TRAVELERS TIMED SHORT TRM BND ACCOUNT FOR VARIABLE ANNUITIES, N-30D, 1998-02-26

TRAVELERS TIMED SHORT TRM BND ACCOUNT FOR VARIABLE ANNUITIES
N-30D, 1998-02-26

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<PAGE> 1
UNIVERSAL ANNUITY

ANNUAL REPORTS
DECEMBER 31, 1997

[TRAVELERS INSURANCE LOGO]

THE TRAVELERS TIMED GROWTH AND INCOME
STOCK ACCOUNT FOR VARIABLE ANNUITIES

THE TRAVELERS TIMED SHORT-TERM
BOND ACCOUNT FOR VARIABLE ANNUITIES

THE TRAVELERS TIMED AGGRESSIVE
STOCK ACCOUNT FOR VARIABLE ANNUITIES

THE TRAVELERS TIMED BOND ACCOUNT
FOR VARIABLE ANNUITIES

[TRAVELERS LIFE & ANNUITY LOGO]
The Travelers Insurance Company
The Travelers Life and Annuity Company
One Tower Square
Hartford, CT 06183
<PAGE> 2

[TIMCO LOGO]

The Travelers Investment Management Company ("TIMCO") provides equity
management and advisory services for the following Travelers Variable Products
Separate Accounts contained in this report: The Travelers Timed Growth and
Income Stock Account for Variable Annuities, The Travelers Timed Short-Term
Bond Account for Variable Annuities and The Travelers Timed Aggressive Stock
Account for Variable Annuities.

[TAMIC]

Travelers Asset Management International Corporation ("TAMIC") provides fixed
income management and advisory services for The Travelers Timed Bond Account
for Variable Annuities.
<PAGE> 3
[TRAVELERS LIFE & ANNUITY LOGO]

THE TRAVELERS VARIABLE PRODUCT SEPARATE ACCOUNTS
INVESTMENT ADVISORY COMMENTARY AS OF DECEMBER 31, 1997

ECONOMIC REVIEW AND OUTLOOK

The big story in the second half of 1997 was the Asian economic and financial
crisis. What started out as a localized disturbance in Thailand in July 1997
soon spread through the other countries in Southeast Asia and wreaked havoc in
their currency and capital markets. The events in Asia raise the specter of a
global economic slowdown and prospects of global deflation.

We begin with a discussion of the outlook for inflation and the potential for
deflation with a focus on the U.S. economy. The remarkable string of good news
on the inflation front in the U.S. continued in the fourth quarter. The Producer
Price Index fell slightly in the fourth quarter and declined by 1.2% for 1997.
Producer prices fell in 9 out of 12 months in 1997 while the Consumer Price
Index rose by a mere 1.7% in 1997, the smallest rise since 1986. As we have
mentioned several times before, inflation has never been so low at such a late
stage in the economic cycle.

In additon to technology-driven productivity gains contributing to the recent
disinflationary trend, another positive factor has now come into play for the
outlook on U.S. inflation. With the significant devaluation of several Asian
currencies, import prices should fall and push domestic inflation even lower.

With worldwide overproduction the cost of items such as cars and electronic
goods is actually showing near-zero growth. Prices of some of the most important
industrial commodities, including oil and copper, have tumbled in recent months
and the price of gold, a traditional hedge against inflation, was at an 18-year
low in December 1997, well below $300 per ounce.

We believe that inflation will continue to remain benign. Despite a tight labor
market in the U.S., wage inflation has not surged. Global deflationary pressures
should offset wage inflation in 1998. While we acknowledge the arguments in
favor of global deflation, we have not seen enough evidence to foresee zero or
negative inflation in 1998.

The economic crisis in Southeast Asia also raises the possibility of a global
slowdown. We examine the likely impact on the U.S. economy. The U.S. economy
derives almost 15% of its total output from exports. Approximately 10% of these
exports are made to Southeast Asia. While it is difficult to predict the
eventual impact on U.S. exports, most reasonable estimates of growth shortfalls
suggest that the impact on U.S. Gross Domestic Product ("GDP") growth will be no
more than a decrease of 0.5%. Economic growth forecasts for 1998 have been
revised down recently and the consensus GDP growth estimate for 1998 is now
about 2.5%.

The continued good news on the inflation front sent U.S. interest rates lower
during the fourth quarter. Long term rates fell from 6.4% to 5.9% as investors
began to discount a deflationary outlook and became comfortable with a stable
monetary environment. The sharp drop in interest rates in the second half of
1997 - long term yields fell by almost 100 basis points from 6.8% - triggered a
strong bond market rally.

Short-term interest rates have held steady even as inflation and long-term rates
have fallen. Even though the Federal Reserve Board ("Fed") has not raised short
rates for several months now, monetary policy has effectively become tighter as
the real Fed funds rate has risen to 3.3%. As in several previous instances, the
bond market vigilantes have done the work of the Fed by pricing inflation
expectations at the long end of the yield curve. With Asian currencies in
turmoil, we believe that the Fed is likely to stay put here and that the odds of
another Fed hike are remote.

-1-
<PAGE> 4
FIXED INCOME COMMENTARY

For the first time in seven quarters, bonds outperformed stocks as the Asian
crisis that began in Thailand in July 1997 spread throughout Asia and other
emerging markets. The crisis impacted all global markets in late October when
the Hong Kong dollar was under pressure. The Standard & Poor's 500 Stock Index
("S&P 500") went down roughly 10% in October leading to a sharp rally in the
U.S. bond market. While the U.S. stock market and emerging debt markets posted
positive returns in November and December both of these markets did not offset
the amount lost in October. As of this writing, Asia's problems continue to
challenge many investment professionals.

We believe that many investors have underestimated the damage caused by the
crisis in Asia. Imports from countries with devalued currencies will keep
downward pressure on the inflation rate in the U.S., taking that issue off the
radar screen for many investors. The reduction in corporate revenues will impact
some combination of profits and employment. To the extent that corporations
reduce their labor force to preserve profits, pressure will be taken off U.S.
labor markets and the Federal Reserve Board ("Fed") will be given a compelling
reason to cut rates. Lastly, much of the problems in Asia are the result of
building too much capacity in industries such as automobiles, chemicals and
semiconductors. This overcapacity, which has been exacerbated by the decline of
demand in Asia, will slow down U.S. capital spending growth, which has been in
the recent past the fastest-growing component of the GDP.

Looking ahead for the remainder of 1998, we expect that the difference between
short-term and long-term interest rates will probably widen. In our opinion, one
of two scenarios could develop that could cause this change in the relationship
between interest rates. We believe the most likely scenario is that ongoing
financial turmoil in Asia could hamper U.S. economic growth and lead the Fed to
compensate by lowering short-term interest rates. The other possibility is that
the U.S. economy continues to grow robustly, heightening investor concerns of
greater inflationary pressures. In this case, investors would shift their
attention to the tight U.S. labor market, reflecting their inflationary concerns
in the form of higher long-term interest rates. This latter scenario could
happen if Asian economies recover quickly or if interest-rate sensitive
industries of the U.S. economy pick up sufficiently to offset any adverse
affects that the Asian crisis might have on domestic economic growth.

EQUITY COMMENTARY

The year 1997 turned out to be another spectacular one for the U.S. stock
market. For the first time ever, the U.S. stock market posted three consecutive
years of gains in excess of 20%. The current bull market continues to be driven
by stable economic growth, robust earnings growth and low inflation.

Stock market volatility also increased in 1997 when the Dow Jones Industrial
Average ("DJIA") moved up or down by more than 1% every third trading day on
average. The uncertainty on the earnings front as a result of the Asian
financial and currency crisis should sustain a high level of volatility and
complicate the market outlook for 1998.

After a strong showing in the first half of 1997, the U.S. stock market posted
solid gains in the third quarter. The Standard & Poor's 500 Stock Index gained
7.5% in the third quarter, the Russell 2000 Stock Index ("Russell 2000") rose
sharply by 14.9% and the NASDAQ Composite Stock Index ("NASDAQ") performed even
better with a spectacular rise of 16.9%. The U.S. stock market posted a mixed
performance in the fourth quarter. The S&P 500 gained 2.9% in the fourth
quarter, while the Russell 2000 fell by 3.4% and the NASDAQ declined by 6.8%.
For calendar year 1997, the S&P 500 rose by 33.4%, the Russell 2000 advanced by
22.4% and the NASDAQ gained 21.6%.

Stock market volatility increased in the third quarter with the DJIA registering
its second-largest point decline and its single-largest daily gain within a
three-week period in the middle of the third quarter. Most stock market indexes
fell about 3% on August 15 on a groundswell of earnings concerns after a few,
large cap consumer companies warned about earnings disappointments for the third
quarter. Investor sentiment reversed on September 2 when a weaker economic
report from the National Association of Purchasing Managers dispelled fears of
further Fed tightening. The stock market reversed course with an equally
spectacular 3% gain as bond prices rose sharply also.

-2-
<PAGE> 5
The events in Southeast Asia came into sharp focus for U.S. investors when a
sell-off in Hong Kong, a beacon of stability in the region, dropped the DJIA by
554 points on Monday, October 27 and created its largest point loss in history.
After a wild swing in trading the following day, stock prices began to
stabilize. Despite more bad news in terms of large-scale bankruptcies in South
Korea and Japan in the ensuing weeks, U.S. investors assessed a relatively
modest impact on the domestic economy and the stock market was able to recover
its losses from Gray Monday and even nudge higher by year-end in select sectors.

Second quarter earnings showed the same pattern of good news from earlier
quarters which investors have now almost come to expect as a routine outcome.
Positive surprises again far outnumbered disappointing earnings reports. Over
61% of all companies reported earnings above consensus while only 26% failed to
deliver on earnings expectations.

Third quarter earnings were also ahead of expectations. The final tally on the
earnings scorecard showed that 55% of all companies reported positive earnings
surprises while 28% turned in earnings disappointments. We observe yet again
that the current string of good earnings reports has now reached 19 consecutive
quarters and is unprecedented in terms of both magnitude and duration.

The consensus forecast for 1998 earnings growth is now 7.2%. The key to stock
market performance in 1998 will be the extent to which corporate profits remain
immune to the problems in Asia. The obvious contributors to likely shortfalls in
earnings will be currency translation losses and lower export revenues stemming
from lower demand in Asia. With current valuations at fairly high levels, the
stock market will be intolerant to earnings disappointments.

We suspect that the global stock markets are currently more vulnerable to the
woes of a weak economy than the risk of higher interest rates stimulated by
economic strength. It is difficult to gauge the precise impact of the Asian
crisis on corporate earnings and as a result, 1998 promises to be a year of
great uncertainty.

SANDIP A. BHAGAT, CFA, PRESIDENT & CHIEF INVESTMENT OFFICER, THE TRAVELERS
INVESTMENT MANAGEMENT COMPANY

DAVID A. TYSON, CFA, TRAVELERS ASSET MANAGEMENT INTERNATIONAL CORPORATION

-3-
<PAGE> 6
TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE

<S> <C>
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES............. 5

THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT FOR VARIABLE ANNUITIES.....................18

THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT FOR VARIABLE ANNUITIES....................26

THE TRAVELERS TIMED BOND ACCOUNT FOR VARIABLE ANNUITIES................................39
</TABLE>

-4-
<PAGE> 7
THE TRAVELERS
TIMED GROWTH AND INCOME
STOCK ACCOUNT
FOR VARIABLE ANNUITIES

The Travelers Timed Growth and Income Stock Account For Variable Annuities
("Account TGIS") is managed by The Travelers Investment Management Company
("TIMCO"). TIMCO manages Account TGIS to provide diversified exposure to the
large-company segment of the U.S. equity market, while maintaining a highly
marketable portfolio of common stocks and related financial instruments in order
to accommodate cash flows associated with market-timing moves. Stock selection
is based on a quantitative screening process favoring companies that achieve
earnings growth above consensus expectations and whose shares offer attractive
relative value. In order to achieve consistent relative performance, we manage
Account TGIS to mirror the overall risk, sector weightings and growth/value
style characteristics of the Standard & Poor's 500 Stock Index ("S&P 500"). The
S&P 500 is a value-weighted equity index comprised primarily of large-company
stocks.

Net of fees and expenses, Account TGIS's total return of 29.8% for the year was
well ahead of the 25.5% average return for variable annuity stock accounts in
the Lipper Growth & Income Category.

During the second half of 1997, stock selection in the consumer discretionary,
consumer staples and basic materials sectors made the strongest positive
contribution to Account TGIS's overall relative performance. In the consumer
discretionary sector, Account TGIS benefited from positions in retailers such as
Costco and TJX Companies, newspapers such as Gannett and New York Times, and
radio broadcasters such as Clear Channel Communications and Chancellor Media. In
consumer staples, our largest relative gains came from positions in Dean Foods,
a consolidator within the dairy industry, Interstate Bakeries, the nation's
largest baker, and ConAgra, a packaged foods producer. In the poorly performing
basic materials sector, where product and commodity prices were under pressure
as a result of the Asian currency and economic crisis, underweights in the gold,
copper and paper industries helped Account TGIS's performance.

We lost ground relative to the benchmark primarily in the technology and
utilities sectors. In technology, as investors began to question growth
prospects for many industries with exposure to Asia, our relative performance
was penalized by the portfolio's holdings in the semiconductor and semiconductor
equipment groups such as VLSI and KLA-Tencor respectively. In the utilities and
telecomminications sectors, declines in WorldCom, the long distance telephone
company which plans to acquire MCI Communications, and Calenergy, an independent
power producer with exposure to the Asian and Latin economies, hurt Account
TGIS's performance.

