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Registration Statement No. 333-10933
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 1
to
FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE TRAVELERS INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
CONNECTICUT
(State or other jurisdiction of incorporation or organization)
I.R.S. Employer Identification Number: 06-0566090
One Tower Square, Hartford, Connecticut 06183 (860) 277-0111
(Address, including Zip Code, and Telephone Number, including Area Code,
of Registrant's Principal Executive Offices)
Ernest J. Wright
Secretary
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
(860) 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 investment
option interests 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. / /
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Action registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering / /.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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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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Item
No. Form S-2 Caption Heading in Prospectus
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<S> <C>
1. Forepart of the Registration Outside Front Cover Page 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; Incorporation
the Registrant of Certain Documents 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
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PROSPECTUS
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THE TRAVELERS INSURANCE COMPANY
REGISTERED FIXED ACCOUNT OPTION
FOR USE WITH GROUP ANNUITY CONTRACTS
This prospectus describes the Fixed Account Option available under group
variable annuity contracts (hereinafter the "contract" or "contracts") which are
issued by The Travelers Insurance Company (the "Company") as a companion
contract to the variable annuity contracts, currently those funded by The
Travelers Separate Account QP for Variable Annuities (the "Separate Account").
The Company may, in the future, offer the Fixed Account option to additional
contracts funded through other separate accounts. The Separate Account in turn
purchases shares in certain underlying mutual funds. The underlying mutual funds
are described in the Mutual Fund Prospectuses. The specific features of the
Contract and the Separate Account are disclosed in greater detail in the
Contract Prospectus. This prospectus must be accompanied by and read in
conjunction with the Contract Prospectus and the Mutual Fund Prospectuses.
The group annuity contracts may be issued to Contract Owners on an unallocated
or allocated basis.
During the Accumulation Period, Purchase Payments to the contract and/or to
Participants' Individual Accounts under the contract may be allocated, in whole
or in part, to the Fixed Account Option or to one or more of the Separate
Account Options. Contract values allocated to the Fixed Account Option are
credited with interest at a rate at least equal to the guaranteed interest rate
stated in the Contract. Rates of interest in excess of the applicable Guaranteed
Interest Rate may be declared by the Company from time to time. (See "Declared
Interest Rates" page 7.)
While the Mortality and Expense Risk Charge and annual Contract charges
applicable to the values held in Separate Account options do not apply to the
Fixed Account Option, all other charges described in the accompanying contract
prospectus, including any sales charges, transfer charges and premium taxes,
apply equally to values held in the Fixed Account Option.
Distributions and transfers from the Fixed Account Option are generally made
within a reasonable period of time after a request is received and reflect the
full value of Participants' Individual Accounts allocated to the Fixed Account
Option less any applicable charges. However, under certain conditions transfers
may be limited or deferred (see "Transfers from the Fixed Account Option," page
8) and distributions may be deferred or subject to a market value adjustment.
(See "Surrenders," page 8.)
PLEASE READ THIS PROSPECTUS AND KEEP IT FOR FUTURE REFERENCE. IT IS ACCOMPANIED
BY CURRENT PROSPECTUSES FOR THE RELATED GROUP VARIABLE ANNUITY CONTRACT AND THE
SEPARATE ACCOUNT OPTIONS THEREUNDER.
THESE SECURITIES MAY BE SUBJECT TO A SALES CHARGE AND MARKET VALUE ADJUSTMENT
WHICH COULD RESULT IN YOUR RECEIPT OF LESS THAN THE TOTAL OF YOUR PURCHASE
PAYMENT(S). SEE "SURRENDERS," PAGE 8.
THE COMPANY CANNOT PREDICT NOR GUARANTEE FUTURE DECLARED INTEREST RATES IN
EXCESS OF THE CONTRACTUALLY GUARANTEED RATE.
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 LOSS OF PRINCIPAL INVESTMENT.
PROSPECTUS DATED MAY 1, 1997
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AVAILABLE INFORMATION
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The Company is subject to the informational requirements of the Securities
Exchange Act of 1934 (the "1934 Act"), as amended, and in accordance therewith
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, NW, Washington, DC and at the Commission's Regional Offices
located at 75 Park Place, New York, New York and Northwestern Atrium Center, 500
West Madison Street, Suite 140Q, Chicago, Illinois 60661-2511. Copies of such
materials also can be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, NW, Washington, DC 20549, at prescribed rates.
