TRAVELERS TIMED BOND ACCOUNT FOR VARIABLE ANNUITIES, N-30D, 1997-08-27

TRAVELERS TIMED BOND ACCOUNT FOR VARIABLE ANNUITIES
N-30D, 1997-08-27

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<PAGE> 1

UNIVERSAL ANNUITY

SEMI-ANNUAL REPORTS
JUNE 30, 1997

[PHOTO]

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 LOGO]

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 JUNE 30, 1997

ECONOMIC REVIEW AND OUTLOOK

Economic activity in the first quarter of 1997 showed surprising strength as
real Gross Domestic Product growth rose by 4.9%. Despite the unexpected
strength in the economy and a decline in unemployment to about 5%, reported
inflation remained low. However, the tenor of a stronger economy, reflected in
both a tight labor market and a high capacity utilization rate, sparked
concerns about future inflation and prompted an increasingly vigilant Federal
Reserve Board ("Fed") to raise short-term rates by 0.25% in March. Concerns of
higher interest rates triggered a correction in both the stock and bond markets
at the end of the first quarter.

The key economic news in the second quarter was a distinct slowdown in economic
growth and surprisingly low inflation. Both the stock and bond markets drew
relief from these developments as the prospects of further Fed tightening
receded. Interest rates fell from above 7% to 6.8% by the end of the second
quarter and the stock market embarked on a furious rally that saw prices rise
by almost 20%.

The second quarter of 1997 began with a singular focus on the future direction
of Fed action. After the increase in the federal funds rate in late March, it
was considered quite likely that rates would rise during the second quarter.
The prospects of higher rates created turmoil within the U.S. capital markets
and stocks, in particular, were hit hard in early April.

Economic data released in early May provided mounting evidence of a slower
economy and low inflation. Retail sales for April were soft and producer prices
showed a dramatic decline of 0.4%.

The inflation trend in recent months has been nothing short of remarkable,
especially in light of the low unemployment rate and high capacity utilization
rates prevalent in the U.S. economy. The Consumer Price Deflator, which is
considered to be a better inflation measure than the Consumer Price Index
("CPI"), fell to a 30-year low in May at an annual rate of 1.6%. Gains in
average hourly wages, a closely monitored signal for wage inflation, have
slowed from 4.1% to 3.5%. Commodity price indexes are declining, oil prices are
falling and the price of gold is now below $320, its lowest level in 5 years.
Most indicators suggest that inflation does not appear to be an issue at this
point.

The biggest contributing factor in the demise of inflation appears to be the
significant gains in productivity achieved over the last few years. It is
widely acknowledged that conventional measures of productivity gains are being
understated and, under that scenario, lower-than-expected inflation may be
explained by higher-than-expected productivity gains. Several other factors
also suggest that the current disinflationary trend is likely to be both longer
lasting and global in nature. These include a high level of disinflation in the
growing technology sector, significant government downsizing and severe global
competition.

The second quarter rally in the stock and bond markets suggests that investors
have reduced their inflation expectations and, consequently, the likelihood of
further Fed tightening.

-1-
<PAGE> 4

The biggest risk to the presently benign investment climate looms on the
economic landscape. A resurgence of economic growth in the second half of the
year may prompt the Fed to act yet again on a preemptive basis to choke off
inflationary pressures. Stronger retail sales may well hold the key to a
reacceleration in third quarter economic growth. The boost in consumer spending
could come from any one of several sources: increased refinancing activity, the
wealth effect of a stronger stock market, record levels of consumer confidence
and the recent strong growth in real disposable personal income.

While the relatively high real yield levels in the bond market suggest that
bond investors still remain wary of an inflation and interest rate increase,
the stock market will clearly be vulnerable to such a development.

FIXED INCOME COMMENTARY

Bond prices also rose higher in the second quarter. The Lehman Long
Government/Corporate Index performed the best with a gain of 5.5% as interest
rates fell below 7%. The yield curve became flatter as the spread between long-
and short-term bonds narrowed by 0.20% in the quarter.

Stronger growth with low inflation has been good for bonds as it has reduced
government financing needs. The low inflation environment coupled with a
declining budget deficit provides positive support for the bond market. Going
forward, the bullish case for bonds can be attributed to a reduced budget
deficit and absence of inflation in final goods pricing. While wages may be
drifting higher, so are productivity gains due to technological improvements.
At the same time, global competition and an 8.5% year-to-date increase in the
trade weighted dollar should prevent higher product inflation. Year-over-year
Producer Price Index ("PPI") statistics show no signs of price pressures, and
CPI has been at a 2.0%-2.5% rate for the past few years. Additionally, the CPI
is generally agreed to be overstated and the government may be in the process
of gradually reducing this upward bias.

The key question for the markets will be the pace of growth in the second half
of the year and how the bond market and Fed react to it. We do not believe that
growth necessarily leads to further inflation on the finished goods side. As
long as wage growth is offset by productivity increases, higher growth with low
unemployment does not have to lead to a rise in inflation. However there is
still much debate on what the market and the Fed think about the relationship
between economic growth and inflation. If growth is above 3%, the market may
still expect higher inflation or the Fed may raise rates on a preemptive basis.