We expect that the uncertainty on the earnings front as a result of the Asian
crisis will sustain the high level of volatility that we saw in 1997, a year
which saw the Dow Jones Industrial Average move up or down by more than 1% every
third trading day on average. We remain cautious about the stock market in the
short run. Over the long term, a friendly interest rate environment and
reasonable earnings strength preclude the prospect of a sustained bear market.

The key to stock market performance in 1998 will be the extent to which
corporate profits remain immune to the problems in Asia. The obvious
contributors to likely shortfalls in earnings will be currency translation
losses and lower export revenues as a result of lower demand in Asia. With
current valuations at fairly high levels, the stock market will be intolerant to
earnings disappointments.

The early earnings season appears to be on track with no major disappointments.
Bellwether technology stocks such as Intel and Motorola have reported earnings
that have come close to expectations. The market is likely to take its lead from
the technology sector which has been hardest hit by earnings concerns relating
to Asia. We are closely monitoring the earnings season to diagnose early
symptoms of the Asian flu. In this environment, we believe that it is
particularly important to identify companies with sustainable earnings growth at
attractive valuations across a wide variety of industries.

-5-
<PAGE> 8
Our disciplined approach to stock selection emphasizes stocks that exhibit
improving fundamentals as measured by changes in analysts' earnings estimates
and the trend of recent earnings surprises, and which also trade at a reasonable
price-to-earnings ratio relative to expected earnings growth rates. In the
technology sector, we maintain an overweight position in Compaq Computer, the
leading manufacturer of personal computers, as earnings estimates continue to
climb and valuation has become more attractive given the weakness in the
technology sector in recent months. This scenario has allowed for the recent
acquisition of Digital Equipment Corp. by Compaq Computer.

In the health care sector, we continue to emphasize Guidant, a leading
manufacturer of medical devices used in regulating heart activity, whose market
share gains have translated into rapidly rising earnings. In the consumer
sector, our focus remains on media companies such as New York Times, radio and
television broadcasters like Clear Channel Communications, and food retailers
such as Albertsons, all of which have good earnings momentum, are relatively
well insulated from international economic uncertainty, and are attractively
valued relative to their growth rates.

PORTFOLIO MANAGERS: SANDIP A. BHAGAT, CFA - JACOB E. HURWITZ, CFA

[TIMCO LOGO]

-6-
<PAGE> 9
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997

<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (cost $163,045,636)................................. $ 212,327,596
Cash....................................................................................... 486,700
Receivables:
Dividends.............................................................................. 227,787
Investment securities sold............................................................. 6,506,633
Purchase payments and transfers from other Travelers accounts.......................... 49,144
Other assets............................................................................... 305
-----------------

Total Assets........................................................................ 219,598,165
-----------------

LIABILITIES:
Payables:
Investment securities purchased........................................................ 6,675,373
Contract surrenders and transfers to other Travelers accounts.......................... 164,967
Investment management and advisory fees................................................ 3,753
Market timing fees..................................................................... 49,516
Variation on futures margin............................................................ 7,750
Accrued liabilities........................................................................ 21,166
-----------------

Total Liabilities................................................................... 6,922,525
-----------------

NET ASSETS:
(Applicable to 60,311,914 units outstanding at $3.526 per unit)............................ $ 212,675,640
=================
</TABLE>

See Notes to Financial Statements

-7-
<PAGE> 10
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends............................................................... $ 2,626,797
Interest................................................................ 2,046,014
-----------------
Total income........................................................ $ 4,672,811

EXPENSES:
Market timing fees...................................................... 2,431,714
Investment management and advisory fees................................. 631,320
Insurance charges....................................................... 2,431,714
-----------------
Total expenses...................................................... 5,494,748
----------------

Net investment loss.............................................. (821,937)
----------------

REALIZED GAIN AND CHANGE IN UNREALIZED GAIN ON INVESTMENT SECURITIES:
Realized gain from investment security transactions:
Proceeds from investment securities sold............................ 149,137,969
Cost of investment securities sold.................................. 119,727,997
-----------------

Net realized gain................................................ 29,409,972

Change in unrealized gain on investment securities:
Unrealized gain at December 31, 1996................................ 30,900,858
Unrealized gain at December 31, 1997................................ 49,281,960
---------------

Net change in unrealized gain for the year....................... 18,381,102
----------------

Net realized gain and change in unrealized gain.............. 47,791,074
----------------

Net increase in net assets resulting from operations.................... $ 46,969,137
================
</TABLE>

See Notes to Financial Statements

-8-
<PAGE> 11
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
---- ----

<S> <C> <C>
OPERATIONS:
Net investment loss................................................ $ (821,937) $ (457,413)
Net realized gain from investment security transactions............ 29,409,972 17,418,572
Net change in unrealized gain on investment securities............. 18,381,102 14,261,912
------------- -------------

Net increase in net assets resulting from operations........... 46,969,137 31,223,071
------------- -------------

UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 2,453,311 and 3,669,841 units, respectively).... 7,827,231 8,913,140
Participant transfers from other Travelers accounts
(applicable to 2,764,694 and 997,173 units, respectively)...... 9,073,766 2,447,373
Market timing transfers from other Travelers timed accounts
(applicable to 13,417,785 and 15,373,491 units, respectively).. 40,990,167 41,324,850
Administrative charges
(applicable to 67,786 and 104,468 units, respectively)......... (224,578) (270,930)
Contract surrenders
(applicable to 5,047,459 and 6,643,488 units, respectively).... (15,992,402) (16,458,034)
Participant transfers to other Travelers accounts
(applicable to 4,764,847 and 10,551,980 units, respectively)... (14,956,016) (25,735,778)
Market timing transfers to other Travelers timed accounts
(applicable to 16,465,702 and 39,522,364 units, respectively).. (45,755,486) (93,836,213)
Other payments to participants
(applicable to 89,224 and 150,701 units, respectively)......... (274,330) (357,201)
------------- -------------

Net decrease in net assets resulting from unit transactions.... (19,311,648) (83,972,793)
------------- -------------

Net increase (decrease) in net assets....................... 27,657,489 (52,749,722)

NET ASSETS:
Beginning of year.................................................. 185,018,151 237,767,873
------------- -------------

End of year........................................................ $ 212,675,640 $ 185,018,151
============= =============
</TABLE>

See Notes to Financial Statements

-9-
<PAGE> 12
NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The Travelers Timed Growth and Income Stock Account for Variable Annuities
("Account TGIS") is a separate account of The Travelers Insurance Company ("The
Travelers"), an indirect wholly owned subsidiary of Travelers Group Inc., and is
available for funding certain variable annuity contracts issued by The
Travelers. Account TGIS is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company.
Participants in Account TGIS have entered into market timing service agreements
with an affiliate of The Travelers, which provide for the transfer of
participants' funds to certain other timed accounts of The Travelers, at the
discretion of the market timer.

The following is a summary of significant accounting policies consistently
followed by Account TGIS in the preparation of its financial statements.

SECURITY VALUATION. Investments in securities traded on a national securities
exchange are valued at the last-reported sale price as of the close of business
of the New York Stock Exchange on the last business day of the year; securities
traded on the over-the-counter market and listed securities with no reported
sales are valued at the mean between the last-reported bid and asked prices or
on the basis of quotations received from a reputable broker or other recognized
source.

When market quotations are not considered to be readily available for long-term
corporate bonds and notes, such investments are generally stated at fair value
on the basis of valuations furnished by a pricing service. These valuations are
determined for normal institutional-size trading units of such securities using
methods based on market transactions for comparable securities and various
relationships between securities which are generally recognized by institutional
traders. Securities, including restricted securities, for which pricing services
are not readily available are valued by management at prices which it deems in
good faith to be fair.

Short-term investments for which a quoted market price is available are valued
at market. Short-term investments for which there is no reliable quoted market
price are valued at amortized cost which approximates market.

SECURITY TRANSACTIONS. Security transactions are accounted for on the trade
date. Dividend income is recorded on the ex-dividend date. Interest income is
recorded on the accrual basis. Effective July 1, 1996, premiums and discounts
are amortized to interest income utilizing the constant yield method.

FUTURES CONTRACTS. Account TGIS may use stock index futures contracts, and may
also use interest rate futures contracts, as a substitute for the purchase or
sale of individual securities. When Account TGIS enters into a futures contract,
it agrees to buy or sell a specified index of stocks or debt securities at a
future time for a fixed price, unless the contract is closed prior to
expiration. Account TGIS is obligated to deposit with a broker an "initial
margin" equivalent to a percentage of the face, or notional value of the
contract.

It is Account TGIS's practice to hold cash and cash equivalents in an amount at
least equal to the notional value of outstanding purchased futures contracts,
less the initial margin. Cash and cash equivalents include cash on hand,
securities segregated under federal and brokerage regulations, and short-term
highly liquid investments with maturities generally three months or less when
purchased. Generally, futures contracts are closed prior to expiration.

Futures contracts purchased by Account TGIS are priced and settled daily;
accordingly, changes in daily prices are recorded as realized gains or losses
and no asset is recorded in the Statement of Investments. However, when Account
TGIS holds open futures contracts, it assumes a market risk generally equivalent
to the underlying market risk of change in the value of the specified indexes or
debt securities associated with the futures contract.

OPTIONS. Account TGIS may purchase index or individual equity put or call
options, thereby obtaining the right to sell or buy a fixed number of shares of
the underlying asset at the stated price on or before the stated expiration
date. Account TGIS may sell the options before expiration. Options held by
Account TGIS are listed on either national securities exchanges or on
over-the-counter markets, and are short-term contracts with a duration of less
than nine months. The market value of the options will be the latest sale price
at the close of the New York Stock Exchange, or in the absence of such sale, the
latest bid quotation.

-10-
<PAGE> 13
NOTES TO FINANCIAL STATEMENTS - CONTINUED

REPURCHASE AGREEMENTS. When Account TGIS enters into a repurchase agreement (a
purchase of securities whereby the seller agrees to repurchase the securities at
a mutually agreed upon date and price), the repurchase price of the securities
will generally equal the amount paid by Account TGIS plus a negotiated interest
amount. The seller under the repurchase agreement will be required to provide to
Account TGIS securities (collateral) whose market value, including accrued
interest, will be at least equal to 102% of the repurchase price. Account TGIS
monitors the value of collateral on a daily basis. Repurchase agreements will be
limited to transactions with national banks and reporting broker dealers
believed to present minimal credit risks. Account TGIS's custodian will take
actual or constructive receipt of all securities underlying repurchase
agreements until such agreements expire.

FEDERAL INCOME TAXES. The operations of Account TGIS form a part of the total
operations of The Travelers and are not taxed separately. The Travelers is taxed
as a life insurance company under the Internal Revenue Code of 1986, as amended
(the "Code"). Under the existing federal income tax law no taxes are payable on
the investment income and capital gains of Account TGIS. Account TGIS is not
taxed as "regulated investment company" under Subchapter M of the Code.

OTHER. The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

2. INVESTMENTS

The aggregate costs of purchases and proceeds from sales of investments (other
than short-term securities), were $99,064,269 and $114,099,423, respectively;
the costs of purchases and proceeds from sales of direct and indirect U.S.
government securities were $535,398 and $1,784,051, respectively, for the year
ended December 31, 1997. Realized gains and losses from investment security
transactions are reported on an identified cost basis.

Account TGIS placed a portion of its security transactions with brokerage firms
which are affiliates of The Travelers. The commissions paid to these affiliated
firms were $24,649 and $39,297 for the years ended December 31, 1997 and 1996,
respectively.

At December 31, 1997, Account TGIS held 155 open S&P 500 Stock Index futures
contracts expiring in March, 1998. The underlying face value, or notional value,
of these contracts at December 31, 1997 amounted to $37,940,125. In connection
with these contracts, short-term investments with a par value of $2,025,000 had
been pledged as margin deposits.

Net realized gains resulting from futures contracts were $6,907,342 and
$3,859,624 for the years ended December 31, 1997 and 1996, respectively. These
gains are included in the net realized gain from investment security
transactions on both the Statement of Operations and the Statement of Changes in
Net Assets. The cash settlement for December 31, 1997, is shown on the Statement
of Assets and Liabilities as a payable for variation on futures margin.

-11-
<PAGE> 14
NOTES TO FINANCIAL STATEMENTS - CONTINUED

3. CONTRACT CHARGES

Investment management and advisory fees are calculated daily at an annual rate
of 0.3233% of Account TGIS's average net assets. These fees are paid to The
Travelers Investment Management Company, an indirect wholly owned subsidiary of
Travelers Group Inc.

A market timing fee equivalent on an annual basis to 1.25% of the average net
assets of Account TGIS is deducted for market timing services. The Travelers
deducts the fee daily and, in turn, pays the fee to Copeland Financial Services,
Inc., a registered investment adviser and an affiliate of The Travelers which
provides market timing services to subscribing participants in Account TGIS.

Insurance charges are paid for the mortality and expense risks assumed by The
Travelers. These charges are equivalent to 1.25% of the average net assets of
Account TGIS on an annual basis. Additionally, for contracts in the accumulation
phase, a semi-annual charge of $15 (prorated for partial periods) is deducted
from participant account balances and paid to The Travelers to cover
administrative charges.

No sales charge is deducted from participant purchase payments when they are
received. However, The Travelers generally assesses a 5% contingent deferred
sales charge if a participant's purchase payment is surrendered within five
years of its payment date. Contract surrender payments include $94,019 and
$161,380 of contingent deferred sales charges for the years ended December 31,
1997 and 1996, respectively.