The Company has filed a registration statement (the "Registration Statement")
with the Commission under the Securities Act of 1933 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 exhibits thereto, and reference is hereby made to
such Registration Statement and exhibits for further information relating to the
Company and the contracts. Although the Company does furnish the Annual Report
on Form 10-K for the year ended December 31, 1996 to owners of contracts, the
Company does not plan to furnish subsequent annual reports containing financial
information to the owners of contracts described in this prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
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The Annual Report on Form 10-K for the year ended December 31, 1996 has been
filed by the Company with the Commission pursuant to Section 15(d) of the 1934
Act is incorporated by reference into this prospectus and must accompany this
prospectus. The Company's Form 10-K was filed on March 26, 1997. All filings
were made via Edgar, File No. 33-33691.
Any statement contained in a document incorporated by reference herein shall be
deemed modified or superseded hereby to the extent that a statement contained in
a later-filed document or herein shall modify or supersede such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of the prospectus.
If requested, the Company will furnish, without charge, to each person to whom a
copy of this prospectus is delivered, a copy of the document referred to above
which has been incorporated by reference in the prospectus, other than exhibits
to such document (unless such exhibits are specifically incorporated by
reference in the prospectus). Requests for such document should be directed to
The Travelers Insurance Company, One Tower Square, Hartford, Connecticut 06183
Attn: Annuity Services.
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TABLE OF CONTENTS
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PAGE
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GLOSSARY OF SPECIAL TERMS............................................................. 4
SUMMARY............................................................................... 6
INTRODUCTION.......................................................................... 7
THE FIXED ACCOUNT OPTION.............................................................. 7
A. The Accumulation Period.......................................................... 7
1. Purchase Payments............................................................. 7
2. Declared Interest Rates....................................................... 7
3. Cash Values................................................................... 8
4. Transfers from the Fixed Account Option....................................... 8
5. Transfers to the Fixed Account Option......................................... 8
6. Surrenders.................................................................... 8
(a) General................................................................... 8
(b) Payment of Full or Partial Surrenders..................................... 8
(c) Contract Termination...................................................... 9
B. Annuity Period................................................................... 10
INVESTMENTS BY THE COMPANY............................................................ 10
DISTRIBUTION OF CONTRACTS............................................................. 11
FEDERAL INCOME TAX CONSIDERATIONS..................................................... 11
A. Taxation of the Company.......................................................... 11
B. Information Regarding the Contracts.............................................. 11
THE COMPANY........................................................................... 11
LEGAL OPINION......................................................................... 11
EXPERTS............................................................................... 12
FINANCIAL STATEMENTS
</TABLE>
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GLOSSARY OF SPECIAL TERMS
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ACCUMULATION PERIOD: The period before the commencement of annuity payments.
ANNUITANT: A Participant on whose life Annuity payments are to be made under a
contract.
ANNUITY: Payment of income for a stated period or amount.
ANNUITY COMMENCEMENT DATE: The date on which Annuity payments are to begin.
ANNUITY PERIOD: The period following the commencement of Annuity payments.
CASH SURRENDER VALUE: The Cash Value less any amounts deducted upon surrender
and any applicable premium tax.
CASH VALUE: The Purchase Payment(s) plus all interest earned, minus all
surrenders, charges and applicable premium taxes previously deducted.
COMPETING FUND: Any investment option under the Plan, which in our opinion,
consists primarily of fixed income securities and/or money market instruments.
CONTRACT OWNER: The employer or entity owning the contract.
CONTRACT YEAR: A period of 12 months commencing with the effective date of the
contract or with any anniversary thereof.
DECLARED INTEREST RATE(S): One or more rates of interest which may be declared
by the Company. Such rates will never be less than the guaranteed interest rate
stated in the contract and may apply to some or all of the values under the
Fixed Account Option for periods of time determined by the Company.
FIXED ACCOUNT OPTION: An annuity option which does not vary with the investment
experience of a Separate Account as described in this Prospectus.
GENERAL ACCOUNT: The General Account of the Company that holds values
attributable to the Fixed Account Option.
GUARANTEE PERIOD: The period between the initial Premium Payment or Renewal Date
and the Maturity Date during which a Guaranteed Interest Rate is credited.
HOME OFFICE: The Travelers Insurance Company (sometimes referred to as the
"Company") located at One Tower Square, Hartford, Connecticut 06183.
IN WRITING: A written form satisfactory to us and received at our Home Office.
MARKET VALUE ADJUSTMENT: The Market Value Adjustment reflects the relationship,
at the time of surrender, between the rate of interest credited to funds on
deposit under the Fixed Account Option at the time of discontinuance to the rate
of interest credited on new deposits at the time of discontinuance.
