<PAGE> 1
Registration Statement No. 333-44579
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Pre-effective Amendment No. 1
FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE TRAVELERS LIFE AND ANNUITY COMPANY
and
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: 06-0904249
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
The Travelers Life and Annuity Company
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 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. ____
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 Act 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. ___
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
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Title of Each Class Proposed
of Securities to be Amount to be Proposed Maximum Maxumum Aggregate Amount of
Registered Registered Offering Price Per Unit Offering Price* Registration Fee
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Modified Guaranteed Not Applicable* Not Applicable* $200,000,000 $59,000.00
Annuity Contracts
Limited Guarantee Not Applicable* Not Applicable* **
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</TABLE>
*The maximum aggregate offering price is estimated solely for the purpose of
determining the registration fee. The amount being registered and the proposed
maximum offering price per share per unit are not applicable in that these
contracts are not issued in predetermined amounts or units.
** No separate fee is required for the Limited Guarantee, under Rule 457(n) of
the Securities Act of 1933.
<PAGE> 2
PART I
INFORMATION REQUIRED IN PROSPECTUS
----------------------------------
THE TRAVELERS LIFE AND ANNUITY COMPANY
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
- ---- ---------------- ---------------------
<S> <C> <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 Contracts
9. Description of Securities Outside Front Cover Page of Prospectus;
to be Registered Description of the Contracts;
Limited Guarantee
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;
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> 3
PROSPECTUS
<PAGE> 4
THE TRAVELERS LIFE AND ANNUITY COMPANY
THE TRAVELERS INSURANCE COMPANY
ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
TTM
TRAVELERS TARGET MATURITY
MODIFIED GUARANTEED ANNUITY CONTRACT
This Prospectus describes participating interests in individual and group
deferred annuity contracts issued by The Travelers Life and Annuity 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 2.)
Purchase Payments become part of Separate Account MGA II. 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 9.)
The Travelers Insurance Company ("Travelers Insurance") has entered into an
agreement, a Limited Guarantee, with the Company whereby Travelers Insurance has
agreed to guarantee the Contracts described in this Prospectus as to principal
and interest under the Contracts. (See "Limited Guarantee," page 14.)
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 4.)
THIS PROSPECTUS IS ACCOMPANIED BY A COPY OF THE TRAVELERS LIFE AND ANNUITY
COMPANY'S AND THE TRAVELERS INSURANCE COMPANY'S LATEST ANNUAL REPORTS ON FORM
10-K FOR THE PERIOD ENDED DECEMBER 31, 1996, AND THE THIRD QUARTER REPORT FOR
EACH COMPANY ON FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30, 1997, WHICH CONTAIN
ADDITIONAL INFORMATION ABOUT EACH 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 MARCH , 1998.
<PAGE> 5
TABLE OF CONTENTS
<TABLE>
<S> <C>
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................................................... 2
Application and Purchase Payment............................................. 2
Right to Cancel.............................................................. 2
ACCUMULATION PERIOD............................................................ 3
Guarantee Periods............................................................ 3
ESTABLISHMENT OF GUARANTEED INTEREST RATES..................................... 4
SURRENDERS..................................................................... 4
General...................................................................... 4
Surrender Charge............................................................. 5
Market Value Adjustment...................................................... 5
Special Surrenders........................................................... 6
Waiver of Surrender Charge................................................... 6
Reduction or Elimination of Surrender Charges................................ 6
Guarantee Period Exchange Option............................................. 7
Premium Taxes................................................................ 7
DEATH BENEFIT.................................................................. 7
PAYMENT UPON FULL OR PARTIAL SURRENDER......................................... 7
ANNUITY PERIOD................................................................. 8
Election of Annuity Commencement Date and Form of Annuity.................... 8
Change of Annuity Commencement Date or Annuity Option........................ 8
Annuity Options.............................................................. 8
Annuity Payment.............................................................. 9
Death of Annuitant After Annuity Commencement Date........................... 9
INVESTMENTS BY THE COMPANY..................................................... 9
AMENDMENT OF THE CONTRACTS..................................................... 10
ASSIGNMENT OF THE CONTRACTS.................................................... 10
DISTRIBUTION OF THE CONTRACTS.................................................. 10
FEDERAL TAX CONSIDERATIONS..................................................... 10
General...................................................................... 10
Section 403(b) Plans and Arrangements........................................ 10
Qualified Pension and Profit-Sharing Plans................................... 11
Individual Retirement Annuities.............................................. 11
Section 457 Plans............................................................ 12
Nonqualified Annuities....................................................... 12
Federal Income Tax Withholding............................................... 13
Tax Advice................................................................... 14
LEGAL OPINION.................................................................. 14
EXPERTS........................................................................ 14
LIMITED GUARANTEE.............................................................. 14
APPENDIX A..................................................................... 15
Modified Guaranteed Annuity for Qualified Plans.............................. 15
APPENDIX B..................................................................... 16
FINANCIAL STATEMENTS........................................................... 10-K
</TABLE>
<PAGE> 6
GLOSSARY OF SPECIAL TERMS
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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 and on whose life
the Annuity payments are made.