4. SUPPLEMENTARY INFORMATION
(Selected data for a unit outstanding throughout each year.)

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income................................ $ .075 $ .061 $ .083 $ .064 $ .043
Operating expenses..................................... .090 .069 .057 .041 .042
--------- --------- ---------- ---------- ---------

Net investment income (loss)........................... (.015) (.008) .026 .023 .001

Unit value at beginning of year........................ 2.717 2.263 1.695 1.776 1.689
Net realized and change in unrealized gains (losses)... .824 .462 .542 (.104) .086
--------- --------- ---------- ---------- ---------

Unit value at end of year.............................. $ 3.526 $ 2.717 $ 2.263 $ 1.695 $ 1.776
========= ========= ========== ========== =========

SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase (decrease) in unit value.................. $ .81 $ .45 $ .57 $ (.08) $ .09
Ratio of operating expenses to average net assets*..... 2.82 % 2.82 % 2.82 % 2.82 % 2.82 %
Ratio of net investment income (loss) to average net (.45) % (.34) % 1.37 % 1.58 % .08 %
assets*.................................................
Number of units outstanding at end of year 60,312 68,111 105,044 29,692 -
(thousands).............................................
Portfolio turnover rate................................ 63 % 81 % 79 % 19 % 70 %
Average commission rate paid+.......................... $ .053 $ .046 - - -
</TABLE>

* Annualized.

+ The average commission rate paid is a required disclosure for fiscal years
beginning after September 1, 1995. It is calculated by dividing the total
dollar amount of commissions paid for equity securities by the total number
of shares purchased and sold during the year.

-12-
<PAGE> 15
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCKS (81.3%)

AEROSPACE (1.4%)
Allied Signal, Inc. 12,400 $ 482,825
Boeing Co. 22,100 1,081,519
Lockheed Martin Corporation 4,500 443,250
United Technologies Corp. 12,700 924,719
--------------
2,932,313
--------------
AIRLINES (0.3%)
Continental Airlines, Inc. (A) 13,500 649,687
--------------

AUTOMOTIVE (2.1%)
Chrysler Corp. 15,500 545,406
Eaton Corp. 5,400 481,950
Ford Motor Co. 39,400 1,918,288
General Motors Corp. Class H 17,400 1,054,875
Navistar International Corp. (A) 16,100 399,481

--------------
4,400,000
--------------
BANKING (7.4%)
Banc One Corp. 6,520 354,118
Bank of New York Co., Inc. 8,500 491,406
BankAmerica Corp. 21,000 1,533,000
Bankers Trust NY Corp. 5,200 584,675
Barnett Banks Inc. 4,300 309,063
Chase Manhattan Corp. 9,824 1,075,728
Citicorp 10,100 1,277,019
Comerica Inc. 6,900 622,725
First Chicago NBD 3,700 308,950
First Empire State Corp. 800 372,000
First Union Corp. 13,700 702,125
Fleet Financial Group 5,800 434,637
Golden West Financial Corp. 6,900 674,906
KeyCorp 4,900 346,981
Mellon Bank Corp. 6,100 369,813
J.P. Morgan & Company 4,100 462,787
National City Corp. 5,000 328,750
NationsBank Corp. 17,000 1,033,812
Northern Trust Corp. 5,600 391,650
Norwest Corp. 17,200 664,350
PNC Bank Corp. 7,100 405,144
State Street Corp. 10,300 599,331
SunTrust Banks, Inc. 4,900 349,738
U.S. Bancorp 3,100 347,006
UnionBanCal Corp. 5,900 627,612
Washington Mutual 5,500 350,797
Wells Fargo & Co. 2,200 746,766
--------------
15,764,889
--------------
BEVERAGE (1.9%)
Anheuser-Busch Cos. 11,100 488,400
Coca-Cola Co. 54,200 3,611,075
--------------
4,099,475
--------------
BROKERAGE (1.8%)
MGIC Investment Corp. 12,000 798,000
Marsh & McLennan Cos. 8,300 618,869
Merrill Lynch & Co. 14,600 1,064,887
Morgan Stanley Group, Inc. 22,240 1,314,940
--------------
3,796,696
--------------

<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- --------------
<S> <C> <C>
BUILDING MATERIALS (0.3%)
Masco Corp. 14,700 $ 747,863
--------------

CAPITAL GOODS (2.2%)
Deere & Co. 13,800 804,713
Emerson Electric Co. 9,900 558,731
Honeywell, Inc. 8,100 554,850
Illinois Tool Works 12,300 739,538
Pitney Bowes, Inc. 7,600 683,525
Tellabs, Inc. (A) 10,400 548,924
Thiokol Corp. 6,500 528,125
Thomas & Betts Corp. 7,100 335,475
--------------
4,753,881
--------------
CHEMICALS (1.6%)
Crompton & Knowles Corp. 13,200 349,800
Dow Chemical 5,500 558,250
E.I. Dupont de Nemours & Co. 24,600 1,477,538
Lyondell Petrochemical 14,400 381,600
Monsanto Co. 13,000 546,000
--------------
3,313,188
--------------
CONSTRUCTION MACHINERY (0.2%)
Caterpillar, Inc. 9,000 437,063
--------------

CONSUMER (5.3%)
Archer-Daniels-Midland Co. 13,170 285,624
Colgate-Palmolive 11,800 867,300
General Electric Corp. 70,900 5,202,287
Gillette Co. 8,589 862,658
Meredith Corp. 11,800 421,113
Procter & Gamble Co. 31,100 2,482,169
Unilever N.V. 12,400 774,225
Whirlpool Corp. 7,800 429,000
--------------
11,324,376
--------------
CONSUMER SERVICES (0.8%)
AVX Corp. 11,100 204,656
Kimberly Clark Corp. 12,420 612,461
Knight-Ridder, Inc. 8,800 457,600
Rohm & Haas Co. 5,400 517,050
--------------
1,791,767
--------------
DEFENSE (0.2%)
Raytheon Co. Class A 1,110 54,717
Raytheon Co. Class B 9,200 464,600
--------------
519,317
--------------
ENTERTAINMENT (1.2%)
Brunswick Corp. 12,600 381,938
Walt Disney Co. 15,141 1,499,905
Mirage Resorts, Inc. (A) 12,000 273,000
U.S. Industries, Inc. 13,200 397,650
--------------
2,552,493
--------------
FINANCE (0.8%)
American Express Company 11,100 990,675
Torchmark Corp. 15,800 664,588

--------------
1,655,263
--------------
</TABLE>

-13-
<PAGE> 16
STATEMENT OF INVESTMENTS - CONTINUED

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- ----------
<S> <C> <C>
FOOD (2.7%)
Campbell Soup Co. 4,500 $ 261,563
ConAgra, Inc. 26,400 866,250
Dean Foods Co. 9,150 544,425
Interstate Bakeries Corp. 10,600 396,175
Kellogg Co. 9,400 466,475
McDonalds Corp. 6,500 310,375
PepsiCo, Inc. 35,100 1,278,956
Sara Lee Corp. 17,500 985,469
Sysco Corp. 13,000 592,312
----------
5,702,000
----------
HEALTHCARE (1.0%)
Beverly Enterprises (A) 22,700 295,100
Guidant Corp. 13,400 834,150
Health Management
Association Inc. (A) 16,650 420,412
Quorum Health Group (A) 13,738 360,623
Wellpoint Health Networks (A) 3,800 160,550
----------
2,070,835
----------
INDEPENDENT ENERGY (0.5%)
Burlington Resources, Inc. 12,800 573,600
Entergy Corp. 18,500 553,844
----------
1,127,444
----------
INDUSTRIAL (1.8%)
AccuStaff Inc. (A) 16,500 379,500
CBS Inc. 14,400 423,900
Fluor Corp. 9,000 336,375
MGM Grand Inc. (A) 4,900 176,706
Mercury General Corp. 7,300 403,325
Minnesota Mining &
Manufacturing Co. 6,000 492,375
National Services Industry, Inc. 9,000 446,063
Textron, Inc. 11,100 693,750
Tyco International, Ltd. 12,400 558,775
----------
3,910,769
----------
INSURANCE (3.3%)
Allstate Corp. 10,038 912,203
AMBAC, Inc. 8,200 377,200
American International Group 19,575 2,128,781
Choicepoint Inc. (A) 310 14,803
Conseco, Inc. 11,700 531,619
Equitable Cos., Inc. 11,400 567,150
Everest Reinsurance Holdings 12,800 528,000
Hartford Financial Services Group 6,700 626,869
Health Care & Retirement Corp. (A) 8,900 358,225
SunAmerica, Inc. 8,450 361,237
Transatlantic Holdings, Inc. 4,790 342,485
20th Century Industries 14,000 364,000
----------
7,112,572
----------
INTEGRATED ENERGY (5.5%)
Amoco Corp. 10,800 919,350
Atlantic Richfield Co. 7,500 600,938
Chevron Corp. 14,500 1,116,500
Exxon Corp. 51,900 3,175,631
Mobil Corp. 17,400 1,256,062
Phillips Petroleum Co. 6,000 291,750
Royal Dutch Petroleum Co. 38,000 2,059,125

<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- ------------
<S> <C> <C>
INTEGRATED ENERGY (CONTINUED)
Texaco, Inc. 20,400 $ 1,109,250
USX-Marathon Group 16,600 560,250
Unocal Corp. 17,200 667,575
-----------
11,756,431
-----------
MEDIA (2.0%)
Chancellor Media Corp. (A) 5,700 425,540
Clear Channel Communications (A) 8,000 635,500
Gannet Co. 12,900 797,381
King World Productions, Inc. 4,700 271,425
New York Times Co. 12,600 833,175
Time Warner, Inc. 19,300 1,196,600
-----------
4,159,621
-----------
METALS (1.1%)
Aeroquip-Vickers, Inc. 7,461 366,055
Alumax Inc. (A) 9,200 312,800
Aluminum Co. of America 6,000 422,250
Bethlehem Steel Corp. (A) 36,900 318,263
LTV Corp. 15,400 150,150
Phelps Dodge Corp. 5,900 367,275
USX-U.S. Steel Group 14,200 443,750
-----------
2,380,543
-----------
NATURAL GAS PIPELINE (0.6%)
Columbia Gas Systems, Inc. 5,800 455,663
Enron Corp. 7,200 299,250
Sonat, Inc. 10,600 484,950
-----------
1,239,863
-----------
OIL FIELD (0.6%)
BJ Services Co. (A) 4,324 311,058
Schlumberger Ltd. 10,800 869,400
-----------
1,180,458
-----------
PAPER (0.5%)
Georgia-Pacific Corp. 5,900 358,425
Georgia-Pacific Timber (A) 5,900 133,856
International Paper Co. 6,700 288,938
Weyerhaeuser Co. 4,500 220,781
-----------
1,002,000
-----------
PHARMACEUTICALS (8.3%)
Abbott Laboratories 11,000 721,187
American Home Products Corp. 19,900 1,522,350
Baxter International, Inc. 6,600 332,888
Bristol-Myers Squibb Co. 26,700 2,526,487
CVS Corp. 12,700 813,594
Johnson & Johnson 35,700 2,351,737
Lilly (Eli) & Co. 20,400 1,420,350
Merck & Co. 28,000 2,975,000
Omnicare, Inc. 11,600 359,600
Pfizer, Inc. 25,060 1,868,536
PharMerica, Inc. (A) 10,331 108,150
Schering-Plough Corp. 23,300 1,447,512
Warner-Lambert Co. 8,800 1,091,200
-----------
17,538,591
-----------
RAILROADS (0.4%)
Burlington Northern Santa Fe 3,400 315,987
Norfolk Southern Corp. 8,700 268,069
Union Pacific Corp. 4,800 299,700
-----------
883,756
-----------
</TABLE>

-14-
<PAGE> 17
STATEMENT OF INVESTMENTS - CONTINUED

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
-------- -----------
<S> <C> <C>
RETAILERS (3.7%)
Borders Group, Inc. (A) 11,800 $ 369,488
Costco Companies, Inc. (A) 17,300 771,471
Dayton Hudson Corp. 10,500 708,750
Family Dollar Stores, Inc. 15,800 463,138
Federated Department
Stores, Inc. (A) 12,700 546,894
The Gap, Inc. 9,450 334,884
Home Depot, Inc. 16,800 989,100
Liz Claiborne, Inc. 8,800 367,950
Ross Stores, Inc. 9,900 360,731
Stride Rite Corp. 400 4,800
TJX Companies, Inc. 14,800 508,750
Wal-Mart Stores, Inc. 51,800 2,042,862
Walgreen Co. 12,600 395,325
-----------
7,864,143
-----------
SERVICES (3.2%)
Cendant Corp. (A) 29,558 1,016,061
HealthCare COMPARE Corp. (A) 3,200 164,400
HBO & Co. 15,100 724,327
Lincare Holdings, Inc. (A) 7,000 400,750
Microsoft (A) 30,500 3,941,170
Oracle Corp. (A) 21,600 481,274
-----------
6,727,982
-----------
SUPERMARKETS (0.5%)
Albertson's Inc. 21,200 1,004,350
-----------