MARKET ADJUSTED VALUE: The value of amounts held in the Fixed Account Option
plus or minus the result of the Market Value Adjustment.
PARTICIPANT: An eligible person who is a member in a tax qualified Plan under
Sections 401(k), 403(b) or 457 of the Internal Revenue Code of 1986, as amended
(the "Code").
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PARTICIPANT'S INDIVIDUAL ACCOUNT: An account to which amounts are credited to a
Participant or Beneficiary under the contract.
PREMIUM TAX: A tax charged by a state or municipality on premiums, Purchase
Payments or contract values.
PURCHASE PAYMENT: The premium payment applied to the Contract.
SALES CHARGE: Any applicable surrender charge or contingent deferred sales
charge, as defined in the Contract.
SEPARATE ACCOUNT: The Travelers Separate Account QP for Variable Annuities.
SEPARATE ACCOUNT OPTION: An annuity option which varies with the investment
experience of a separate account, i.e., The Travelers Separate Account QP for
Variable Annuities.
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SUMMARY
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This prospectus describes the Fixed Account Option available as a companion
contract with a group variable annuity contracts designed for use in conjunction
with qualified pension and profit-sharing plans, tax-deferred annuity plans (for
public school teachers and employees and employees of certain other tax-exempt
and qualifying employers) and deferred compensation plans of state and local
governments and nonqualified deferred compensation plans. The contracts are
issued by The Travelers Insurance Company (the "Company") with respect to the
Separate Account QP, and Purchase Payments to the Fixed Account Option become a
part of the General Account of the Company. Purchase Payments to the contracts
may also be allocated to one or more Separate Account Options. The contracts and
the Separate Account Options are described in separate prospectuses. The
prospectuses for the applicable contract and underlying mutual funds will always
accompany this prospectus. Please read them and this prospectus carefully.
During the Accumulation Period, the Fixed Account Option provides for Purchase
Payments to be credited with an initial interest rate for a 12-month period. For
contracts issued in connection with a plan established pursuant to either
Section 401 or Section 457 of the Code, the initial rate will be declared each
calendar quarter. For those issued in connection with a plan established
pursuant to Section 403(b) of the Code or a combination plan established
pursuant to Sections 403(b)/401 of the Code, the initial rate will be declared
monthly. At the end of the 12-month guarantee period, a renewal interest rate
(of at least 3%) will be determined by the Company. At the end of the initial
guarantee period, the first renewal rate will be guaranteed to the end of the
calendar year. The second and all subsequent renewal rates will be declared each
January 1 thereafter, and will be guaranteed through December 31 of that year.
The rates of interest credited will affect a contract or account's Cash Value
(see "Cash Values," page 8). Such rates may also be used to determine amounts
payable upon termination of the contracts. (See "Surrenders -- Contract
Termination," page 9.)
Generally, the Company intends to invest the Fixed Account Option assets
attributable to the contracts in investment-grade securities. The Company has no
specific formula for determining the rates of interest that it will establish as
initial interest rates or renewal interest rates. However, such determination
will generally be reflective of interest rates available on the types of debt
instruments in which the Company intends to invest the proceeds attributable to
the Fixed Account Option. (See "Investments by the Company," page 10.) In
addition, the Company's management may also consider various other factors in
determining these rates for a given period, including regulatory and tax
requirements; sales commission and administrative expenses borne by the Company;
general economic trends; and competitive factors. (See "Investments by the
Company," page 10.)
The Contract Owner may, during the Accumulation Period, allocate all or a
portion of a contract or account's Cash Value held under the Fixed Account
Option to one or more of the investment options of the Separate Account. No
Sales Charges will be deducted on such transfers. However, there are
restrictions which may limit the amount that may be so allocated and transfers
may be deferred in certain cases. (See "Transfers from the Fixed Account," page
8.) Distributions and transfers from the Fixed Account Option are processed on a
last-in, first-out basis. The cash surrender value will be determined as of the
next valuation date following receipt of a written request. The Company reserves
the right to defer payment of the Fixed Account Option for up to six months from
the date of the written request. If a payment is deferred for more than 30 days
from the date the request is received, we will pay a minimum interest rate of 3%
on the amount.