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 Life and Annuity 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 the Contract or 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 Life and Annuity
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 Contract or 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> 7
PROSPECTUS SUMMARY
- --------------------------------------------------------------------------------
The Travelers Life and Annuity Company ("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
among 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 4.)
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 4.)
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 an
amount equal to the amount surrendered multiplied by a specified percentage. The
applicable percentage is seven percent for surrenders occurring in the first
Contract Year, and will be reduced by one percentage point for each of the next
six Contract Years for surrenders occurring during those 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 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. 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 10.)
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 4 and "Federal Tax
Considerations," page 10.)
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.
Summary-1
<PAGE> 8
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 30 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 7.)
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 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> 9
THE INSURANCE COMPANY
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The Travelers Life and Annuity Company (the "Company") is a wholly owned
subsidiary of The Travelers Insurance Company ("Travelers Insurance"), which is
indirectly owned, through a wholly owned subsidiary, by Travelers Group Inc., a
financial services holding company. The Company is a stock insurance company
chartered in 1973 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 a majority of the states of the United States, and
intends to seek licensure in the remaining states, except New York. The
principal executive offices of both the Company and Travelers Insurance are
located at One Tower Square, Hartford, Connecticut 06183, telephone number (860)
277-0111.
AVAILABLE INFORMATION
- --------------------------------------------------------------------------------
Travelers Insurance is subject to the informational 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 and Travelers Insurance have filed
with the Commission a registration statement (the "Registration Statement")
relating to the Contracts offered by this Prospectus and the related Limited
Guarantee. 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, Travelers Insurance and the Contracts and related Limited Guarantee.
The Registration Statement and the exhibits may be inspected and copied as
described above. Although Travelers Insurance and the Company furnish the Annual
Reports on Form 10-K for the year ended December 31, 1996 and the third quarter
reports on Form 10-Q for the period ended September 30, 1997 to owners of
contracts or certificates, neither the Company nor Travelers Insurance plans 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
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The Company and The Travelers Insurance Company's latest Annual Reports on Form
10-K, and the latest quarterly report on Form 10-Q (for the period ending
September 30, 1997) 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 Forms 10-K must accompany this Prospectus.
The Forms 10-K and 10-Q for the fiscal year ended December 31, 1996 and period
ended September 30, 1997, respectively, contain additional information about the
Company and about The Travelers Insurance Company, including audited financial
statements for the Company and The Travelers Insurance Company's latest fiscal
years. The Company filed its Form 10-K on March 26, 1997, and its Form 10-Q on
November 12, 1997 via Edgar, File No. 33-58677. Travelers Insurance filed its
Form 10-K on March 26, 1997, and its Form 10-Q on November 12, 1997 via Edgar,
File No. 33-33691.
If requested, the Company will furnish, without charge, to each person to whom a
copy of this Prospectus is delivered, a copy of any of the documents referred to
above which has been
1
<PAGE> 10
incorporated by reference in the Prospectus, other than exhibits to any such
documents (unless such exhibits are specifically incorporated by reference in
such documents). Any such requests should be directed to The Travelers Life and
Annuity Company, One Tower Square, Hartford, Connecticut 06183-5030, Attention:
Annuity Services. The telephone number is (860) 422-3985.
DESCRIPTION OF THE CONTRACTS
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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.
2
<PAGE> 11
ACCUMULATION PERIOD
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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 Guaranteed 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 4). 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.
EXAMPLE OF COMPOUNDING AT THE GUARANTEED INTEREST RATE
Beginning Account Value: $50,000
Guarantee Period: 5 years
Guaranteed Interest Rate: 5.50% Annual Effective Rate
<TABLE>
<CAPTION>
END OF CONTRACT YEAR
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YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
<S> <C> <C> <C> <C> <C>
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<CAPTION>
<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
==========
</TABLE>
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
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
3
<PAGE> 12
Guaranteed Interest Rate. We will notify you in writing about selecting a
subsequent Guarantee Period before maturity. 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.
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 9.) 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 10.)
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 10.)
4
<PAGE> 13
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 CHARGE AS A PERCENTAGE OF
IN WHICH SURRENDER IS MADE CASH VALUE
<S> <C>
- --------------------------------------------------------------
<CAPTION>
<S> <C>
1 7%
2 6%
3 5%
4 4%
5 3%
6 2%
7 1%
Thereafter 0%
</TABLE>
No surrender charge will apply for surrender dates after Contract Year 7 or
certain surrenders effective at the end of a Guarantee Period. (See "Special
Surrenders," page 6.)