TECHNOLOGY (7.0%)
Applied Materials, Inc. (A) 19,800 595,855
Cisco Systems, Inc. (A) 21,750 1,213,922
Compaq Computer Corp. 28,550 1,611,291
Computer Associates 7,900 417,712
International
Dell Computer Corp. (A) 8,000 672,250
Equifax, Inc. 3,100 109,856
Hewlett-Packard Co. 18,000 1,125,000
Intel Corp. 33,800 2,373,392
International Business
Machines Corp. 23,200 2,425,850
Motorola, Inc. 13,400 764,637
Parker-Hannifin Corp. 10,400 477,100
Raychem Corp. 11,400 490,912
SCI Systems (A) 7,800 339,788
Shared Medical System Corp. 7,300 481,800
Sun Microsystems (A) 7,900 315,506
Texas Instruments, Inc. 8,800 396,000
VLSI Technology, Inc. (A) 20,400 481,950
Xerox Corp. 7,600 560,975
-----------
14,853,796
-----------
TELECOMMUNICATIONS (6.8%)
AT&T Corp. 37,600 2,303,000
Airtouch Communications (A) 11,800 490,437
Ameritech Corp. 12,600 1,014,300
Bell Atlantic Corp. 17,680 1,608,880
BellSouth Corp. 22,700 1,278,294
GTE Corp. 22,200 1,159,950
Lucent Technologies 13,884 1,108,984
MCI Communications Corp. 15,400 659,793
Northern Telecom., Ltd. 5,700 507,300
SBC Communications, Inc. 27,775 2,034,519
Sprint Corp. 10,000 586,250

<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- -----------
<S> <C> <C>
TELECOMMUNICATIONS (CONTINUED)
U S West Communications Group 10,500 $ 473,812
WorldCom, Inc. (A) 38,100 1,153,714
-----------
14,379,233
-----------
TEXTILE (0.1%)
Jones Apparel Group, Inc. (A) 6,200 266,600
-----------

TOBACCO (1.5%)
Loews Corp. 5,700 604,913
Philip Morris, Inc. 55,600 2,519,375
-----------
3,124,288
-----------
U.S. AGENCY (0.8%)
Federal Home Loan Mortgage
Corp. 16,800 704,550
Federal National Mortgage
Association 16,700 952,944
-----------
1,657,494
-----------
UTILITIES (1.9%)
Baltimore Gas & Electric Co. 14,300 487,094
Duke Power Co. 4,500 249,188
Edison International 27,700 753,094
ENSCO International, Inc. 8,600 288,100
FPL Group, Inc. 11,900 704,331
Houston Industries 6,000 160,125
MidAmerican Energy Holding Co. 10,300 226,600
PacifiCorp 6,300 172,069
Southern Co. 15,300 395,887
Texas Utilities Co. 12,000 498,750
-----------
3,935,238
-----------
TOTAL COMMON STOCKS
(COST $123,336,127) 172,616,278
-----------

PRINCIPAL
AMOUNT
----------
SHORT-TERM INVESTMENTS (18.7%)

COMMERCIAL PAPER (17.8%)
Asset Securitization Corp.,
6.05% due January 21, 1998 $ 2,000,000 1,993,610
Asset Securitization Corp.,
6.24% due January 28, 1998 1,000,000 995,741
Asset Securitization Corp.,
5.88% due February 2, 1998 2,000,000 1,989,960
BHP Finance (USA), Inc.,
5.83% due January 27, 1998 1,636,000 1,629,281
BHP Finance (USA), Inc.,
5.83% due January 28, 1998 3,000,000 2,987,223
Corporate Receivables Corp.,
5.85% due January 8, 1998 2,000,000 1,997,474
Corporate Receivables Corp.,
5.93% due February 25, 1998 1,000,000 991,482
Dillard Investment Co., Inc.,
5.99% due January 6, 1998 2,245,000 2,242,852
Dillard Investment Co., Inc.,
5.84% due January 21, 1998 1,259,000 1,254,977
</TABLE>

-15-
<PAGE> 18
STATEMENT OF INVESTMENTS - CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
COMMERCIAL PAPER (CONTINUED)
General Electric Capital Corp.,
5.93% due January 13, 1998 $ 4,500,000 $ 4,491,004
IMI Funding Corp. (USA),
5.86% due January 14, 1998 1,830,000 1,826,082
Morgan Stanley Group, Inc.,
5.85% due January 22, 1998 2,000,000 1,993,306
Pearson, Inc.,
5.96% due January 5, 1998 1,370,000 1,368,903
Progress Capital Holdings, Inc.,
5.99% due January 14, 1998 2,878,000 2,871,838
Prudential Funding Corp.,
5.83% due March 3, 1998 2,000,000 1,981,138
Sherwin Williams Co.,
5.83% due January 15, 1998 2,000,000 1,995,436
UBS Financial, Inc.,
6.85% due January 2, 1998 5,137,000 5,135,325
-----------
37,745,632
-----------
U.S. TREASURY (0.9%)
United States of America Treasury,
5.61% due July 23, 1998 (B) 2,025,000 1,965,686
-----------

TOTAL SHORT-TERM
INVESTMENTS (COST $39,709,509) 39,711,318
-----------

NOTIONAL
VALUE
----------
FUTURES CONTRACTS (0.0%)

S&P 500 Stock Index,
Exp. March, 1998 (C) $ 37,940,125 --
-------------

TOTAL INVESTMENTS (100%)
(COST $163,045,636) (D) $ 212,327,596
=============
</TABLE>

NOTES

(A) Non-income Producing Security.

(B) Par value of $2,025,000 pledged to cover margin deposits on futures
contracts.

(C) As more fully discussed in Note 1 to the financial statements, it is
Account TGIS's practice to hold cash and cash equivalents (including
short-term investments) at least equal to the underlying face value, or
notional value, of outstanding purchased futures contracts, less the
initial margin. Account TGIS uses futures contracts as a substitute for
holding individual securities.

(D) At December 31, 1997, net unrealized appreciation for all securities was
$49,281,960. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over cost of
$50,667,517 and aggregate gross unrealized depreciation for all securities
in which there was an excess of cost over market value of $1,385,557.

See Notes to Financial Statements

-16-
<PAGE> 19

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Managers and Owners of Variable Annuity Contracts of The
Travelers Timed Growth and Income Stock Account for Variable Annuities:

We have audited the accompanying statement of assets and liabilities of The
Travelers Timed Growth and Income Stock Account for Variable Annuities,
including the statement of investments, as of December 31, 1997, and the related
statement of operations for the year then ended, the statement of changes in net
assets for each of the two years in the period then ended, and the selected per
unit data and ratios for each of the five years in the period then ended. These
financial statements, per unit data and ratios are the responsibility of
management. Our responsibility is to express an opinion on these financial
statements, per unit data and ratios based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements, per unit data and
ratios are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements, per unit data and ratios referred to
above present fairly, in all material respects, the financial position of The
Travelers Timed Growth and Income Stock Account for Variable Annuities as of
December 31, 1997, the results of its operations for the year then ended, the
changes in its net assets for each of the two years in the period then ended,
and the per unit data and ratios for each of the five years in the period then
ended, in conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Hartford, Connecticut
February 19, 1998

-17-
<PAGE> 20
THE TRAVELERS
TIMED SHORT-TERM
BOND ACCOUNT
FOR VARIABLE ANNUITIES

The year 1997 seemed to catch investors by surprise at almost every turn; it was
a year filled with both highs and lows. The unemployment rate hit a 24-year low
of 4.6%, inflation reached a 10-year low of 1.7%, and Gross Domestic Product
growth remained strong at 3.9%. At year end the 30-year Treasury bond yield was
5.92% and the federal funds rate was 5.50%. It appeared to be only a matter of
time before the Federal Reserve Board ("Fed") intervened and raised the federal
funds rate. However, as a result of the Asian crisis in October, it appears
economic growth has slowed enough to put a rate hike on hold.

It is unclear what the next Fed move will be, however we expect the Fed to
remain on the sidelines for the next six months. The strategy in the management
of The Travelers Timed Short-Term Bond Account for Variable Annuities'
short-term assets will be to extend maturities from the current average of 23
days, to between 60 and 90 days. At year end the asset size of the portfolio was
$66.2 million with an average yield of 5.88%.

PORTFOLIO MANAGER: EMIL J. MOLINARO JR.

[TIMCO LOGO]

-18-
<PAGE> 21
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997
<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (cost $66,196,493) ........ $66,197,944
Receivables:
Investment securities sold ..................................... 4,276,000
Purchase payments and transfers from other Travelers accounts .. 14,304
Other assets ..................................................... 368
-----------

Total Assets ................................................. 70,488,616
-----------

LIABILITIES:
Cash overdraft ................................................... 36,446
Payables:
Investment securities purchased ................................ 4,236,411
Contract surrenders and transfers to other Travelers accounts .. 41,108
Investment management and advisory fees ........................ 1,178
Market timing fees ............................................. 15,864
Accrued liabilities .............................................. 6,034
-----------

Total Liabilities ............................................ 4,337,041
-----------

NET ASSETS:
(Applicable to 47,261,742 units outstanding at $1.399 per unit).. $66,151,575
===========
</TABLE>

See Notes to Financial Statements

-19-
<PAGE> 22
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest................................................................ $ 4,274,494

EXPENSES:
Market timing fees...................................................... $ 956,347
Investment management and advisory fees................................. 248,469
Insurance charges....................................................... 956,347
---------------
Total expenses...................................................... 2,161,163
--------------

Net investment income............................................ 2,113,331
--------------

REALIZED LOSS AND CHANGE IN UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES:
Realized loss from investment security transactions:
Proceeds from investment securities sold............................ 72,946,850
Cost of investment securities sold.................................. 72,947,186
---------------

Net realized loss................................................ (336)

Change in unrealized gain (loss) on investment securities:
Unrealized loss at December 31, 1996................................ (10,334)
Unrealized gain at December 31, 1997................................ 1,451

-------------

Net change in unrealized gain (loss) for the year................. 11,785
--------------

Net realized loss and change in unrealized gain (loss)........... 11,449
--------------

Net increase in net assets resulting from operations.................... $ 2,124,780
==============
</TABLE>

See Notes to Financial Statements

-20-
<PAGE> 23
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
---- ----

<S> <C> <C>
OPERATIONS:
Net investment income ....................................................... $ 2,113,331 $ 2,112,194
Net realized gain (loss) from investment security transactions .............. (336) 19,963
Net change in unrealized gain (loss) on investment securities ............... 11,785 (10,334)
------------ -------------

Net increase in net assets resulting from operations .................... 2,124,780 2,121,823
------------ -------------

UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 2,871,021 and 3,580,147 units, respectively) ............. 3,957,433 4,822,829
Participant transfers from other Travelers accounts
(applicable to 1,695,500 and 805,634 units, respectively) ............... 2,349,190 1,084,231
Market timing transfers from other Travelers timed accounts
(applicable to 46,933,510 and 127,845,161 units, respectively) .......... 64,283,327 171,245,508
Administrative charges
(applicable to 57,421 and 85,517 units, respectively) ................... (79,709) (115,494)
Contract surrenders
(applicable to 4,875,179 and 4,878,210 units, respectively) ............. (6,710,909) (6,581,955)
Participant transfers to other Travelers accounts
(applicable to 5,843,389 and 10,743,375 units, respectively) ............ (8,038,607) (14,473,627)
Market timing transfers to other Travelers timed accounts
(applicable to 47,867,671 and 61,747,981 units, respectively) ........... (65,788,808) (83,544,949)
Other payments to participants
(applicable to 159,816 and 210,672 units, respectively) ................. (219,800) (283,688)
------------ -------------

Net increase (decrease) in net assets resulting from unit transactions .. (10,247,883) 72,152,855
------------ -------------

Net increase (decrease) in net assets ................................ (8,123,103) 74,274,678

NET ASSETS:
Beginning of year ........................................................... 74,274,678 --
------------ -------------

End of year ................................................................. $ 66,151,575 $ 74,274,678
============ =============
</TABLE>

See Notes to Financial Statements

-21-
<PAGE> 24
NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The Travelers Timed Short-Term Bond Account for Variable Annuities ("Account
TSB"), is a separate account of The Travelers Insurance Company ("The
Travelers"), an indirect wholly owned subsidiary of Travelers Group Inc., and is
available for funding certain variable annuity contracts issued by The
Travelers. Account TSB is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company.
Participants in Account TSB have entered into market timing service agreements
with an affiliate of The Travelers, which provide for the transfer of
participants' funds to certain other timed accounts of The Travelers, at the
discretion of the market timers.

The following is a summary of significant accounting policies consistently
followed by Account TSB in the preparation of its financial statements.

When market quotations are not considered to be readily available for long-term
corporate bonds and notes, such investments are generally stated at fair value
on the basis of valuations furnished by a pricing service. These valuations are
determined for normal institutional-size trading units of such securities, using
methods based on market transactions for comparable securities and various
relationships between securities which are generally recognized by institutional
traders. Securities, including restricted securities, for which pricing services
are not readily available, are valued by management at prices which it deems in
good faith to be fair.

SECURITY TRANSACTIONS. Security transactions are accounted for on the trade
date. Interest income is recorded on the accrual basis. Effective July 1, 1996,
premiums and discounts are amortized to interest income utilizing the constant
yield method.

REPURCHASE AGREEMENTS. When Account TSB enters into a repurchase agreement (a
purchase of securities whereby the seller agrees to repurchase the securities at
a mutually agreed upon date and price), the repurchase price of the securities
will generally equal the amount paid by Account TSB plus a negotiated interest
amount. The seller under the repurchase agreement will be required to provide to
Account TSB securities (collateral) whose market value, including accrued
interest, will be at least equal to 102% of the repurchase price. Account TSB
monitors the value of collateral on a daily basis. Repurchase agreements will be
limited to transactions with national banks and reporting broker dealers
believed to present minimal credit risks. Account TSB's custodian will take
actual or constructive receipt of all securities underlying repurchase
agreements until such agreements expire.

