, then mandatory income tax withholding will be taken from the
distribution. You may roll over the balance to an individual retirement annuity
or account within 60 days of receipt, and may make up the amount withheld from
other sources in the rollover in order to roll over the maximum without possible
early distribution tax penalty on the amount of the tax withholding.
ADMINISTRATIVE COMPLIANCE
If changes in the Code and related law, regulations and rulings require a
distribution greater than described above in order to keep this annuity
qualified under the Code, We will administer the contract in accordance with
these laws, regulations and rulings. We will provide you with a revised rider
describing any necessary changes, following all required regulatory approvals.
THE TRAVELERS INSURANCE COMPANY
/s/ Robert I. Lipp
Chairman
<PAGE>
PENSION/PROFIT SHARING PLAN QUALIFICATION RIDER
If You requested that this certificate be issued to comply with Section 401(a)
of the Code, the following conditions, restrictions and limitations apply to
this contract.
OWNERSHIP - NON-TRANSFERABLE
The Certificate Owner may not sell, assign, discount or pledge this certificate
as collateral for a loan or as security for the performance of an obligation or
for any other purpose, to any person or organization other than The Travelers
Insurance Company; provided, however, the restrictions of this provisions will
not apply to the Trustee of any Trust described in Section 401(a) or the
Administrator of any Annuity Plan described in Section 403(a) of the Code. This
provision supersedes any provisions of this certificate which may be
inconsistent with it.
MANDATORY DISTRIBUTION RESTRICTIONS
In order to meet the qualification requirements of Code Section 401(a), all
plans must meet the required mandatory distribution rules in Code Section
401(a)(9).
Code Section 401(a)(9) states that a plan will not be qualified unless the
entire interest of each employee is distributed to such employee not later than
the "required beginning date" or over no longer than the life or life expectancy
of such employee or the lives or joint life expectancy of such employee and a
designated Beneficiary. Generally, the "required beginning date" means April 1
of the calendar year following the calendar year in which the employee attains
age 70 1/2.
If the employee dies before his/her entire interest has been distributed, the
remaining interest must be paid out at least as rapidly as under the method of
payment in effect at the time of death. If the employee dies before the
distribution of his/her entire interest has begun, the entire interest must be
distributed within five years after the employee's death or an Annuity payable
over no longer than life or life expectancy must be distributed to an electing
designated Beneficiary starting within one year of the employee's death. A
spousal designated Beneficiary may elect to defer distributions until the
employee would have attained the age of 70 1/2.
ANNUITIES DISTRIBUTED UNDER QUALIFIED PLANS
If You requested that this certificate be issued to comply with Section 401(a)
of the Code, and this certificate has subsequently been transferred to the
Annuitant, the following conditions, restrictions and limitations apply to this
certificate in addition to the above.
Spousal Consent
- ---------------
Death Benefit - If the Annuitant dies while this certificate continues and the
- -------------
Annuitant has a spouse at the time of the Annuitant's death, we will pay the
death benefit to a person other than the current spouse of the Annuitant only if
proof of spousal consent, which meets the requirements of Section 417 of the
Code, is furnished to us.
If the Beneficiary is not the current spouse and such spousal consent is not
furnished, we will pay 50% of the death benefit to the current spouse. We will
pay the balance of the death benefit to the Beneficiary.
Cash Surrender - Before the due date of the first Annuity or Income Payment, 1)
- ---------------
if the Certificate Owner does not have a spouse and without the consent of any
Beneficiary; or, 2) if the Certificate Owner does have a current spouse then
only with the written consent of your spouse, as required by Section 417 of the
Code; we will pay to the Certificate Owner all or any portion of the Cash
Surrender Value of the certificate upon receipt of the Certificate Owner Written
Request for it.
Settlement Option - If the Annuitant is living on the Maturity Date, payment
- -----------------
must be made in accordance with Option 4 under ANNUITY OPTIONS unless the
Certificate Owner elects another form of Annuity Option and furnish us a
qualified election which meets the requirements of Section 417 of the Code.
<PAGE>
EXHIBIT 23(A)
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Pre-Effective Amendment No. 1 of this
Registration Statement on Form S-2 of our reports on the consolidated statements
of operations and retained earnings and cash flows for the years ended
December 31, 1993 and 1992 of The Travelers Insurance Company and Subsidiaries
(the "Company") dated January 24, 1994 and February 9, 1993 (except for Notes 2
and 5, as to which the date is January 24, 1994), which includes an explanatory
paragraph regarding the change in the methods of accounting for post-retirement
benefits other than pensions, income taxes and foreclosed assets in 1992, on our
audits of the consolidated financial statements of the Company. We also consent
to the reference to our Firm as experts under the caption "Independent
Accountants".
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut
May 30, 1995
<PAGE>
The Board of Directors
The Travelers Insurance Company:
We consent to the inclusion in this Pre-Effective Amendment No. 1 to the
registration statement (No. 33-89812) on Form S-2, filed by The Travelers
Insurance Company, of our reports, dated January 17, 1995, and to the reference
to our firm as experts under the heading "Independent Accountants" in the
prospectus. Our reports refer to a change in accounting for investments in
accordance with the provisions of Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities."
KPMG PEAT MARWICK LLP
Hartford, Connecticut
June 2, 1995
<PAGE>
Exhibit 24
MODIFIED GUARANTEED ANNUITY CONTRACTS
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Robert I. Lipp of Scarsdale, New York, director of The Travelers
Insurance Company (hereafter the "Company"), do hereby make, constitute and
appoint JAY S. FISHMAN, Director and Chief Financial Officer of said Company,
and ERNEST J. WRIGHT, Assistant Secretary of said Company, or either one of them
acting alone, my true and lawful attorney-in-fact, for me, and in my name, place
and stead, to sign registration statements on behalf of said Company on Form S-2
or other appropriate form under the Securities Act of 1933 for Modified
Guaranteed Annuity Contracts to be offered by the Company and further, to sign
any and all amendments thereto, including post-effective amendments, that may be
filed by the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 26th day of April,
1995.