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.
5
<PAGE> 14
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 30
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;
(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; or
(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 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.
6
<PAGE> 15
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 3.5%, 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
- --------------------------------------------------------------------------------
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 the Company receives written notification of due proof of death. 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
- --------------------------------------------------------------------------------
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 30 days, and if we defer payment for more than 30
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.
7
<PAGE> 16
ANNUITY PERIOD
- --------------------------------------------------------------------------------
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 30 days prior to your Annuity Commencement Date, you may
elect to have all or a portion of your Cash Surrender Value paid in a lump sum
on your Annuity Commencement Date. Alternatively, you may elect, at least 30
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. If the fifth annuity option "Payments For a
Designated Period" is elected in the first contract year, the Cash Surrender
Value will be applied. If no option is elected, 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 30 days prior to the scheduled
Annuity Commencement Date. Once an Annuity Option has begun, it may not be
changed.
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 provided 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
8
<PAGE> 17
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 surrender charge 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 will be 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 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
- --------------------------------------------------------------------------------
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.
Purchase Payments made to the Contracts are invested in Separate Account MGA II,
a non-unitized separate account and are not chargeable with liabilities arising
out of any other business which the Company may conduct. Owners do not share in
the investment performance of assets allocated to Separate Account MGA II. The
obligations under the Contract are independent of the investment performance of
Separate Account MGA II and are the obligations of the Company.
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
9
<PAGE> 18
that the Guaranteed Interest Rates are established. (See "Establishment of
Guaranteed Interest Rates," page 4.) 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
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
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 1934 Act 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 Travelers Insurance Company. It is anticipated that
an affiliated broker dealer will become the principal underwriter in 1998.
Towers Square 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. The Company may
pay a commission on an Owner's election of a subsequent Guarantee Period. In
addition, the Company may offer Contracts to members of certain other eligible
groups through trusts or otherwise.
FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
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
10
<PAGE> 19
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 the later of April 1st of the calendar year
following the calendar year in which the participant attains the age of 70 1/2
or April 1st of the calendar year in which the Participant retires. 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.
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.
Distributions must begin by the later of April 1st of the calendar year
following the calendar year in which you attain age 65 or April 1st of the
calendar year in which you retire, except that if you are a 5% owner as defined
in Code Section 416(i)(1)(B), distributions must begin by April 1st of the
calendar year following the calendar year in which you attain age 70 1/2.
Certain other mandatory distribution rules apply on the death of the
participant.
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 annually into IRAs for both spouses
in the maximum amount of 100% of earned income up to a combined limit of $4,000.
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. Certain other mandatory distribution rules
apply on
11
<PAGE> 20
the death of the individual. 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 in 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.
NONQUALIFIED ANNUITIES
Individuals may purchase tax-deferred annuities without tax law funding limits.
The Purchase Payment receives no tax benefit, deduction or deferral, but taxes
on the increases in the value of the Contract are generally deferred 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
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<PAGE> 21
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, or 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
(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, 1997, a recipient receiving periodic payments (e.g.,
monthly or annual payments under an Annuity Option)
13
<PAGE> 22
which total $14,850 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.
LEGAL OPINION
- --------------------------------------------------------------------------------
Legal matters in connection with federal laws and regulations affecting the
issue and sale of the Contracts described in this Prospectus and the
organization of the Company, its authority to issue such Contracts under
Connecticut law, the Limited Guarantee and the validity of the forms of the
Contracts under Connecticut law have been passed on by the General Counsel of
the Company.
EXPERTS
- --------------------------------------------------------------------------------
The financial statements and schedules of The Travelers Life and Annuity Company
and 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.
LIMITED GUARANTEE
- --------------------------------------------------------------------------------
Travelers Insurance has agreed to pay in full to any owner of a Contract the
principal and interest under the Contract, as and when due to the extent that
the Company has not made such payment. This is not a guarantee that the
principal and interest under the Contract will maintain any specific level or
amount. It is a guarantee of the Company's obligation to pay the principal and
interest due under the Contract. There can be no assurance that the amount so
due will equal or exceed the Purchase Payment.
This Limited Guarantee has been filed as an exhibit to the Registration
Statement, of which this Prospectus forms a part.
This Limited Guarantee will remain in effect for only so long as the Contracts
described in this Prospectus remain in effect.