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INTRODUCTION
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This prospectus has been designed to provide you with the necessary information
to make a decision on allocating amounts to the Fixed Account Option under
contracts issued in conjunction with Separate Account QP. This prospectus
describes only the elements of the contracts pertaining to the Fixed Account
Option. The contracts also contain various Separate Account Options. The
contracts and the Separate Account Options are described in a separate
prospectus which must accompany this prospectus. Please read that prospectus and
its Glossary of Special Terms prior to reading this prospectus to familiarize
yourself with the terms being used which, unless defined in the Glossary of
Special Terms to this prospectus, have the same meaning as defined in that
prospectus.
THE FIXED ACCOUNT OPTION
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The Fixed Account Option is available only if a variable annuity contract
(Separate Account QP) issued by the Company is purchased. The contracts provide
for both an Accumulation Period and an Annuity Period. During the Accumulation
Period, Purchase Payments made by the Employer and/or Trustee to the Fixed
Account, and the values attributable thereto, are a part of the Company's
general account. During the Annuity Period, such values are used to purchase
Fixed or Variable Annuities. The operation of the contract during the Annuity
Period is described in the contract prospectus accompanying this prospectus.
A. THE ACCUMULATION PERIOD
1. Purchase Payments
During the Accumulation Period under the contracts, Purchase Payments (less any
premium taxes), may be allocated, in whole or in part, to the Fixed Account
Option.
2. Declared Interest Rates of the Initial and Subsequent Renewal Periods
The Fixed Account Option provides for an initial interest rate for a 12-month
period. For contracts issued in connection with a plan established under
Sections 401(k) or 457 of the Code, initial interest rates will be declared each
calendar quarter. For those issued in connection with a plan established under
Section 403(b) or combination contracts under Section 403(b)/401, initial
interest rates will be declared monthly. At the end of the 12-month guarantee
period, a renewal interest rate will be determined. The rate will never be less
than 3%. At the end of the initial guarantee period, the first renewal rate will
be guaranteed to the end of that calendar year. The second and all future
renewal rates will be declared each subsequent January 1 and guaranteed through
December 31 of each year.
Interest rates will be established periodically by the Company. These rates may
apply to some or all of the values under the Fixed Account Option for periods of
time determined by the Company. FOR EXAMPLE, THE COMPANY COULD DETERMINE TO
DECLARE AN INTEREST RATE IN EXCESS OF THE OTHERWISE APPLICABLE INITIAL INTEREST
RATE(S) FOR A NINE-MONTH PERIOD AND WHICH ARE APPLIED ONLY TO CASH VALUES
ATTRIBUTABLE TO PURCHASE PAYMENTS RECEIVED IN A PARTICULAR TIME PERIOD. The
rates of interest credited will affect the Cash Value of the contract or account
(see "Cash Values," below) and are used to determine amounts payable upon
termination of the contracts (see "Surrenders -- Contract Termination," page 9).
The Company will provide written notification of any such interest rate and the
values to which it will apply.
The interest rates are compounded, that is, all interest earned is credited
daily.
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The Company has no specific formula for determining the rate(s) of interest that
it will declare. However, such determination will be reflective of interest
rates available on the types of debt instruments in which the Company intends to
invest the proceeds attributable to the Fixed Account Option (see "Investments
by the Company," page 10). In addition, the Company's management may also
consider various other factors in determining interest rates for a given period,
including regulatory and tax requirements; sales commission and administrative
expenses borne by the Company; general economic trends; and competitive factors.
THE COMPANY'S MANAGEMENT WILL MAKE THE FINAL DETERMINATION AS TO ANY DECLARED
INTEREST RATES AND ANY INTEREST IN EXCESS OF THE GUARANTEED RATE OF 3%. THE
COMPANY CANNOT PREDICT NOR GUARANTEE THE RATES OF ANY FUTURE DECLARED INTEREST
IN EXCESS OF 3%.
3. Cash Values
Amounts held under the Fixed Account Option are credited with interest at rates
at least equal to the guaranteed interest rate of 3.0%. Purchase Payments are
allocated to the Fixed Account Option as of the close of business on the day the
Company receives the Purchase Payment at its Home Office. Therefore, Purchase
Payments begin earning interest the day after the Company receives the Purchase
Payment in good order. Interest is credited daily.
4. Transfers from the Fixed Account
The Contract Owner may transfer Cash Values held in the Fixed Account Option to
one or more of the Separate Account Options under the contract. The charges for
transfers are described in the contract prospectus which accompanies this
prospectus. No deduction is made for Sales Charges when a transfer is made. All
transfers will be made on a last-in, first-out basis; that is, that portion of
the Cash Value attributable to older Purchase Payments or transfers will be
transferred only after the portion attributable to the most recent Purchase
Payment or transfer has been transferred.