/s/Robert I. Lipp
Director
The Travelers Insurance Company
<PAGE>
MODIFIED GUARANTEED ANNUITY CONTRACTS
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Charles O. Prince, III of Weston, Connecticut, director of The
Travelers Insurance Company (hereafter the "Company"), do hereby make,
constitute and appoint JAY S. FISHMAN, Director and Chief Financial Officer of
said Company, and ERNEST J. WRIGHT, Assistant Secretary of said Company, or
either one of them acting alone, my true and lawful attorney-in-fact, for me,
and in my name, place and stead, to sign registration statements on behalf of
said Company on Form S-2 or other appropriate form under the Securities Act of
1933 for Modified Guaranteed Annuity Contracts to be offered by the Company and
further, to sign any and all amendments thereto, including post-effective
amendments, that may be filed by the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 26th day of April,
1995.
/s/Charles O. Prince, III
Director
The Travelers Insurance Company
<PAGE>
MODIFIED GUARANTEED ANNUITY CONTRACTS
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Marc P. Weill of New York, New York, director of The Travelers
Insurance Company (hereinafter the "Company"), do hereby make, constitute and
appoint JAY S. FISHMAN, Director and Chief Financial Officer of said Company,
and ERNEST J. WRIGHT, Assistant Secretary of said Company, or either one of them
acting alone, my true and lawful attorney-in-fact, for me, and in my name, place
and stead, to sign registration statements on behalf of said Company on Form S-2
or other appropriate form under the Securities Act of 1933 for Modified
Guaranteed Annuity Contracts to be offered by the Company and further, to sign
any and all amendments thereto, including post-effective amendments, that may be
filed by the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of November,
1994.
/s/Marc P. Weill
Director
The Travelers Insurance Company
<PAGE>
MODIFIED GUARANTEED ANNUITY CONTRACTS
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Irwin R. Ettinger of Stamford, Connecticut, director of The
Travelers Insurance Company (hereinafter the "Company"), do hereby make,
constitute and appoint JAY S. FISHMAN, Director and Chief Financial Officer of
said Company, and ERNEST J. WRIGHT, Assistant Secretary of said Company, or
either one of them acting alone, my true and lawful attorney-in-fact, for me,
and in my name, place and stead, to sign registration statements on behalf of
said Company on Form S-2 or other appropriate form under the Securities Act of
1933 for Modified Guaranteed Annuity Contracts to be offered by the Company and
further, to sign any and all amendments thereto, including post-effective
amendments, that may be filed by the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 26th day of April,
1995.
/s/Irwin R. Ettinger
Director
The Travelers Insurance Company
<PAGE>
MODIFIED GUARANTEED ANNUITY CONTRACTS
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, MICHAEL A. CARPENTER of Greenwich, Connecticut, Director, President
and Chief Executive Officer, of The Travelers Insurance Company (hereinafter the
"Company"), do hereby make, constitute and appoint JAY S. FISHMAN, Director and
Chief Financial Officer of said Company, and ERNEST J. WRIGHT, Assistant
Secretary of said Company, or either one of them acting alone, my true and
lawful attorney-in-fact, for me, and in my name, place and stead, to sign
registration statements on behalf of said Company on Form S-2 or other
appropriate form under the Securities Act of 1933 for Modified Guaranteed
Annuity Contracts to be offered by the Company and further, to sign any and all
amendments thereto, including post-effective amendments, that may be filed by
the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of June, 1995.
/s/Michael A. Carpenter
Director, President and Chief Executive Officer
The Travelers Insurance Company
<PAGE>
MODIFIED GUARANTEED ANNUITY CONTRACTS
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
That I, Donald T. DeCarlo of Douglaston, New York, director of The
Travelers Insurance Company (hereinafter the "Company"), do hereby make,
constitute and appoint JAY S. FISHMAN, Director and Chief Financial Officer of
said Company, and ERNEST J. WRIGHT, Assistant Secretary of said Company, or
either one of them acting alone, my true and lawful attorney-in-fact, for me,
and in my name, place and stead, to sign registration statements on behalf of
said Company on Form S-2 or other appropriate form under the Securities Act of
1933 for Modified Guaranteed Annuity Contracts to be offered by the Company and
further, to sign any and all amendments thereto, including post-effective
amendments, that may be filed by the Company on behalf of said registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of April,
1995.
/s/Donald T. DeCarlo
Director
The Travelers Insurance Company
<PAGE>
MODIFIED GUARANTEED ANNUITY CONTRACTS
POWER OF ATTORNEY
-----------------
KNOW ALL MEN BY THESE PRESENTS:
That I, Christine B. Mead of Avon, Connecticut, Vice President and
Controller of The Travelers Insurance Company (hereinafter the "Company"), do
hereby make, constitute and appoint JAY S. FISHMAN, Director and Chief Financial
Officer of said Company, and ERNEST J. WRIGHT, Assistant Secretary of said
Company, or either one of them acting alone, my true and lawful attorney-in-
fact, for me, and in my name, place and stead, to sign registration statements
on behalf of said Company on Form S-2 or other appropriate form under the
Securities Act of 1933 for Modified Guaranteed Annuity Contracts to be offered
by the Company and further, to sign any and all amendments thereto, including
post-effective amendments, that may be filed by the Company on behalf of said
registrant.
IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of June, 1995.
/s/Christine B. Mead
Vice President and Controller
The Travelers Insurance Company