14
<PAGE> 23
APPENDIX A
- --------------------------------------------------------------------------------
MODIFIED GUARANTEED ANNUITY FOR QUALIFIED PLANS
The Travelers Target Maturity Annuity for Qualified Plans is a group deferred
annuity Contract under which a Purchase Payment may be made. Plans eligible to
purchase the Contract are pension and profit sharing plans qualified under
sec.401(a) of the Internal Revenue Code, and eligible state deferred
compensation plans under sec.457 of the Code ("Qualified Plans").
To apply for a Group Annuity Contract, the trustee or other applicant need only
complete an application or purchase order for the Group Annuity Contract and
make a Purchase Payment. A Group Annuity Contract will then be issued to the
applicant. While no Certificates are issued, each Purchase Payment and the
Account established thereby, are confirmed to the Contract Owner. The Purchase
Payment operates to establish an Account under the Group Annuity Contract in the
same manner as non-qualified purchases. Each Account will have its own optional
Guarantee Period and Guaranteed Interest Rate. Surrenders under the Group
Annuity Contract may be made at the election of the Contract Owner, from the
Account established under the Contract. Account surrenders are subject to the
same limitations, adjustments and charges as surrenders made under a certificate
(see "Surrenders," page 4). Surrender Values may be taken in cash or applied to
purchase annuities for the Contract Owners' Qualified Plan participants.
Because there are no individual participant accounts, the qualified Group
Annuity Contract issued in connection with a Qualified Plan does not provide for
death benefits. Annuities purchased for Qualified Plan participants may provide
for a payment upon the death of the Annuitant depending on the option chosen
(see "Annuity Options," page 8). Additionally, since there are no Annuitants
prior to the actual purchase of an Annuity by the Contract Owner, the provisions
regarding the Annuity Commencement Date are not applicable.
15
<PAGE> 24
APPENDIX B
- --------------------------------------------------------------------------------
MARKET VALUE ADJUSTMENT
The amount payable on a partial or full surrender may be adjusted up or down by
the application of the Market Value Adjustment. The formula which will be used
to determine the Market Adjusted Value is:
<TABLE>
<S> <C> <C> <C> <C>
1 ()t/365
Market Adjusted Value = (Maturity Value) X -------
F 1 + iC G
</TABLE>
where "iC" is the current Guaranteed Interest Rate for a Guarantee Period
of "t" days and "t" is the number of days remaining in the Guarantee Period
adjusting for leap years.
The current Guaranteed Interest Rate is declared periodically by the Company and
is the rate (straight line interpolation between whole years) which the Company
is then paying on premiums paid under this class of Contracts with the same
maturity date as the Purchase Payment to which the formula is being applied.
ILLUSTRATION OF A MARKET VALUE ADJUSTMENT
Purchase Payment: $50,000.00
Guarantee Period: 5 Years
Guaranteed Interest Rate: 5% Effective Annual Rate
The following examples illustrate how the Market Value Adjustment may affect the
values of your Contract. In these examples, the surrender occurs one year after
a Purchase Payment of $50,000 was made to the Contract. The Maturity Value of
this Purchase Payment would be $63,814.08 at the end of the five-year Guarantee
Period. However, after one year, when the surrenders occur in these examples,
the Account Value (i.e., the Purchase Payment plus accumulated interest) would
be $52,500.
The Market Value Adjustment will be based on the rate the Company is crediting
at the time of surrender on new Purchase Payments of the same term-to-maturity
as the time remaining in your Guarantee Period. One year after the Purchase
Payment was made, you would have four years remaining in the five-year Guarantee
Period.
EXAMPLE OF A NEGATIVE MARKET VALUE ADJUSTMENT
A negative Market Value Adjustment results from a surrender that occurs when
interest rates have increased since the date the Purchase Payment was made.
Assume interest rates have increased one year after the Purchase Payment and the
Company is crediting 7% for a four-year Guarantee Period.
If you surrender the full Account Value, the Market Adjusted Value would be:
<TABLE>
<S> <C> <C> <C> <C>
1 (4)
$48,683.46 = $63,814.08 X --------
F 1 + .07 G
</TABLE>
16
<PAGE> 25
The Market Value Adjustment is a reduction of $3,816.54 from the Account Value:
$48,683.46 = $52,500.00 - $3,816.54
If instead of a full surrender, 50% of the Account Value was surrendered, the
Market Adjusted Value of the surrendered portion would be 50% of the full
surrender:
<TABLE>
<S> <C> <C> <C> <C>
1 (4)
$24,341.73 = $31,907.04 X --------
F 1 + .07 G
</TABLE>
The Maturity Value after the partial surrender would be 50% of the Maturity
Value prior to surrender, or $31,907.04.