The Company reserves the right to limit any transfer in any calendar year to 20%
of the Cash Value under the Fixed Account Option under the contract (for an
unallocated contract) or certificate (for an allocated contract) as of the end
of the preceding calendar year. (See also "Surrenders," page 8.)
Transfers of assets presently held in the Fixed Account Option, or which were
held in the Fixed Account Option at any time during the preceding three (3)
month period, to any Competing Fund(s) are prohibited. Similarly prohibited are
transfers to the Fixed Account Option of assets presently held in any Competing
Fund(s), or which were held in any Competing Fund(s) or the Fixed Account Option
at any time during the preceding three (3) months.
5. Transfers to the Fixed Account
Values held in a Separate Account Option (other than the Competing Fund(s)) may
be transferred to the Fixed Account Option at any time. The charges for
transfers are described in the contract prospectus which accompanies this
prospectus. No deduction is made for Sales Charges when a transfer is made.
6. Surrenders
(A) GENERAL
Subject to the termination provisions described below, the Contract Owner may
request a full or partial surrender of Cash Values at any time from the Fixed
Account Option.
(B) PAYMENT OF FULL OR PARTIAL SURRENDERS
In the event of a partial surrender of Cash Values from the Fixed Account
Option, the Company will pay the requested value less any applicable Sales
Charges. All partial surrenders will be made on a last-in, first-out basis; that
is, that portion attributable to the most recent Purchase Payment
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(or transfer) will be surrendered first. In the event of a full surrender of
amounts held under an allocated account, the Company will pay the Cash Value
less any applicable Premium Tax not previously deducted, the administrative
charge, and any Sales Charges, as applicable. PLEASE CONSULT THE ACCOMPANYING
ANNUITY CONTRACT PROSPECTUS FOR ANY APPLICABLE SALES CHARGES.
(C) CONTRACT TERMINATION
If the Contract is discontinued, no further Purchase Payments or transfers will
be allowed. On the date we receive a written request to terminate the contract,
or within 31 days after we notify you of our intent to terminate the contract,
any amounts transferred from the Fixed Account Option to the Separate Account
Options during the previous 30 days from the date of discontinuance will be
transferred back to the Fixed Account Option.
If the Contract is discontinued because of Plan termination, due to the
dissolution or liquidation of the employer under US Code Title 11 procedures,
the Cash Surrender Value will be distributed directly to the employees entitled
to share in such distributions. Distribution may be in the form of cash
payments, annuity options or deferred annuities. This provision does not apply
to plans established pursuant to Section 457 of the Code.
If the Contract Owner requests a full surrender of the contract or of all
contract values held in the Fixed Account Option for reasons other than listed
above; or if the Company discontinues the contract, the Company will determine
the Market Adjusted Value of the Fixed Account Option.
The amount payable to the Contract Owner if a Contract is discontinued may be
adjusted down by the application of the Market Value Adjustment formula. The
formula is the following:
Market Adjusted Value = Cash Value X (1 + R0)(5)/(1 + R1 + .0025)(5)
Where:
R0 is the rate of interest credited to funds on deposit under the
Fixed Account Option at the time of termination,
R1 is the rate of interest credited on new deposits for this class of
contracts at the time of termination.
If, as of the date of discontinuance, the Market Adjusted Value is less than the
Cash Value of the Fixed Account Option, the Contract Owner may select one of the
two methods of payment, as described below:
1) the Market Adjusted Value (less any applicable Sales Charge) in one lump
sum within 60 days of the date of discontinuance, or
2) The Cash Surrender Value of the Fixed Account Option in installments
over a 5-year period. The amount deducted on Surrender, if any, is
determined as of the date of discontinuance, and will apply to all
installment payments. Interest will be credited to the remaining Cash
Value of the Fixed Account Option during this installment period at a
fixed effective annual interest rate of not less than 3%. The first
payment will be made no later than 60 days following the Contract
Owner's request for surrender or our written notification of our intent
to discontinue the contract. The remaining payments will be mailed on
each anniversary of the discontinuance for four years. During that
period, no additional surrenders are allowed.
If, as of the date of discontinuance, the Market Adjusted Value is greater than
the Cash Value of the Fixed Account Option, the Contract Owner may select one of
the two methods of payment, as described below:
1) the Cash Surrender Value of the Fixed Account Option, in one lump sum
within 60 days of the date of discontinuance, or
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2) The Cash Value of the Fixed Account Option in installments over a 5-year
period. Interest will be credited to the remaining Cash Value of the
Fixed Account Option during this installment period at a fixed effective
annual interest rate of not less than 3%. The first payment will be made
no later than 60 days following the Contract Owner's request for
surrender or our written notification of our intent to discontinue the
contract. The remaining payments will be mailed on each anniversary of
the discontinuance for four years. During that period, no additional
surrenders are allowed.