FEDERAL INCOME TAXES. The operations of Account TSB form a part of the total
operations of The Travelers and are not taxed separately. The Travelers is taxed
as a life insurance company under the Internal Revenue Code of 1986, as amended
(the "Code"). Under existing federal income tax law, no taxes are payable on the
investment income and capital gains of Account TSB. Account TSB is not taxed as
a "regulated investment company" under Subchapter M of the Code.

2. INVESTMENTS

Realized gains and losses from investment security transactions are reported on
an identified cost basis.

-22-
<PAGE> 25
NOTES TO FINANCIAL STATEMENTS - CONTINUED

3. CONTRACT CHARGES

Investment management and advisory fees are calculated daily at an annual rate
of 0.3233% of Account TSB's average net assets. These fees are paid to The
Travelers Investment Management Company, an indirect wholly owned subsidiary of
Travelers Group Inc.

A market timing fee equivalent on an annual basis to 1.25% of the average net
assets of Account TSB is deducted for market timing services. The Travelers
deducts the fee daily and, in turn, pays the fee to Copeland Financial Services,
Inc., a registered investment adviser and an affiliate of The Travelers which
provides market timing services to subscribing participants in Account TSB.

Insurance charges are paid for the mortality and expense risks assumed by The
Travelers. These charges are equivalent to 1.25% of the average net assets of
Account TSB on an annual basis. Additionally, for contracts in the accumulation
phase, a semi-annual charge of $15 (prorated for partial periods) is deducted
from participant account balances and paid to The Travelers to cover
administrative charges.

No sales charge is deducted from participant purchase payments when they are
received. However, The Travelers generally assesses a 5% contingent deferred
sales charge if a participant's purchase payment is surrendered within five
years of its payment date. Contract surrender payments include $56,053 and
$72,688 of contingent deferred sales charges for the years ended December 31,
1997 and 1996, respectively.

4. SUPPLEMENTARY INFORMATION
(Selected data for a unit outstanding throughout each year.)

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income................................. $ .077 $ .057 $ .074 $ .055 $ .041
Operating expenses...................................... .039 .030 .035 .036 .037
--------- --------- ---------- ---------- ---------

Net investment income................................... .038 .027 .039 .019 .004

Unit value at beginning of year......................... 1.361 1.333 1.292 1.275 1.271
Net realized and change in unrealized gains (losses)*... .000 .001 .002 (.002) -
--------- ---------- ---------- --------- ---------
Unit value at end of year............................... $ 1.399 $ 1.361 $ 1.333 $ 1.292 $ 1.275
========= ========= ========== ========== =========

SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase in unit value.............................. $ .04 $ .03 $ .04 $ .02 $ -
Ratio of operating expenses to average net assets**..... 2.82% 2.82% 2.82% 2.82% 2.82%
Ratio of net investment income to average net assets**.. 2.77% 2.47% 3.17% 1.45% .39%
Number of units outstanding at end of year (thousands).. 47,262 54,565 - 216,713 353,374
</TABLE>

* Effective May 2, 1994, Account TSB was authorized to invest in securities
with a maturity of greater than one year. As a result, net realized and
change in unrealized gains (losses) are no longer included in total
investment income.

** Annualized.

-23-
<PAGE> 26
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- -----------
<S> <C> <C>
SHORT-TERM INVESTMENTS (100%)

COMMERCIAL PAPER (100%)
Asset Securitization Corp.,
6.05% due January 21, 1998 $1,524,000 $ 1,519,131
Associate Corp. of North America,
5.83% due January 16, 1998
3,000,000 2,992,698
BHP Finance (USA), Inc.,
5.83% due January 27, 1998 2,864,000 2,852,238
Ciesco LP,
6.05% due January 9, 1998 3,000,000 2,995,761
Corporate Asset Funding Co.,
5.97% due January 29, 1998 5,000,000 4,977,945
Corporate Receivables Corp.,
5.85% due January 8, 1998 2,000,000 1,997,474
General Electric Capital Corp.,
5.85% due January 22, 1998 5,025,000 5,008,181
General Mills, Inc.,
5.83% due January 9, 1998 2,000,000 1,997,174
Goldman Sachs Group LP,
5.96% due January 22, 1998 5,020,000 5,003,198
Household Finance Corp.,
5.93% due January 12, 1998 3,000,000 2,994,435
J.P. Morgan & Company,
5.91% due January 5, 1998 4,000,000 3,996,796
Merrill Lynch & Co.,
5.87% due March 3, 1998 5,000,000 4,952,845
Morgan Stanley Group, Inc.,
5.92% due January 13, 1998 4,000,000 3,992,004
Pearson, Inc.,
5.96% due January 12, 1998 3,000,000 2,994,435
Prudential Funding Corp.,
5.86% due February 24, 1998 5,000,000 4,958,170
Seagram Joseph E. & Sons Inc.,
5.93% due February 2, 1998 1,700,000 1,691,466
Sherwin Williams Co.,
5.83% due January 15, 1998 4,000,000 3,990,872
Transamerica Financial Corp.,
5.85% due January 29, 1998 3,060,000 3,046,502
UBS Financial, Inc.,
6.85% due January 2, 1998 4,238,000 4,236,619
-----------
TOTAL INVESTMENTS (100%)
(COST $66,196,493) $66,197,944
===========
</TABLE>

See Notes to Financial Statements

-24-
<PAGE> 27

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Managers and Owners of Variable Annuity Contracts of The
Travelers Timed Short-Term Bond Account for Variable Annuities:

We have audited the accompanying statement of assets and liabilities of The
Travelers Timed Short-Term Bond Account for Variable Annuities, including the
statement of investments, as of December 31, 1997, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the selected per unit data
and ratios for each of the five years in the period then ended. These financial
statements, per unit data and ratios are the responsibility of management. Our
responsibility is to express an opinion on these financial statements, per unit
data and ratios based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements, per unit data and
ratios are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1997, by correspondence with the custodian. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements, per unit data and ratios referred to
above present fairly, in all material respects, the financial position of The
Travelers Timed Short-Term Bond Account for Variable Annuities as of December
31, 1997, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the per
unit data and ratios for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Hartford, Connecticut
February 19, 1998

-25-
<PAGE> 28
THE TRAVELERS
TIMED AGGRESSIVE
STOCK ACCOUNT
FOR VARIABLE ANNUITIES

The Travelers Timed Aggressive Stock Account For Variable Annuities ("Account
TAS") is managed by The Travelers Investment Management Company ("TIMCO"). TIMCO
manages Account TAS to provide diversified exposure to the mid- and
small-capitalization sector of the U.S. equity market, while maintaining a
highly marketable portfolio of common stocks and related financial instruments
in order to accommodate cash flows associated with market-timing moves. Stock
selection is based on a disciplined quantitative screening process that favors
companies which achieve earnings growth above consensus expectations and whose
shares offer attractive relative value. In order to achieve consistent relative
performance, we manage Acoount TAS to mirror the overall risk, sector weightings
and growth/value style characteristics of the Standard & Poor's 400 MidCap Stock
Index ("S&P 400"). The S&P 400 is a value-weighted index comprised of mid- and
small-company stocks.

For the year ended December 31, 1997, Account TAS achieved a total return of
32.4%, before fees and expenses, comparing favorably to the 32.3% total return
of the S&P 400. Net of fees and expenses, Account TAS's total return of 29.2%
for the year was well ahead of the 11.9% average return achieved by variable
annuity stock funds in the Lipper Capital Appreciation Mid Cap Category.

During the second half of 1997, stock selection in the consumer discretionary
and technology sectors made the strongest positive contribution to Account TAS's
overall relative performance. In the consumer discretionary sector, our biggest
relative performance gain came from our overweighted positions in a number of
specialty retailers, including Family Dollar Stores and TJX Companies, which
benefited from a strong domestic economy and healthy trends in consumer
spending. Account TAS was also helped by solid advertising trends and merger
activity in the newspaper and media industries, which boosted the stocks of New
York Times and Chancellor Media respectively.

In the technology sector, where investors became increasingly concerned about
the negative impact of the Asian economic crisis on earnings and growth rates,
our underweight position in semiconductor and semiconductor equipment stocks
helped Account TAS's returns. Computer software holdings such as Policy
Management Services and BMC Software rose on strong fundamentals, positive
earnings surprises and attractive valuations.

We lost ground to the benchmark primarily in the transportation and basic
materials sectors. In the transportation sector, we were hurt by an underweight
in Kansas City Southern, a railroad and financial services company which
benefited first from the strong performance of its money management operations
and then from the decision to separate into two entities. In basic materials,
the Asian crisis led to plummeting commodity prices and pressured stocks in the
gold, copper, aluminum, paper and steel industries, as investors began to
discount weaker 1998 earnings. Account TAS's holdings which suffered as a
result, included Boise Cascade, a paper and forest product manufacturer, and
USX-U.S. Steel Group, the nation's largest steel manufacturer.

We expect that the uncertainty on the earnings front as a result of the Asian
crisis will sustain the high level of volatility that we saw in 1997, a year
which saw the Dow Jones Industrial Average Index move up or down by more than 1%
every third trading day on average. We remain cautious about the stock market in
the short run. Over the long term, a friendly interest rate environment and
reasonable earnings strength preclude the prospect of a sustained bear market.

-26-
<PAGE> 29
The early earnings season appears to be on track with no major disappointments.
Bellwether technology stocks such as Intel and Motorola have reported earnings
that have come close to expectations. The market is likely to take its lead from
the technology sector which has been hardest hit by earnings concerns relating
to Asia. We are closely monitoring the earnings season to diagnose early
symptoms of the Asian flu. In this environment, we believe that it is
particularly important to identify companies with sustainable earnings growth at
attractive valuations across a wide variety of industries.

Our disciplined approach to stock selection emphasizes stocks that exhibit
improving fundamentals as measured by changes in analysts' earnings estimates
and the trend of recent earnings surprises, and which also trade at a reasonable
price-to-earnings ratio relative to expected earnings growth rates. In the
technology sector, we are maintaining our overweight in VLSI, a leading designer
and manufacturer of semiconductors used in wireless and digital
telecommunications applications.

In the healthcare sector, we hold McKesson, the nation's largest wholesale drug
distributor, which is growing rapidly through acquisitions and market share
gains. In the consumer sector, our focus remains on diversified media companies
like New York Times, as well as retailers that demonstrate above-average sales
and earnings momentum, including Costco, TJX and Borders Group. In
transportation, we emphasize Lear, a leading supplier of automotive interior and
seating systems to the auto industry, with rising earnings and an attractive
valuation.

PORTFOLIO MANAGERS: SANDIP A. BHAGAT, CFA - JACOB E. HURWITZ, CFA

[TIMCO LOGO]

-27-
<PAGE> 30
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1997

<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (cost $73,512,010).................................. $ 88,590,437
Cash .................................................................................... 71,903
Receivables:
Dividends.............................................................................. 57,959
Investment securities sold............................................................. 3,251,063
Purchase payments and transfers from other Travelers accounts.......................... 8,014
Variation on futures margin............................................................ 74,900
-----------------

Total Assets........................................................................ 92,054,276
-----------------

LIABILITIES:
Payables:
Investment securities purchased........................................................ 4,368,098
Contract surrenders and transfers to other Travelers accounts.......................... 16,402
Investment management and advisory fees................................................ 1,654
Market timing fees..................................................................... 20,311
Accrued liabilities........................................................................ 6,739
-----------------

Total Liabilities................................................................... 4,413,204
-----------------

NET ASSETS:
(Applicable to 25,864,540 units outstanding at $3.389 per unit)........................... $ 87,641,072
=================
</TABLE>

See Notes to Financial Statements

-28-
<PAGE> 31
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends............................................................... $ 733,520
Interest................................................................ 965,353
-----------------
Total income........................................................ $ 1,698,873

EXPENSES:
Market timing fees...................................................... 1,004,381
Investment management and advisory fees................................. 281,157
Insurance charges....................................................... 1,004,381
-----------------
Total expenses...................................................... 2,289,919
-----------------

Net investment loss.............................................. (591,046)
-----------------

REALIZED GAIN AND CHANGE IN UNREALIZED GAIN ON
INVESTMENT SECURITIES:
Realized gain from investment security transactions:
Proceeds from investment securities sold............................ 81,303,873
Cost of investment securities sold.................................. 66,533,101
-----------------

Net realized gain................................................ 14,770,772

Change in unrealized gain on investment securities:
Unrealized gain at December 31, 1996................................ 9,464,831
Unrealized gain at December 31, 1997................................ 15,078,427
---------------

Net change in unrealized gain for the year....................... 5,613,596
-----------------

Net realized gain and change in unrealized gain.............. 20,384,368
-----------------

Net increase in net assets resulting from operations.................... $ 19,793,322
=================
</TABLE>

See Notes to Financial Statements

-29-
<PAGE> 32
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
---- ----

<S> <C> <C>
OPERATIONS:
Net investment loss .............................................. $ (591,046) $ (856,906)
Net realized gain from investment security transactions .......... 14,770,772 12,529,601
Net change in unrealized gain on investment securities ........... 5,613,596 (241,053)
------------ -------------

Net increase in net assets resulting from operations ......... 19,793,322 11,431,642
------------ -------------

UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 1,773,947 and 3,129,051 units, respectively) .. 5,233,718 7,526,237
Participant transfers from other Travelers accounts
(applicable to 343,016 and 278,752 units, respectively) ...... 1,050,497 669,093
Market timing transfers from other Travelers timed accounts
(applicable to 6,455,170 and 6,967,148 units, respectively) .. 17,684,347 18,098,875
Administrative charges
(applicable to 38,438 and 54,428 units, respectively) ........ (117,747) (138,199)
Contract surrenders
(applicable to 1,793,810 and 1,838,951 units, respectively) .. (5,349,748) (4,446,573)
Participant transfers to other Travelers accounts
(applicable to 3,726,120 and 6,716,867 units, respectively) .. (11,042,553) (16,166,563)
Market timing transfers to other Travelers timed accounts
(applicable to 7,255,179 and 17,104,352 units, respectively).. (18,527,841) (40,404,417)
Other payments to participants
(applicable to 61,544 and 68,124 units, respectively) ........ (201,368) (171,099)
------------ -------------

Net decrease in net assets resulting from unit transactions .. (11,270,695) (35,032,646)
------------ -------------

Net increase (decrease) in net assets ..................... 8,522,627 (23,601,004)

NET ASSETS:
Beginning of year ................................................ 79,118,445 102,719,449
------------ -------------

End of year ...................................................... $ 87,641,072 $ 79,118,445
============ =============
</TABLE>

See Notes to Financial Statements

-30-
<PAGE> 33
NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The Travelers Timed Aggressive Stock Account for Variable Annuities ("Account
TAS") is a separate account of The Travelers Insurance Company ("The
Travelers"), an indirect wholly owned subsidiary of Travelers Group Inc., and is
available for funding certain variable annuity contracts issued by The
Travelers. Account TAS is registered under the Investment Company Act of 1940,
as amended, as a diversified, open-end management investment company.
Participants in Account TAS have entered into market timing service agreements
with an affiliate of The Travelers, which provide for the transfer of
participants' funds to certain other timed accounts of The Travelers, at the
discretion of the market timers.