EXAMPLE OF A POSITIVE MARKET VALUE ADJUSTMENT
A positive Market Value Adjustment results from a surrender that occurs when
interest rates have decreased since the date a Purchase Payment was made. Assume
interest rates have decreased one year later and the Company is then crediting
3.5% for a four-year Guarantee Period.
If you surrender the full Account Value, the Market Adjusted Value would be:
<TABLE>
<S> <C> <C> <C> <C>
1 (4)
$55,610.28 = $63,814.08 X ---------
F 1 + .035 G
</TABLE>
The Market Value Adjustment is an increase of $3,110.28 over Account Value:
$55,610.28 = $52,500.00 + $3,110.28
If instead of a full surrender, 50% of the Account Value were surrendered, the
Market Adjusted Value of the surrendered portion would be 50% of the full
surrender:
<TABLE>
<S> <C> <C> <C> <C>
1 (4)
$27,805.14 = $31,907.04 X ---------
F 1 + .035 G
</TABLE>
The Maturity Value after the partial surrender would be 50% of the Maturity
Value prior to the surrender, or $31,907.04.
These examples illustrate what may happen when interest rates increase or
decrease from the beginning of a Guarantee Period. A particular Market Value
Adjustment may have a greater or lesser impact than that shown in these
examples, depending on how much interest rates have changed since the beginning
of a Guarantee Period and the amount of time remaining to maturity. In addition,
a surrender charge may be assessed on surrenders made before the Purchase
Payment has been under the Contract for seven years.
17
<PAGE> 26
"TTM"
TRAVELERS TARGET MATURITY
MODIFIED GUARANTEED ANNUITY CONTRACTS
ISSUED BY
THE TRAVELERS LIFE AND ANNUITY COMPANY
ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183
L-12455 TLAC/TIC Ed 5-98
Printed in U.S.A.
<PAGE> 27
PART II
-------
INFORMATION NOT REQUIRED IN PROSPECTUS
--------------------------------------
Item 14. Other Expenses of Issuance and Distribution
-------------------------------------------
Registration Fees: $59,000.00 for 200,000,000 in interests of Modified
Guaranteed Annuity Contracts.
Estimate of Printing Costs: $15,000
Cost of Independent Auditors: Approximately $8,000
Item 15. Indemnification of Directors and Officers
-----------------------------------------
Section 33-770a 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 33-770a 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. provides liability insurance for its directors and officers
and the directors and officers of its subsidiaries, including the Registrants.
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
Registrants pursuant to the foregoing provisions, or otherwise, the Registrants
have 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 Registrants 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 Registrants will, unless in the opinion of their counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by them is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
<PAGE> 28
Item 16. Exhibits
--------
(a) Exhibits
1. Underwriting Agreement. (Incorporated herein by reference
to Exhibit 1 to Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-2, File No. 58677, filed
on July 11, 1995.)
2. Agreement and Plan of Merger dated June 25, 1995, by and
among United HealthCare Corporation, Montana Acquisition,
Inc., The MetraHealth Companies, Inc. and Certain Other
Persons. (Incorporated herein by reference to Exhibit 2 to
Pre-Effective Amendment No. 1 to the Registration
Statement on Form S-2, File No. 58677, filed on July 11,
1995.)
3(a). Charter of The Travelers Life and Annuity Company, as
amended on April 10, 1990. (Incorporated herein by
reference to Exhibit 6(a) to the Registration Statement on
Form N-4, File No. 33-58131, filed on March 17, 1995.)
3(a)(i) 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 on April 18, 1995.)
3(b). By-Laws of The Travelers Life and Annuity Company, as
amended on October 20, 1994. (Incorporated herein by
reference to Exhibit 6(b) to the Registration Statement on
Form N-4, File No. 33-58131, filed on March 17, 1995.)
3(b)(i) 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 on April 18, 1995.)
4(a). Contracts. (Incorporated herein by reference to Exhibit 4
(a) to Pre-Effective Amendment No. 1 to the Registration
Statement on Form S-2, File No. 58677, filed on July 11,
1995.)
4(b). Limited Guarantee.
4(b)(i). Approval from State of Connecticut.
5. Opinion Re: Legality, Including Consent. (Incorporated
herein by reference to Exhibit 5 to the Registration
Statement on Form S-2 filed January 21, 1998.)
10. Material Contracts.
a. 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 The Travelers Insurance Company's
Form 10-Q for the quarter ended September 30, 1994,
File No. 33-33691, filed on November 14, 1994.
b. 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 The Travelers
Insurance Company's Form 10-Q for the quarter ended
September 30, 1994, File No. 33-33691, filed on
November 14, 1994.
<PAGE> 29
23(a). Consent of KPMG Peat Marwick LLP, Independent Certified
Public Accountants.
23(b). Consent of Counsel (see Exhibit 5).