B. ANNUITY PERIOD
Annuity payments will normally be made within fifteen business days after the
receipt of claim for settlement or any other later specified date, and
subsequent payments will be made periodically on the anniversaries of the first
payment.
The Separate Account contract prospectus describes more fully the Annuity Period
and annuity options under the contracts. It should be noted, however, that once
fixed Annuity payments have commenced, no surrender of the annuity benefit can
be made for the purpose of receiving a lump sum settlement in lieu thereof.
INVESTMENTS BY THE COMPANY
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Fixed Account 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 General Account assets
of the Company would be available to meet the Company's guarantee under the
Fixed Account Option. The proceeds from the Fixed Account Option will become
part of the Company's general assets and are available to fund the claims of all
classes of customers of the Company.
In establishing Declared Interest Rates, the Company intends to take into
account the yields available on the instruments in which it intends to invest
the assets attributable to the contracts. (See "Declared Interest Rates," page
7.) The Company's investment strategy with respect to the assets attributable to
the Fixed Account Option under the contracts will generally be to invest in
investment-grade debt instruments including:
- Securities issued by the United States Government or its agencies or
instrumentalities, which issues may or may not be guaranteed by the United
States Government;
- Debt securities which have investment grade, at the time of purchase,
within the four highest grades assigned by Moody's Investors Services,
Inc. (Aaa, Aa, A or Baa), Standard & Poor's Corporation (AAA, AA, A or
BBB) or any other nationally recognized rating service; and
- Other debt instruments, including but not limited to, issues of or
guaranteed by banks or bank holding companies and of corporations which
obligations, although not rated by Moody's or Standard & Poor's, are
deemed by Company management to have an investment quality comparable to
securities which may be purchased as stated above.
WHILE THE FOREGOING GENERALLY DESCRIBES THE COMPANY'S INVESTMENT STRATEGY, THE
COMPANY IS NOT OBLIGATED TO INVEST THE ASSETS ATTRIBUTABLE TO THE CONTRACTS
ACCORDING TO ANY PARTICULAR STRATEGY, EXCEPT AS MAY BE REQUIRED BY CONNECTICUT
AND OTHER STATE INSURANCE LAWS AND THE COMPANY HAS THE RIGHT TO ALTER THIS
EXPECTED STRATEGY CONSISTENT WITH APPLICABLE LAW.
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DISTRIBUTION OF CONTRACTS
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Tower Square Securities, Inc. ("Tower Square") is the principal underwriter of
the Contracts. Tower Square is registered with the Securities and Exchange
Commission under the Securities Exchange Act of 1934 as a broker-dealer, and is
a member of the National Association of Securities Dealers, Inc. Tower Square is
an indirect wholly owned subsidiary of the Company. It is anticipated that an
affiliated broker dealer will become the principal underwriter in 1997.
Tower Square may enter into Distribution Agreements with certain broker-dealers
registered under the Securities Exchange Act of 1934. 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 Contracts and certificates to members of certain other eligible groups
through trusts or otherwise. The Company will pay a maximum commission of 5%. In
the future, the Company may pay a commission on an election of a subsequent
guarantee period by a Participant or an Owner.
FEDERAL INCOME TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
A. TAXATION OF THE COMPANY
The Company is taxed as a life insurance company under Part I of Subchapter L of
the Code. The assets underlying the Fixed Account Option under the contracts
will be owned by the Company. The income earned on such assets will be the
Company's income.
B. INFORMATION REGARDING THE CONTRACTS
The tax treatment of Purchase Payments and distributions is briefly described in
the accompanying Contract Prospectus.
THE COMPANY
- --------------------------------------------------------------------------------
The Travelers Insurance Company (the "Company") is an indirect wholly owned
subsidiary of Travelers Group Inc., a financial services holding company. 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 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 principal
executive office is located at One Tower Square, Hartford, Connecticut 06183,
telephone number (860) 277-0111.
LEGAL OPINION
- --------------------------------------------------------------------------------
Legal matters in connection with federal laws and regulations affecting the
issue and sale of the Fixed Account Option described in this Prospectus and the
organization of the Company, its authority to issue such Contracts under
Connecticut law, and the validity of the forms such Contracts under Connecticut
law have been passed on by the General Counsel of the Company.