The following is a summary of significant accounting policies consistently
followed by Account TAS in the preparation of its financial statements.

FUTURES CONTRACTS. Account TAS may use stock index futures contracts, and may
also use interest rate futures contracts, as a substitute for the purchase or
sale of individual securities. When Account TAS enters into a futures contract,
it agrees to buy or sell a specified index of stocks, or debt securities, at a
future time for a fixed price, unless the contract is closed prior to
expiration. Account TAS is obligated to deposit with a broker an "initial
margin" equivalent to a percentage of the face, or notional value of the
contract.

It is Account TAS's practice to hold cash and cash equivalents in an amount at
least equal to the notional value of outstanding purchased futures contracts,
less the initial margin. Cash and cash equivalents include cash on hand,
securities segregated under federal and brokerage regulations, and short-term
highly liquid investments with maturities generally three months or less when
purchased. Generally, futures contracts are closed prior to expiration.

Futures contracts purchased by Account TAS are priced and settled daily;
accordingly, changes in daily prices are recorded as realized gains or losses
and no asset is recorded in the Statement of Investments. However, when Account
TAS holds open futures contracts, it assumes a market risk generally equivalent
to the underlying market risk of change in the value of the specified indexes or
debt securities associated with the futures contract.

OPTIONS. Account TAS may purchase index or individual equity put or call
options, thereby obtaining the right to sell or buy a fixed number of shares of
the underlying asset at the stated price on or before the stated expiration
date. Account TAS may sell the options before expiration. Options held by
Account TAS are listed on either national securities exchanges or on
over-the-counter markets, and are short-term contracts with a duration of less
than nine months. The market value of the options will be the latest sale price
at the close of the New York Stock Exchange, or, in the absence of such sale,
the latest bid quotation.

-31-
<PAGE> 34
NOTES TO FINANCIAL STATEMENTS - CONTINUED

REPURCHASE AGREEMENTS. When Account TAS enters into a repurchase agreement (a
purchase of securities whereby the seller agrees to repurchase the securities at
a mutually agreed upon date and price), the repurchase price of the securities
will generally equal the amount paid by Account TAS plus a negotiated interest
amount. The seller under the repurchase agreement will be required to provide to
Account TAS securities (collateral) whose market value, including accrued
interest, will be at least equal to 102% of the repurchase price. Account TAS
monitors the value of collateral on a daily basis. Repurchase agreements will be
limited to transactions with national banks and reporting broker dealers
believed to present minimal credit risks. Account TAS's custodian will take
actual or constructive receipt of all securities underlying repurchase
agreements until such agreements expire.

FEDERAL INCOME TAXES. The operations of Account TAS form a part of the total
operations of The Travelers and are not taxed separately. The Travelers is taxed
as a life insurance company under the Internal Revenue Code of 1986, as amended
(the "Code"). Under existing federal income tax law, no taxes are payable on the
investment income and capital gains of Account TAS. Account TAS is not taxed as
a "regulated investment company" under Subchapter M of the Code.

2. INVESTMENTS

The aggregate costs of purchases and proceeds from sales of investments (other
than short-term securities), were $58,263,058 and $67,121,669, respectively; the
costs of purchases and proceeds from sales of direct and indirect U.S.
government securities were $85,657 and $346,597, respectively, for the year
ended December 31, 1997. Realized gains and losses from investment security
transactions are reported on an identified cost basis.

Account TAS placed a portion of its security transactions with brokerage firms
which are affiliates of The Travelers. The commissions paid to these affiliated
firms were $7,564 and $20,390 for the years ended December 31, 1997 and 1996,
respectively.

At December 31, 1997, Account TAS held 107 open S&P 400 MidCap Index futures
contracts expiring in March, 1998. The underlying face value, or notional value,
of these contracts at December 31, 1997, amounted to $17,930,525. In connection
with these contracts, short-term investments with a par value of $685,000 had
been pledged as margin deposits.

Net realized gains resulting from futures contracts were $3,766,611 and
$1,080,235 for the years ended December 31, 1997 and 1996, respectively. These
gains are included in the net realized gain from investment security
transactions on both the Statement of Operations and the Statement of Changes in
Net Assets. The cash settlement for December 31, 1997, is shown on the Statement
of Assets and Liabilities as a receivable for variation on futures margin.

-32-
<PAGE> 35
NOTES TO FINANCIAL STATEMENTS - CONTINUED

3. CONTRACT CHARGES

Investment management and advisory fees are calculated daily at an annual rate
of 0.35% of Account TAS's average net assets. These fees are paid to The
Travelers Investment Management Company, an indirect wholly owned subsidiary of
Travelers Group Inc.

A market timing fee equivalent on an annual basis to 1.25% of the average net
assets of Account TAS is deducted for market timing services. The Travelers
deducts the fee daily and, in turn, pays the fee to Copeland Financial Services,
Inc., a registered investment adviser and an affiliate of The Travelers which
provides market timing services to subscribing participants in Account TAS.

Insurance charges are paid for the mortality and expense risks assumed by The
Travelers. These charges are equivalent to 1.25% of the average net assets of
Account TAS on an annual basis. Additionally, for contracts in the accumulation
phase, a semi-annual charge of $15 (prorated for partial periods) is deducted
from participant account balances and paid to The Travelers to cover
administrative charges.

No sales charge is deducted from participant purchase payments when they are
received. However, The Travelers generally assesses a 5% contingent deferred
sales charge if a participant's purchase payment is surrendered within five
years of its payment date. Contract surrender payments include $69,828 and
$77,439 of contingent deferred sales charges for the years ended December 31,
1997 and 1996, respectively.

4. SUPPLEMENTARY INFORMATION
(Selected data for a unit outstanding throughout each year.)

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-----------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income............................... $ .063 $ .041 $ .042 $ .036 $ .037
Operating expenses.................................... .085 .069 .057 .049 .048
---------- --------- ---------- ---------- ----------

Net investment loss................................... (.022) (.028) (.015) (.013) (.011)

Unit value at beginning of year....................... 2.623 2.253 1.706 1.838 1.624
Net realized and change in unrealized gains (losses).. .788 .398 .562 (.119) .225
---------- --------- ---------- ---------- ----------

Unit value at end of year............................. $ 3.389 $ 2.623 $ 2.253 $ 1.706 $ 1.838
========== ========= ========== ========== ==========

SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase (decrease) in unit value................. $ .77 $ .37 $ .55 $ (.13) $ .21
Ratio of operating expenses to average net assets*.... 2.85 % 2.84 % 2.83 % 2.80 % 2.82 %
Ratio of net investment loss to average net assets*... (.76)% (1.13) % (.74) % (.72)% (.80)%
Number of units outstanding at end of year (thousands) 25,865 30,167 45,575 25,109 43,059
Portfolio turnover rate............................... 92 % 98 % 113 % 142 % 71 %
Average commission rate paid+......................... $ .052 $ .047 - - -
</TABLE>

* Annualized.

-33-
<PAGE> 36
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF INVESTMENTS
DECEMBER 31, 1997

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
-------- ----------
<S> <C> <C>
COMMON STOCKS (79.8%)

AEROSPACE (0.7%)
GenCorp 8,100 $ 202,500
Precision Castparts Corp. 3,800 229,187
Sundstrand Corp. 4,600 231,725
----------
663,412
----------
AIRLINES (0.1%)
Continental Airlines, Inc. (A) 2,900 139,562
----------

AUTOMOTIVE (1.2%)
Eaton Corp. 1,800 160,650
Harley-Davidson, Inc. 12,000 328,500
Lear Corp. (A) 4,500 213,750
Superior Industry 9,900 265,444
International, Inc.
Timken Co. 3,400 116,875
----------
1,085,219
----------
BANKING (8.3%)
AmSouth Bancorp 2,850 154,791
Capital One Financial Corp. 2,200 119,212
City National Corp. 7,800 288,113
Crestar Financial Corp. 4,800 273,600
Dime Savings Bank 9,400 284,350
First of America Bank Corp. 10,450 805,956
First Empire State Corp. 333 154,845
First Security Corp. 3,900 163,556
First Tennesse National Corp. 4,800 320,700
First Virginia Banks, Inc. 4,050 209,334
Firstar Corp. 11,100 471,056
Hibernia Corp. Class A 10,500 197,531
Marshall & Ilsley Corp. 7,800 484,818
Mercantile Bancorp, Inc. 7,100 436,650
Mercantile Bankshares Corp. 9,650 373,938
Northern Trust Corp. 10,900 762,319
Regions Financial Corp. 10,000 422,187
SouthTrust Corp. 7,500 475,313
Summit Bancorp 7,650 407,363
Union Planters Corp. 5,100 346,481
UnionBanCal Corp. 1,600 170,200
----------
7,322,313
----------
BEVERAGE (1.0%)
Coca-Cola Enterprises, Inc. 25,500 906,844
----------

BROKERAGE (2.2%)
Bear Stearns Cos 5,126 243,485
Edwards A. G. Inc. 10,850 431,288
FINOVA Group, Inc. 4,200 208,687
Franklin Resources, Inc. 8,350 725,928
Paine Webber Group, Inc. 11,100 383,644
----------
1,993,032
----------
BUILDING MATERIALS (0.9%)
Vulcan Materials 4,900 500,413
Watts Industries, Inc. Class A 9,200 260,475
----------
760,888
----------
CAPITAL GOODS (1.5%)
Crane Co. 3,150 136,631
Danaher Corp. 6,700 422,938
Diebold, Inc. 5,300 268,312

<CAPTION>
NO. OF MARKET
SHARES VALUE
-------- ----------
<S> <C> <C>
CAPITAL GOODS (CONTINUED)
Leggett & Platt, Inc. 4,200 $ 175,875
Thiokol Corp. 3,860 313,625
----------
1,317,381
----------
CHEMICALS (3.3%)
BetzDearborn, Inc. 2,300 140,444
Biogen, Inc. (A) 5,800 211,338
Centocor, Inc. (A) 2,100 70,087
Crompton & Knowles Corp. 14,800 392,200
Cytec Industries, Inc. (A) 3,500 164,281
Fuller H.B. Co. 3,400 169,150
IMC Global, Inc. 7,500 245,625
International Specialty
Products, Inc. (A) 13,000 194,188
Lubrizol Corp. 2,500 92,187
Lyondell Petrochemical 11,900 315,350
Mylan Labs, Inc. 9,700 203,094
Olin Corp. 3,900 182,812
Solutia, Inc. 9,000 240,187
Witco Chemical Corp. 7,800 318,338
----------
2,939,281
----------
CONSTRUCTION MACHINERY (0.3%)
AGCO Corp. 9,900 289,575
----------

CONSUMER (0.8%)
Alberto-Culver Co. 5,100 137,700
Dial Corp. 7,400 154,012
HON Industry, Inc. 4,740 279,068
Meredith Corp. 4,100 146,319
----------
717,099
----------
ENTERTAINMENT (0.3%)
International Game Technology 3,500 88,375
U.S. Industries, Inc. 5,450 164,181
----------
252,556
----------
ENVIROMENTAL (0.9%)
USA Waste Services, Inc. (A) 15,565 610,926
U.S. Filter Corp. (A) 6,100 182,619
----------
793,545
----------
FINANCE (1.4%)
ContiFinancial Corp. (A) 9,600 241,800
Enhance Financial Services
Group, Inc. 2,400 142,800
Price (T. Rowe) Assoc 6,600 415,800
Provident Life & Accident
Insurance Co. 4,800 185,400
Torchmark Corp. 5,100 214,519
----------
1,200,319
----------
FOOD (2.4%)
Dean Foods 6,690 398,055
Dole Food Co. 4,600 210,450
International Multifoods Corp. 6,500 184,031
Interstate Bakeries Corp. 7,600 284,050
Lance, Inc. 8,500 225,250
Planet Hollywood
International, Inc. (A) 13,600 180,200
Smucker J.M. Co. 7,300 172,462
Starbucks Corp. (A) 3,000 115,219
Tyson Foods, Inc. 16,500 338,250
----------
2,107,967
----------
</TABLE>