24(a). Powers of Attorney for Separate Account MGA II authorizing
Jay S. Fishman or Ernest J. Wright as signatory for Marc
P. Weill and Christine B. Mead. (Incorporated herein by
reference to Exhibit 24(a) to Pre-Effective Amendment No.
1 to the Registration Statement on Form S-2, File No.
58677, filed on July 11, 1995.)
24(b). Powers of Attorney for Separate Account MGA II authorizing
Jay S. Fishman or Ernest J. Wright as signatory for Robert
I. Lipp, Charles O. Prince, III, Donald T. DeCarlo, Irwin
R. Ettinger, and Michael A. Carpenter. (Incorporated
herein by reference to the Registration Statement on Form
S-2, File No. 33-58677, filed on April 18, 1995.)
24(c). 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.
(Incorporated herein by reference to Exhibit 24(c) to
Pre-Effective Amendment No. 1 to the Registration
Statement on Form S-2, File No. 58677, filed on July 11,
1995.)
24(d) Powers of Attorney for Separate Account MGA II authorizing
Ernest J. Wright or Kathleen A. McGah as signatory for
Michael A. Carpenter, Jay S. Benet, George C. Kokulis,
Katherine M. Sullivan and Ian R. Stuart. (Incorporated
herein by reference to Exhibit 24(d) to the Registration
Statement on Form S-2, filed November 6, 1996.)
24(e) Powers of Attorney authorizing Ernest J. Wright or
Kathleen A. McGah as signatory for Michael A. Carpenter,
Jay S. Benet, George C. Kokulis, Katherine M. Sullivan and
Ian R. Stuart. (Incorporated herein by reference to
Exhibit 24(e) to the Registration Statement on Form S-2,
filed November 6, 1996.)
24(f) Power of Attorney authorizing Ernest J. Wright or Kathleen
A. McGah as signatory for Ian R. Stuart. (Incorporated
herein by reference to Exhibit 24(f) to the Post-Effective
Amendment No. 1 to Form S-2, filed April 11, 1997.)
27(a). Financial Data Schedule of The Travelers Life and Annuity
Company. (10-K for year ended December 31, 1996 is
incorporated herein by reference to Exhibit 27(a) to the
Post-Effective Amendment No. 1 to Form S-2 Filed April 11,
1997; 10-Q for the period ended September 30, 1997 is
incorporated herein by reference to the Form 10-Q
filed via Edgar on November 12, 1997)
27(b). Financial Data Schedule of The Travelers Insurance
Company. (10-K for year ended December 31, 1996 is
incorporated herein by reference to Exhibit 27(a) to
the Post-Effective Amendment No. 1 to Form S-2 filed
April 11, 1997; 10-Q for the period ended September 30,
1997 is in corporated herein by reference to the Form 10-Q
filed via Edgar on November 12, 1997.)
<PAGE> 30
Item 17. Undertakings
------------
The undersigned registrants hereby undertake 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 registrants pursuant to the provisions described under
Item 15 above or otherwise, the Registrants have 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
registrants of expenses incurred or paid by a director, officer or
controlling person of the registrants in the successful defense of any
action, suit or proceeding) is asserted against the registrants by such
director, officer or controlling person in connection with the
securities being registered, the registrants will, unless in the
opinion of their counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by them is against public policy as
expressed in the Act and will be governed by the final adjudication of
such issue.
<PAGE> 31
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the Registrant named
below certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-2 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Hartford, State of Connecticut, on March 13, 1998.
THE TRAVELERS LIFE AND ANNUITY COMPANY
(Registrant)
By: *Ian R. Stuart
----------------------------------------------
Ian R. Stuart
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 March 13, 1998.
*MICHAEL A. CARPENTER Director and Chairman of the Board,
- -------------------------------- President and Chief Executive Officer
(Michael A. Carpenter)
*ROBERT I. LIPP Director
- --------------------------------
(Robert I. Lipp)
*JAY S. BENET Director
- --------------------------------
(Jay S. Benet)
*GEORGE C. KOKULIS Director
- --------------------------------
(George C. Kokulis)
*KATHERINE M. SULLIVAN Director, Senior Vice President and
- -------------------------------- General Counsel
(Katherine M. Sullivan)
*IAN R. STUART Director, Senior Vice President, Chief
- -------------------------------- Financial Officer, Chief Accounting Officer
(Ian R. Stuart) and Controller
*MARC P. WEILL Director
- --------------------------------
(Marc P. Weill)
* By: Ernest J. Wright, Attorney-in-Fact
<PAGE> 32
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the Registrant named
below 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
March 13, 1998.
THE TRAVELERS INSURANCE COMPANY
(Registrant)
By: *Ian R. Stuart
---------------------------------------------
Ian R. Stuart
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 March 13, 1998.