11
<PAGE> 15
EXPERTS
- --------------------------------------------------------------------------------
The consolidated financial statements and schedules of the Travelers Insurance
Company and Subsidiaries as of December 31, 1996 and 1995, and for each of the
years in the three-year period ended December 31, 1996, have been incorporated
by reference herein and in the registration statement in reliance upon the
reports of KPMG Peat Marwick LLP, independent certified public accountants,
incorporated by reference herein, and upon the authority of said firm as experts
in accounting and auditing.
12
<PAGE> 16
THE TRAVELERS INSURANCE COMPANY
REGISTERED FIXED ACCOUNT OPTION
FOR USE WITH GROUP ANNUITY CONTRACTS
L-12673 5/97
<PAGE> 17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Registration Fees: $68,965.52 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> 18
Item 16. Exhibits
<TABLE>
<CAPTION>
(a) Exhibits
<S> <C>
1. Not Applicable.
2. None
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)(1) to the Registration Statement on Form S-2,
File No. 33-58677 filed via Edgar on April 18, 1995.)
4. Contracts. (Incorporated herein by reference to Exhibit 4 to the Registration Statement on Form
S-2, filed August 28, 1996.)
5. Opinion Re: Legality, Including Consent.
10. None.
23(a). Consent of KPMG Peat Marwick LLP, Independent Certified Public Accountants.
23(b). Consent of Counsel (see Exhibit 5).
24. Powers of Attorney authorizing Ernest J. Wright or Kathleen A. McGah as signatory for Michael A.
Carpenter, Jay S. Benet, George C. Kokulis, Robert I. Lipp, Katherine M. Sullivan, Marc P. Weill
and Ian R. Stuart. (Incorporated herein by reference to Exhibit 24 to the Registration
Statement on Form S-2, filed August 28, 1996.)
27. Financial Data Schedule.
</TABLE>
<PAGE> 19
Item 17. Undertakings
The undersigned registrant hereby undertakes as follows, pursuant to Item 512(a)
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.
The undersigned registrant hereby undertakes as follows, pursuant to Item 512(h)
of Regulation S-K:
(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 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> 20
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 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 April 11,
1997.
THE TRAVELERS INSURANCE COMPANY
(Registrant)
By: *Ian R. Stuart
-----------------------------------------------
Ian R. Stuart, Director
Senior Vice President, Chief Financial Officer,
Chief Accounting Officer and Controller
Pursuant to the requirements of the Securities Act of 1933, this amendment to
this registration statement has been signed by the following persons in the
capacities indicated on April 11, 1997.
<TABLE>
<S> <C>
*MICHAEL A. CARPENTER Director and Chairman of the Board, President
- ---------------------------------- and Chief Executive Officer
(Michael A. Carpenter)
*JAY S. BENET Director
- ----------------------------------
(Jay S. Benet)
*GEORGE C. KOKULIS Director
- ----------------------------------
(George C. Kokulis)
*ROBERT I. LIPP Director
- ----------------------------------
(Robert I. Lipp)
*KATHERINE M. SULLIVAN Director, Senior Vice President and
- ---------------------------------- General Counsel
(Katherine M. Sullivan)
*MARC P. WEILL Director
- ----------------------------------
(Marc P. Weill)
*IAN R. STUART Director, Senior Vice President, Chief
- ---------------------------------- Financial Officer, Chief Accounting
(Ian R. Stuart) Officer and Controller
</TABLE>
*By: Ernest J. Wright, Attorney-in-Fact
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
- ------- ----------- ----------------
<S> <C> <C>
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. (Incorporated herein by reference to Exhibit 4 to
the Registration Statement on Form S-2, filed August 28, 1996.)
5. Opinion Re: Legality, Including Consent. Electronically
23(a). Consent of KPMG Peat Marwick LLP, Independent Electronically
Certified Public Accountants.
23(b). Consent of Counsel (see Exhibit 5). Electronically
24. Powers of Attorney authorizing Ernest J. Wright or
Kathleen A. McGah as signatory for Michael A.
Carpenter, Jay S. Benet, George C. Kokulis, Robert I.
Lipp, Katherine M. Sullivan, Ian R. Stuart, Mark P.
Weill and Ian R. Stuart. (Incorporated herein by reference
to Exhibit 24 to the Registration Statement on Form S-2,
filed August 28, 1996.)