-34-
<PAGE> 37
STATEMENT OF INVESTMENTS - CONTINUED

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
-------- ----------
<S> <C> <C>
HEALTHCARE (2.3%)
Beverly Enterprises, Inc. (A) 8,500 $ 110,500
Covance Inc. (A) 11,600 230,550
DePuy Inc. 7,800 224,250
Diagnostic Products Corp. 7,200 199,800
Foundation Health Systems (A) 5,760 128,880
HEATHSOUTH Rehabilitation (A) 6,700 185,925
Health Management
Assoc., Inc. (A) 21,450 541,612
Health & Retirement
Properties Trust 12,200 244,000
Vencor Inc. (A) 5,300 129,519
Wellpoint Health Networks (A) 1,520 64,220
----------
2,059,256
----------
HOME CONSTRUCTION (0.2%)
Clayton Homes, Inc. 9,150 164,700
----------

INDEPENDENT ENERGY (1.2%)
AES Corp. (A) 13,500 629,438
Noble Affiliates, Inc. 7,300 257,325
Sun Co. 3,300 138,806
----------
1,025,569
----------
INDUSTRIAL (4.1%)
AccuStaff Inc. (A) 7,900 181,700
Allegiance Corp. 4,700 166,556
Associated Banc-Corp 3,900 215,231
Cintas Corp. 7,400 289,063
Corrections Corp. America (A) 3,100 114,894
Ferro Corp. 3,000 72,937
Hillenbrand Industries 5,200 266,175
Jacobs Engineering Group, Inc. (A) 8,000 203,000
MGM Grand, Inc. (A) 3,300 119,006
Mercury General Corp. 4,300 237,575
Miller (Herman), Inc. 6,100 332,069
National Service Industry, Inc. 3,000 148,688
Noble Drilling Corp. (A) 5,000 153,125
Premark International, Inc. 4,900 142,100
Sealed Air Corp. (A) 5,900 364,325
Unisource Worldwide, Inc. 18,700 266,475
Wilmington Trust Corp. 5,100 316,519
----------
3,589,438
----------
INSURANCE (3.0%)
AFLAC, Inc. 7,950 406,444
AMBAC, Inc. 7,100 326,600
American Bankers Insurance
Group, Inc. 3,300 151,594
Conseco, Inc. 2,900 131,769
Everest Reinsurance Holdings 3,500 144,375
Hartford Financial Services Group 3,600 163,125
Health Care & Retirement Corp. (A) 6,800 273,700
Old Republic Intl. Corp. 6,200 230,562
Oxford Health Plans (A) 6,100 94,740
PMI Group, Inc. 4,700 339,869
Transatlantic Holdings, Inc. 2,690 192,335
20th Century Industries 8,100 210,600
----------
2,665,713
----------

<CAPTION>
NO. OF MARKET
SHARES VALUE
--------- ----------
<S> <C> <C>
LODGING (0.4%)
Circus Circus Enterprises, Inc. (A) 3,200 $ 65,600
Promus Hotel Corp. (A) 7,030 295,260
----------
360,860
----------
MEDIA (1.5%)
Belo (A.H.) Corp. 4,700 263,787
Chancellor Media Corp. (A) 1,900 141,847
Chris-Craft Industry, Inc. 2,400 125,550
McGraw Hill, Inc. 2,010 148,740
New York Times Co. 4,000 264,500
Washington Post Co. 800 389,200
----------
1,333,624
----------
METALS (1.2%)
AK Steel Holding Co. 10,800 191,025
Aeroquip-Vickers, Inc. 2,686 131,782
Alumax, Inc. (A) 4,400 149,600
Kennametal, Inc. 2,000 103,625
LTV Corp. 18,500 180,375
Martin Marietta Materials, Inc. 3,700 135,281
USX-U.S. Steel Group 5,200 162,500
----------
1,054,188
----------
NATURAL GAS DISTRIBUTORS (1.7%)
Consolidated Natural Gas Co. 4,600 278,300
El Paso Natural Gas Co. 2,200 146,300
Keyspan Energy Corp. 9,600 353,400
MCN Energy Group, Inc. 5,100 205,913
National Fuel Gas Co. 6,000 292,125
Seagull Energy Corp. (A) 9,900 204,187
----------
1,480,225
----------
NATURAL GAS PIPELINE (0.5%)
Columbia Gas Systems, Inc. 3,400 267,113
MAPCO, Inc. 4,400 203,500
----------
470,613
----------
OIL FIELD (2.6%)
BJ Services Co. (A) 4,670 335,948
ENSCO International, Inc. 14,200 475,700
Global Marine, Inc. (A) 13,100 320,950
Nabors Industries, Inc. (A) 13,300 418,119
Smith International, Inc. (A) 1,300 79,787
Tidewater, Inc. 4,600 253,575
Transocean Offshore, Inc. 5,000 240,938
Weatherford Enterra, Inc. (A) 4,200 183,750
----------
2,308,767
----------
PAPER (0.9%)
Boise Cascade Corp. 4,700 142,175
Bowater, Inc. 5,700 253,294
Mead Corp. 5,800 162,400
Rayonier, Inc. 2,200 93,637
Reynolds & Reynolds 6,100 112,469
----------
763,975
----------
</TABLE>

-35-
<PAGE> 38
STATEMENT OF INVESTMENTS - CONTINUED

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
------- ----------
<S> <C> <C>
PHARMACEUTICALS (2.2%)
Bergen Brunswig Corp. 3,875 $ 163,234
Chiron Corp. (A) 5,068 86,314
CVS Corp. 3,074 196,928
Dura Pharmaceuticals (A) 3,300 152,212
Genzyme Corp. (A) 5,800 160,588
Genzyme Corp.-Tissue Repair (A) 174 1,185
McKesson Corp. 5,800 627,488
Omnicare, Inc. 6,100 189,100
Pharmerica, Inc. (A) 0 4
Watson Pharmaceuticals, Inc. (A) 11,360 368,490
----------
1,945,543
----------
RAILROADS (0.4%)
Illinois Central Corp. 4,900 166,906
Kansas City Southern
Industries, Inc. 6,500 206,375
----------
373,281
----------
REAL ESTATE (0.1%)
CarrAmerica Realty Corp. 4,000 126,750
----------

REFINING (1.1%)
Murphy Oil Corp. 3,600 195,075
Tosco Corp. 10,600 400,812
Valero Energy Corp. 10,900 342,669
----------
938,556
----------
RETAILERS (5.7%)
Barnes & Noble, Inc. (A) 5,400 180,225
Bed Bath & Beyond, Inc. (A) 5,200 199,875
Borders Group, Inc. (A) 7,500 234,844
CompUSA, Inc. (A) 11,000 341,000
Consolidated Stores Corp. (A) 3,700 162,569
Costco Companies, Inc. (A) 5,300 236,347
Dollar General Corp. 9,187 333,029
Family Dollar Stores 14,450 423,566
Fred Meyer, Inc. (A) 4,400 160,050
General Nutrition Cos. (A) 10,400 352,950
Kohl's Corp. (A) 5,900 401,937
Liz Claiborne, Inc. 2,700 112,894
Office Depot, Inc. (A) 13,000 311,187
OfficeMax, Inc. (A) 9,580 136,515
Payless ShoeSource, Inc. (A) 3,900 261,787
Ross Stores, Inc. 4,000 145,750
Staples, Inc. (A) 12,645 351,689
TJX Companies, Inc. 7,200 247,500
Tiffany & Co. 2,600 93,762
U.S. Office Products Co. (A) 18,200 354,900
----------
5,042,376
----------
SERVICES (4.4%)
AVX Corp. 4,400 81,125
Cadence Design System, Inc. (A) 20,850 510,825
Cendant Corp. (A) 4,590 157,778
Ecolab, Inc. 4,100 227,294
HealthCare COMPARE Corp. (A) 2,500 128,437
HBO & Co. 3,300 158,297
Kelly Services, Inc. 7,700 231,481
Lincare Holdings, Inc. (A) 2,700 154,575
Manpower, Inc. 4,000 141,000

<CAPTION>
NO. OF MARKET
SHARES VALUE
-------- ----------
<S> <C> <C>
SERVICES (CONTINUED)
Ogden Corp. 9,100 $ 256,506
Omnicom Group 6,500 275,438
Paychex, Inc. 4,875 247,711
Robert Half International, Inc. (A) 6,900 276,000
Stewart Enterprises, Inc. 7,200 336,150
Stryker Corp. 3,100 115,475
SunGard Data Systems, Inc. (A) 14,100 437,100
Xilinx, Inc. (A) 5,200 182,000
----------
3,917,192
----------
TECHNOLOGY (9.3%)
Altera Corp. (A) 7,000 232,093
America Online, Inc. (A) 7,570 675,149
American Power Conversion (A) 7,600 180,025
Analog Devices, Inc. (A) 12,200 337,787
Arrow Electronics (A) 6,300 204,356
Atmel Corp. (A) 4,200 78,094
BMC Software, Inc. (A) 10,600 694,963
Comdisco, Inc. 5,700 190,594
Compuware Corporation (A) 17,500 560,546
Hubbell, Inc. 5,180 255,439
Keane, Inc. (A) 4,400 178,750
Lexmark International
Group, Inc. Class A (A) 2,800 106,400
Linear Technology Corp. 7,700 443,231
Mark IV Industries, Inc. 10,300 225,312
Maxim Integrated Products (A) 13,200 456,225
Molex, Inc. 11,687 374,714
NCR Corporation (A) 4,300 119,594
Networks Associates, Inc. (A) 2,500 131,953
Policy Management Systems (A) 4,700 326,944
Quantum Corp. (A) 14,900 299,396
SCI Systems (A) 7,700 335,431
Solectron Corp. (A) 7,800 324,188
Sterling Commerce, Inc. (A) 4,100 157,594
Storage Technology Corp. (A) 7,300 452,144
Symantec Corp. (A) 10,800 238,612
Tech Data Corp. (A) 3,800 148,200
Tektronix, Inc. 1,800 71,437
Teradyne, Inc. (A) 6,400 204,800
VLSI Technology, Inc. (A) 10,300 243,338
----------
8,247,309
----------
TELECOMMUNICATIONS (2.5%)
360 Communications Company (A) 9,500 191,781
ADC Telecommunications, Inc.(A) 9,600 401,400
Century Telephone Enterprises 4,900 244,081
LCI International, Inc. (A) 11,500 353,625
NEXTEL Communications, Inc.(A) 19,900 514,913
Southern New England Telephone 5,200 261,625
Telephone & Data Systems, Inc. 4,900 228,156
----------
2,195,581
----------
</TABLE>

-36-
<PAGE> 39
STATEMENT OF INVESTMENTS - CONTINUED

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
----------- -------------
<S> <C> <C>
TEXTILE (0.9%)
Jones Apparel Group, Inc.(A) 7,700 $ 331,100
Unifi, Inc. 10,700 435,356
--------------
766,456
--------------
TOBACCO (0.3%)
Universal Corp. 6,100 250,863
--------------

TRANSPORTATION (1.2%)
Airborne Freight Corp. 4,000 248,500
CNF Transportation 8,900 341,538
Gatx Corp. 3,200 232,200
Overseas Shipholding 11,200 244,300
--------------
1,066,538
--------------
UTILITIES (6.8%)
Allegheny Power Systems, Inc. 15,200 494,000
Baltimore Gas & Electric Co. 5,500 187,344
Black Hills Corp. 5,100 179,775
Boston Edison Co. 6,500 246,187
CalEnergy Co. (A) 10,000 287,500
CMS Energy Corp. 14,000 616,875
Florida Progress Corp. 4,500 176,625
Illinova Corp. 11,900 320,556
IPALCO Enterprises, Inc. 4,500 188,719
KU Energy Corp. 3,900 153,075
Louisville Gas & Electric Co. 5,240 129,690
Minnesota Power & Light Co. 2,900 126,331
NIPSCO Industries, Inc. 9,000 444,938
New Century Energies, Inc. 10,800 517,725
Northeast Utilities 10,100 119,306
Pinnacle West Capital 12,200 516,975
Pioneer Natural Resources 5,600 162,050
SCANA Corp. 14,800 443,075
TECO Energy, Inc. 16,300 458,438
Wisconsin Energy, Corp. 9,000 258,750
--------------
6,027,934
--------------
TOTAL COMMON STOCKS
(COST $55,586,992) 70,664,300
--------------
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
SHORT-TERM INVESTMENTS (20.2%)

COMMERCIAL PAPER (19.5%)
Asset Securitization Corp.,
6.05% due January 21, 1998 $1,785,000 1,779,297
Assoc. Corp. of North America,
5.83% due January 16, 1998 1,000,000 997,566
BHP Finance (USA), Inc.,
5.83% due January 27, 1998 1,100,000 1,095,482
BHP Finance (USA), Inc.,
5.83% due January 28, 1998 800,000 796,593
Corporate Receivables Corp.,
5.85% due January 8, 1998 1,000,000 998,737
Dillard Investment Co., Inc.,
5.84% due January 21, 1998 1,741,000 1,735,438
General Electric Capital Corp.,
5.89% due February 26, 1998 1,608,000 1,594,059

<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -----------
<S> <C> <C>
COMMERCIAL PAPER (CONTINUED)
Goldman Sachs Group LP,
5.71% due February 24, 1998 $1,500,000 $1,487,451
Progress Capital Holdings, Inc.,
5.99% due January 14, 1998 2,100,000 2,095,504
Prudential Funding Corp.,
6.16% due January 6, 1998 1,500,000 1,498,564
Seagram Joseph E & Sons, Inc.,
5.93% due February 2, 1998 1,800,000 1,790,964
UBS Finance (Delaware), Inc.,
6.85% due January 2, 1998 1,392,000 1,391,546
-------------
17,261,201
-------------
U.S. TREASURY (0.7%)
United States of America Treasury,
5.61% due July 23, 1998 (B) 685,000 664,936
-------------

TOTAL SHORT-TERM
INVESTMENTS (COST $17,925,018) 17,926,137
-------------
<CAPTION>
NOTIONAL
VALUE
-----------
<S> <C> <C>
FUTURES CONTRACTS (0.0%)

S&P 400 MidCap Index,
Exp. March, 1998 (C) $ 17,930,525 -
-------------

TOTAL INVESTMENTS (100%)
(COST $73,512,010) (D) $ 88,590,437
==============
</TABLE>

NOTES

(A) Non-income Producing Security.