*MICHAEL A. CARPENTER Director, Chairman of the Board, President
- -------------------------------- and Chief Executive Officer
(Michael A. Carpenter)
*ROBERT I. LIPP Director
- --------------------------------
(Robert I. Lipp)
*JAY S. BENET Director
- --------------------------------
(Jay S. Benet)
*GEORGE C. KOKULIS Director
- --------------------------------
(George C. Kokulis)
*KATHERINE M. SULLIVAN Director, Senior Vice President and
- -------------------------------- General Counsel
(Katherine M. Sullivan)
*IAN R. STUART Director, Senior Vice President,
- -------------------------------- Chief Financial Officer,
(Ian R. Stuart) Chief Accounting Officer and Controller
*MARC P. WEILL Director
- --------------------------------
(Marc P. Weill)
*By: Ernest J. Wright, Attorney-in-Fact
<PAGE> 33
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
- ------- ----------- ----------------
<S> <C> <C>
1. Underwriting Agreement. (Incorporated herein by reference
to Exhibit 1 to Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-2, File No. 58677,
filed on July 11, 1995.)
2. Agreement and Plan of Merger dated June 25, 1995, by and
among United HealthCare Corporation, Montana Acquisition,
Inc., The MetraHealth Companies, Inc. and Certain Other
Persons. (Incorporated herein by reference to Exhibit 2 to
Pre-Effective Amendment No. 1 to the Registration Statement
on Form S-2, File No. 58677, filed on July 11, 1995.)
3(a). Charter of The Travelers Life and Annuity Company, as
amended on April 10, 1990. (Incorporated herein by
reference to Exhibit 6(a) to the Registration Statement on
Form N-4, File No. 33-58131, filed on March 17, 1995.)
3(a)(i) 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 on April 18, 1995.)
3(b). By-Laws of The Travelers Life and Annuity Company, as
amended on October 20, 1994. (Incorporated herein by
reference to Exhibit 6(b) to the Registration Statement on
Form N-4, File No. 33-58131, filed on March 17, 1995.)
3(b)(i) 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 on April 18, 1995.)
4(a). Contracts. (Incorporated herein by reference to Exhibit 4(a)
to Pre-Effective Amendment No. 1 to the Registration
Statement on Form S-2, File No. 58677, filed on July 11, 1995.)
4(b). Limited Guarantee. Electronically
4(b)(1). Approval from State of Connecticut. Electronically
5. Opinion Re: Legality, Including Consent. (Incorporated herein
by reference to Exhibit 5 to the Registration Statement on
Form S-2, filed January 21, 1998)
</TABLE>
<PAGE> 34
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
- ------- ----------- ----------------
<S> <C> <C>
10. Material Contracts.
a. 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.
b. 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 KPMG Peat Marwick LLP, Independent Electronically
Certified Public Accountants.
23(b). Consent of Counsel (see Exhibit 5).
24(a). Powers of Attorney for Separate Account MGA II authorizing
Jay S. Fishman or Ernest J. Wright as signatory for Marc P.
Weill and Christine B. Mead. (Incorporated herein by reference
to Exhibit 24(a) to Pre-Effective Amendment No. 1 to the
Registration Statement on Form S-2, File No. 58677, filed on
July 11, 1995.)
24(b). Powers of Attorney for Separate Account MGA II authorizing
Jay S. Fishman or Ernest J. Wright as signatory for Robert I.
Lipp, Charles O. Prince, III, Donald T. DeCarlo, Irwin R.
Ettinger and Michael A. Carpenter. (Incorporated herein by
reference to the Registration Statement on Form S-2,
File No. 33-58677, filed on April 18, 1995.)
24(c). 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. (Incorporated
herein by reference to Exhibit 24 to Pre-Effective Amendment
No. 1 to the Registration Statement on Form S-2,
File No. 58677, filed on July 11, 1995.)
24(d) Powers of Attorney for Separate Account MGA II
authorizing Ernest J. Wright or Kathleen A. McGah as
signatory for Michael A. Carpenter, Jay S. Benet,
George C. Kokulis, Katherine M. Sullivan and Ian R. Stuart.
(Incorporated herein by reference to Exhibit 24(d) to the
Registration Statement on Form S-2, filed November 6, 1996.)
</TABLE>
<PAGE> 35
<TABLE>
<CAPTION>
Exhibit
No. Description Method of Filing
- ------- ----------- ----------------
<S> <C> <C>
24(e) Powers of Attorney authorizing Ernest J. Wright or
Kathleen A. McGah as signatory for Michael A. Carpenter,
Jay S. Benet, George C. Kokulis, Katherine M. Sullivan
and Ian R. Stuart. (Incorporated herein by reference to
Exhibit 24(e) to the Registration Statement on Form S-2,
filed November 6, 1996.)