27. Financial Data Schedule of The Travelers Insurance Company. Electronically
[LOGO]
</TABLE>
<PAGE> 1
(or transfer) will be surrendered first. In the event of a full surrender of
amounts held under an allocated account, the Company will pay the Cash Value
less any applicable Premium Tax not previously deducted, the administrative
charge, and any Sales Charges, as applicable. PLEASE CONSULT THE ACCOMPANYING
ANNUITY CONTRACT PROSPECTUS FOR ANY APPLICABLE SALES CHARGES.
(C) CONTRACT TERMINATION
If the Contract is discontinued, no further Purchase Payments or transfers will
be allowed. On the date we receive a written request to terminate the contract,
or within 31 days after we notify you of our intent to terminate the contract,
any amounts transferred from the Fixed Account Option to the Separate Account
Options during the previous 30 days from the date of discontinuance will be
transferred back to the Fixed Account Option.
If the Contract is discontinued because of Plan termination, due to the
dissolution or liquidation of the employer under US Code Title 11 procedures,
the Cash Surrender Value will be distributed directly to the employees entitled
to share in such distributions. Distribution may be in the form of cash
payments, annuity options or deferred annuities. This provision does not apply
to plans established pursuant to Section 457 of the Code.
If the Contract Owner requests a full surrender of the contract or of all
contract values held in the Fixed Account Option for reasons other than listed
above; or if the Company discontinues the contract, the Company will determine
the Market Adjusted Value of the Fixed Account Option.
The amount payable to the Contract Owner if a Contract is discontinued may be
adjusted down by the application of the Market Value Adjustment formula. The
formula is the following:
Market Adjusted Value = Cash Value X (1 + R0)(5)/(1 + R1 + .0025)(5)
Where:
R0 is the rate of interest credited to funds on deposit under the
Fixed Account Option at the time of termination,
R1 is the rate of interest credited on new deposits for this class of
contracts at the time of termination.
If, as of the date of discontinuance, the Market Adjusted Value is less than the
Cash Value of the Fixed Account Option, the Contract Owner may select one of the
two methods of payment, as described below:
1) the Market Adjusted Value (less any applicable Sales Charge) in one lump
sum within 60 days of the date of discontinuance, or
2) The Cash Surrender Value of the Fixed Account Option in installments
over a 5-year period. The amount deducted on Surrender, if any, is
determined as of the date of discontinuance, and will apply to all
installment payments. Interest will be credited to the remaining Cash
Value of the Fixed Account Option during this installment period at a
fixed effective annual interest rate of not less than 3%. The first
payment will be made no later than 60 days following the Contract
Owner's request for surrender or our written notification of our intent
to discontinue the contract. The remaining payments will be mailed on
each anniversary of the discontinuance for four years. During that
period, no additional surrenders are allowed.
If, as of the date of discontinuance, the Market Adjusted Value is greater than
the Cash Value of the Fixed Account Option, the Contract Owner may select one of
the two methods of payment, as described below:
1) the Cash Surrender Value of the Fixed Account Option, in one lump sum
within 60 days of the date of discontinuance, or
9
<PAGE> 1
Exhibit 23(a)
Consent of Independent Certified Public Accountants
---------------------------------------------------
The Board of Directors
The Travelers Insurance Company
We consent to the use of our reports incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Prospectus.
KPMG Peat Marwick LLP
Hartford, Connecticut
April 9, 1997
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
This schedule contains summary of Financial Information extracted from The
Financial Statements of The Travelers Insurance Company and is qualified in its
entirety by reference to such Financial Statements.
</LEGEND>
<CIK> 0000733076
<NAME> THE TRAVELERS INSURANCE COMPANY
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 26,394
<CASH> 74
<RECOVER-REINSURE> 3,858
<DEFERRED-ACQUISITION> 2,133
<TOTAL-ASSETS> 42,973
<POLICY-LOSSES> 11,450
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 536
<POLICY-HOLDER-FUNDS> 22,641
<NOTES-PAYABLE> 0
0
0
<COMMON> 100
<OTHER-SE> 6,228
<TOTAL-LIABILITY-AND-EQUITY> 42,973
1,379
<INVESTMENT-INCOME> 1,887
<INVESTMENT-GAINS> 65
<OTHER-INCOME> 298
<BENEFITS> 1,163
<UNDERWRITING-AMORTIZATION> 281
<UNDERWRITING-OTHER> 1,210
<INCOME-PRETAX> 975
<INCOME-TAX> 342
<INCOME-CONTINUING> 633
<DISCONTINUED> 26
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 659
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