(B) Par value of $685,000 pledged to cover margin deposits on futures contracts.

(C) As more fully discussed in Note 1 to the financial statements, it is
Account TAS's practice to hold cash and cash equivalents (including
short-term investments) at least equal to the underlying face value, or
notional value, of outstanding purchased futures contracts, less the
initial margin. Account TAS uses futures contracts as a substitute for
holding individual securities.

(D) At December 31, 1997, net unrealized appreciation for all securities was
$15,078,427. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over cost of
$16,724,719 and aggregate gross unrealized depreciation for all securities
in which there was an excess of cost over market value of $1,646,292.

See Notes to Financial Statements

-37-
<PAGE> 40
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Managers and Owners of Variable Annuity Contracts of The
Travelers Timed Aggressive Stock Account for Variable Annuities:

We have audited the accompanying statement of assets and liabilities of The
Travelers Timed Aggressive Stock Account for Variable Annuities, including the
statement of investments, as of December 31, 1997, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the selected per unit data
and ratios for each of the five years in the period then ended. These financial
statements, per unit data and ratios are the responsibility of management. Our
responsibility is to express an opinion on these financial statements, per unit
data and ratios based on our audits.

In our opinion, the financial statements, per unit data and ratios referred to
above present fairly, in all material respects, the financial position of The
Travelers Timed Aggressive Stock Account for Variable Annuities as of December
31, 1997, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the per
unit data and ratios for each of the five years in the period then ended, in
conformity with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Hartford, Connecticut
February 19, 1998

-38-
<PAGE> 41
THE TRAVELERS TIMED BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1997

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest................................................................ $ 133,794

EXPENSES:
Market timing fees...................................................... $ 25,230
Investment management and advisory fees................................. 10,088
Insurance charges....................................................... 25,230
----------------
Total expenses...................................................... 60,548
----------------

Net investment income............................................ 73,246
----------------

REALIZED GAIN ON
INVESTMENT SECURITIES:
Realized gain from investment security transactions:
Proceeds from investment securities sold............................ 8,213,692
Cost of investment securities sold.................................. 8,059,778
----------------

Net realized gain................................................ 153,914
----------------

Net increase in net assets resulting from operations................ $ 227,160
================
</TABLE>

See Notes to Financial Statements

-39-
<PAGE> 42
THE TRAVELERS TIMED BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1997 AND 1996

<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income ............................................. $ 73,246 $ 189,762
Net realized gain (loss) from investment security transactions .... 153,914 (1,050,523)
Net change in unrealized gain on investment securities ............ -- (698,966)
----------- ------------

Net increase (decrease) in net assets resulting from operations 227,160 (1,559,727)
----------- ------------

UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 71,480 and 243,706 units, respectively) ........ 89,455 324,504
Participant transfers from other Travelers accounts
(applicable to 4,094 and 13,851 units, respectively) .......... 5,130 19,555
Market timing transfers from other Travelers timed accounts
(applicable to 5,774,393 and 18,855,866 units, respectively) .. 7,114,294 24,121,224
Administrative charges
(applicable to 4,881 and 72 units, respectively) .............. (6,000) (94)
Contract surrenders
(applicable to 192,583 and 318,514 units, respectively) ....... (240,631) (428,452)
Participant transfers to other Travelers accounts
(applicable to 5,652,503 and 992,326 units, respectively) ..... (7,189,408) (1,324,406)
Market timing transfers to other Travelers timed accounts
(applicable to 29,259,875 units) .............................. -- (37,004,878)
Other payments to participants
(applicable to 8,942 units) ................................... -- (11,312)
----------- ------------

Net decrease in net assets resulting from unit transactions ... (227,160) (14,303,859)
----------- ------------

Net decrease in net assets ................................. -- (15,863,586)

NET ASSETS:
Beginning of year ................................................. -- 15,863,586
----------- ------------

End of year ....................................................... $ -- $ --
=========== ============
</TABLE>

See Notes to Financial Statements

-40-
<PAGE> 43
NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The Travelers Timed Bond Account for Variable Annuities ("Account TB") is a
separate account of The Travelers Insurance Company ("The Travelers"), an
indirect wholly owned subsidiary of Travelers Group Inc., and is available for
funding certain variable annuity contracts issued by The Travelers. Account TB
is registered under the Investment Company Act of 1940, as amended, as a
diversified, open-end management investment company. Participants in Account TB
have entered into market timing service agreements with an affiliate of The
Travelers, which provide for the transfer of participants' funds to certain
other timed accounts of The Travelers, at the discretion of the market timer.

The following is a summary of significant accounting policies consistently
followed by Account TB in the preparation of its financial statements.

FUTURES CONTRACTS. Account TB may use interest rate futures contracts as a
substitute for the purchase or sale of individual securities. When Account TB
enters into a futures contract, it agrees to buy or sell specified debt
securities, at a future time for a fixed price, unless the contract is closed
prior to expiration. Account TB is obligated to deposit with a broker an
"initial margin" equivalent to a percentage of the face, or notional value of
the contract.

It is Account TB's practice to hold cash and cash equivalents in an amount at
least equal to the notional value of outstanding purchased futures contracts,
less the initial margin. Cash and cash equivalents include cash on hand,
securities segregated under federal and brokerage regulations, and short-term
highly liquid investments with maturities generally three months or less when
purchased. Generally, futures contracts are closed prior to expiration.

Futures contracts purchased by Account TB are priced and settled daily;
accordingly, changes in daily prices are recorded as realized gains or losses
and no asset is recorded in the Statement of Investments. However, when Account
TB holds open futures contracts, it assumes a market risk generally equivalent
to the underlying market risk of change in the value of the specified debt
securities associated with the futures contract.

-41-
<PAGE> 44
NOTES TO FINANCIAL STATEMENTS - CONTINUED

REPURCHASE AGREEMENTS. When Account TB enters into a repurchase agreement (a
purchase of securities whereby the seller agrees to repurchase the securities at
a mutually agreed upon date and price), the repurchase price of the securities
will generally equal the amount paid by Account TB plus a negotiated interest
amount. The seller under the repurchase agreement will be required to provide to
Account TB securities (collateral) whose market value, including accrued
interest, will be at least equal to 102% of the repurchase price. Account TB
monitors the value of collateral on a daily basis. Repurchase agreements will be
limited to transactions with national banks and reporting broker dealers
believed to present minimal credit risks. Account TB's custodian will take
actual or constructive receipt of all securities underlying repurchase
agreements until such agreements expire.

FEDERAL INCOME TAXES. The operations of Account TB form a part of the total
operations of The Travelers and are not taxed separately. The Travelers is taxed
as a life insurance company under the Internal Revenue Code of 1986, as amended
(the "Code"). Under existing federal income tax law, no taxes are payable on the
investment income and capital gains of Account TB. Account TB is not taxed as a
"regulated investment company" under Subchapter M of the Code.

2. INVESTMENTS

The aggregate costs of purchases and proceeds from sales of direct and indirect
U.S. government obligations were $7,999,645 and $8,156,124, respectively, for
the year ended December 31, 1997. Realized gains and losses from investment
security transactions are reported on an identified cost basis.

3. CONTRACT CHARGES

Investment management and advisory fees are calculated daily at annual rates
which start at 0.50% and decrease, as net assets increase, to 0.25% of Account
TB's average net assets. These fees are paid to Travelers Asset Management
International Corporation, an indirect wholly owned subsidiary of Travelers
Group Inc.

A market timing fee equivalent on an annual basis to 1.25% of the average net
assets of Account TB is deducted for market timing services. The Travelers
deducts the fee daily and, in turn, pays the fee to Copeland Financial Services,
Inc., a registered investment adviser and an affiliate of The Travelers which
provides market timing services to subscribing participants in Account TB.

Insurance charges are paid for the mortality and expense risks assumed by The
Travelers. These charges are equivalent to 1.25% of the average net assets of
Account TB on an annual basis. Additionally, for contracts in the accumulation
phase, a semi-annual charge of $15 (prorated for partial periods) is deducted
from participant account balances and paid to The Travelers to cover
administrative charges.

No sales charge is deducted from participant purchase payments when they are
received. However, The Travelers generally assesses a 5% contingent deferred
sales charge if a participant's purchase payment is surrendered within five
years of its payment date. Contract surrender payments include $1,559 and $9,844
of contingent deferred sales charges for the year ended December 31, 1997 and
1996, respectively.

-42-
<PAGE> 45
NOTES TO FINANCIAL STATEMENTS - CONTINUED

4. SUPPLEMENTARY INFORMATION
(Selected data for a unit outstanding throughout each year.)

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
------------------------------------------------------------------------
1997 1996 1995 1994 1993
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income................................. $ .025 $ .033 $ .071 $ .007 $ .054
Operating expenses...................................... .011 .015 .031 .006 .036
---------- --------- --------- ---------- ----------

Net investment income................................... .014 .018 .040 .001 .018

Unit value at beginning of year......................... 1.232 1.383 1.215 1.234 1.132
Net realized and change in unrealized gains (losses).... .027 (.169) .128 (.020) .084
---------- --------- --------- ---------- ----------

Unit value at end of year............................... $ 1.273 $ 1.232 $ 1.383 $ 1.215 $ 1.234
========== ========= ========= ========== ==========

SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase (decrease) in unit value................... $ .04 $ (.15) $ .17 $ (.02) $ .10
Ratio of operating expenses to average net assets*...... 3.00% 3.00 % 3.00 % 3.00 % 3.00 %
Ratio of net investment income to average net assets*... 3.64% 3.48 % 3.98 % 1.02 % 1.48 %
Number of units outstanding at end of year (thousands).. - - 11,466 - 20,207
Portfolio turnover rate................................. 129% 153 % 117 % - 190 %
</TABLE>

* Annualized.

5. ELIMINATION OF TIMING STRATEGY

On October 1, 1997, The Travelers eliminated the U.S. Government Securities
Market Timing Strategy. As a result, Account TB had no further activity through
December 31, 1997.

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<PAGE> 46
REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Managers and Owners of Variable Annuity Contracts of The
Travelers Timed Bond Account for Variable Annuities:

We have audited the accompanying statement of operations of The Travelers Timed
Bond Account for Variable Annuities for the year ended December 31, 1997, and
the related statement of changes in net assets for each of the two years in the
period then ended, and the selected per unit data and ratios for each of the
five years in the period then ended. These financial statements, per unit data
and ratios are the responsibility of management. Our responsibility is to
express an opinion on these financial statements, per unit data and ratios based
on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits to obtain
reasonable assurance about whether the financial statements, per unit data and
ratios are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the financial statements, per unit data and ratios referred to
above present fairly, in all material respects, the results of operations of The
Travelers Timed Bond Account for Variable Annuities for the year ended December
31, 1997, the changes in its net assets for each of the two years in the period
then ended, and the per unit data and ratios for each of the five years in the
period then ended, in conformity with generally accepted accounting principles.

As explained in Note 5, on October 1, 1997, the U.S. Government Securities
Market Timing Strategy was eliminated. Money invested in Timed Bond was
transferred into other investment options.

COOPERS & LYBRAND L.L.P.

Hartford, Connecticut
February 19, 1998

-44-
<PAGE> 47
Investment Advisers
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS INVESTMENT MANAGEMENT COMPANY
Hartford, Connecticut

THE TRAVELERS TIMED BOND ACCOUNT FOR VARIABLE ANNUITIES
TRAVELERS ASSET MANAGEMENT INTERNATIONAL CORPORATION
Hartford, Connecticut

Independent Accountants
COOPERS & LYBRAND L.L.P.
Hartford, Connecticut

Custodian
THE CHASE MANHATTAN BANK, N.A.
New York, New York

This report is prepared for the general information of contract owners and is
not an offer of shares of The Travelers Timed Growth and Income Stock Account
for Variable Annuities, The Travelers Timed Short-Term Bond Account for Variable
Annuities, The Travelers Timed Aggressive Stock Account for Variable Annuities
and The Travelers Timed Bond Account for Variable Annuities. It should not be
used in connection with any offer except in conjunction with the Universal
Annuity Prospectus which contains all pertinent information, including the
applicable sales commissions.

VG-182 (Annual) (12-97) Printed in U.S.A.