24(f) Power of Attorney authorizing Ernest J. Wright or
Kathleen A. McGah as signatory for Ian R. Stuart.
(Incorporated herein by reference to Exhibit 24(f)
to Post-Effective Amendment No. 1 to the Registration
Statement on Form S-2 filed on April 21, 1997)
27(a). Financial Data Schedule of The Travelers Life and
Annuity Company. (Incorporated herein by reference to Exhibit
27(a) to Post-Effective Amendment No. 1 to the
Registration Statement on Form S-2 filed on April 21, 1997;
10-Q for the period ended September 30, 1997 is incorporated
herein by reference to the Form 10-Q filed via Edgar on
November 12, 1997.)
27(b). Financial Data Schedule of The Travelers Insurance
Company. (Incorporated herein by reference to Exhibit
27(b) to Post-Effective Amendment No. 1 to the
Registration Statement on Form S-2 filed on April 21, 1997;
10-Q for the period ended September 30, 1997 is incorporated
herein by reference to the Form 10-Q filed via Edgar on
November 12, 1997.)
</TABLE>
<PAGE> 1
Exhibit 4(b)
Limited Guarantee
AMENDMENT NO. 2
TO
LIMITED GUARANTEE AGREEMENT
Amendment to the Limited Guarantee Agreement dated as of June 16, 1995
(the "Agreement") by and between The Travelers Insurance Company ("TIC") and
The Travelers Life and Annuity Company ("TLAC").
WHEREAS, TIC and TLAC entered into the Agreement in order to comply
with Securities and Exchange Commission ("SEC") Form S-2 requirements under the
Securities Act of 1933, which required a guarantee from an SEC registrant,
such as TIC, in order to permit TLAC to register its TTM Modified Guaranteed
Annuity Contracts with the SEC on Form S-2;
WHEREAS, TLAC desires to register additional TTM Modified Guaranteed
Annuity Contracts with the SEC on Form S-2 which must be guaranteed by TIC; and
WHEREAS, TIC desires to guaranty TLAC's additional TTM Modified
Guaranteed Annuity Contracts.
NOW THEREFORE the parties agree as follows:
Effective as of January 21, 1998, the Agreement is hereby being
amended to add a new third sentence to paragraph 1 to read the follows:
Travelers Insurance hereby guarantees up to an additional Two Hundred
Million (200,000,000) Dollars in securities of TLAC, as to principal and
interest only in accordance with the requirements of Form S-2 where those
securities are defined as the TLAC TTM Modified Guaranteed Annuity Contracts
referred to in the Registration Statement on Form S-2 (File No. 333-44579) and
the related Prospectus, (the "Annuity Contracts").
<PAGE> 2
IN WITNESS WHEREOF, the parties have duly executed this Amendment No. 2
to the Agreement by their respective officials thereunto duly authorized and in
the case of TIC its seal to be affixed.
Acknowledged and Agreed
The Travelers Insurance Company
By: Michael A. Carpenter
----------------------------------------
Its: President
---------------------------------------
Date: January 21, 1998
--------------------------------------
The Travelers Life and Annuity Company
By: Michael A. Carpenter
----------------------------------------
Its: President
---------------------------------------
Date: January 21, 1998
--------------------------------------
<PAGE> 1
March 6, 1998
Mr Ernest J. Wright
General Counsel
The Travelers Insurance Company
One Tower Square - 8MS
Hartford, CT 06183
Re: Amendment No. 2 to the June 16, 1995 Limited Guarantee
Agreement Between The Travelers Insurance Company ("TIC") and
The Travelers Life and Annuity Company ("TLAC")
Dear Mr. Wright:
The Company's March 3, 1998 request for approval of the subject transaction,
submitted on a Form D, is approved pursuant to Conn. Gen. Stat 38a-(b)(1).
The Limited Guarantee Agreement as amended quarantees as to principal and
interest the securities registered by TLAC in connection with the issuance of
up to an additional $200 million of Modified Guaranteed Annuity Contracts in
accordance with Rule S-2 of the SEC with respect to registration of the
contracts. The Amendment is effective January 21, 1998.
Very Truly yours,
Debra F. Winter
Insurance Accredited Financial Examiner
Examination Division
Financial Analysis Unit
<PAGE> 1
Exhibit 23 (a)
Consent of Independent Certified Public Accountants
The Board of Directors
The Travelers Life and Annuity Company
The Travelers Insurance Company:
We consent to the use of our reports included herein by reference and to the
reference to our firm under the heading "Experts" in the Prospectus.
Hartford, Connecticut
March 11, 1998