Within the fixed income markets, spreads remain tight and there is a high level
of complacency. Within the corporate market, spreads remain compressed between
different quality levels and "riskier" borrowers have access to an abundance of
capital. This condition is unlikely to change in the near term as good economic
growth has reduced the stress on weaker credits. High issues of Collatalized
Bond Obligations ("CBO") has created a new class of buyer for lower quality
issues, one that is more concerned with default likelihood than relative
pricing. Mortgage backed spreads have tightened as market volatility has been
low and prepayments have been within their predicted range. Mortgage spreads
are unlikely to widen much as long as government agencies such as Fannie Mae
and Freddie Mac are quick to arbitrage any spread widening. Corporate spreads
are likely to take their cues from the high yield and equity markets. As long
as these remain well bid for, high quality spreads should remain firm.
Historically, October has been a month when spreads have become wider and we
would therefore, not be surprised to see some modest pressure on spreads as the
fourth quarter begins.

EQUITY COMMENTARY

The U.S. stock market remains in one of the strongest bull market runs ever.
Stock prices have now doubled over the last two and a half years and almost
tripled in the last five years in an ideal investment climate of solid economic
growth, low inflation and strong corporate profits growth.

The year 1997 began on a positive note for the stock market. Fueled by strong
fourth quarter earnings and robust money flows into mutual funds, the Standard
& Poor's 500 Stock Index ("S&P 500") gained over 7% in January and February,
and continued to move to new highs in early March. However, as evidence of
unexpectedly robust economic growth came to hand, investors became increasingly
concerned about the risk of higher inflation and interest rates. The Fed raised
short-term rates in March, and long-term Treasury bond yields moved back over
the psychologically important 7% level.

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<PAGE> 5

The upward spike in interest rates triggered a sharp sell-off in the stock
market during the last week of March, erasing most of the market's year-to-date
gains. For the entire first quarter, the S&P 500 edged out a 2.7% gain with
dividends. Small capitalization issues generally fared worse. During the first
three months of 1997, the Russell 2000 Stock Index declined 5.5% in value.

In sharp contrast, the second quarter of 1997 was the best quarter for the U.S.
stock market in over ten years. The stock market rally was broad in nature
lifting most stocks and indexes to record highs. The S&P 500 soared by 17.5% in
the second quarter, the Russell 2000 Stock Index rose 16.2% and the NASDAQ
index performed even better with a gain of 18.0%.

The stock market got off to a rocky start in April as the effects of the Fed
rate hike from late March rippled through the capital markets. The S&P 500 sold
off to a low of 733 and the Dow retreated to almost 6300 on April 14, 1997 as
investors focused on the likelihood of higher rates. The mood swing to optimism
was triggered by the release of solid first quarter earnings in April and the
market rally began in real earnest when inflation reports in early May showed a
significant decline in producer and consumer prices.

First quarter earnings were again ahead of expectations. The final tally on the
earnings scorecard showed that 54% of all companies reported earnings in excess
of expectations while 31% of companies disappointed relative to the consensus.
The preponderance of positive earnings surprises continues a trend which now
extends to 17 consecutive quarters and is unprecedented in terms of duration or
magnitude.

As a result of the positive surprises, first quarter earnings were 3% above
consensus and 14% above year-ago levels. According to I/B/E/S Inc., which
maintains institutional earnings forecasts, the consensus for top-down 1997 S&P
500 earnings growth is now 9% with steady upward revisions over the last few
months. However, a 20% increase in stock prices seems to more than adequately
reflect the 9% growth in earnings for 1997. Earnings growth is expected to slow
down in 1998 to about 6% as a result of difficult comparisons from 1997.

The agreement on a balanced budget in Washington and the prospects of a lower
capital gains tax added further fuel to the stock market rally in the middle of
the quarter. The flood of liquidity into the market continued unabated in the
second quarter and put more buying pressure on stocks.

TECHNOLOGY stocks set the pace for the market in the first half of 1997.
Semiconductor equipment, software, networking, and telecommunications equipment
stocks rose sharply on an improving outlook for sales and earnings.
Semiconductor stocks, on the other hand, have lagged due to concerns over
product transitions and declining estimates for second quarter earnings.

A strong rally in the HEALTH CARE sector was led by the Drug group, whose
overseas exposure and strong relative earnings growth proved extremely
attractive to investors seeking blue-chip growth stocks. These attributes also
helped CONSUMER STAPLES stocks in the household products, retail drug and
beverage groups.

ENERGY stocks have underperformed in the first half of 1997 as a result of the
effects of soft commodity prices and weakening relative earnings growth. The
integrated international oil, integrated domestic and exploration and
production groups all suffered from negative investor psychology and mixed
earnings prospects. In contrast, strong relative earnings gains continued to
buoy stocks in the oil services group.

INTEREST RATE SENSITIVE stocks turned in a mixed performance in the second
quarter. Money center banks underperformed due to interest rate jitters and
credit risk concerns, while security brokers moved up sharply amid a high level
of merger activity.

Valuations in the stock market continue to be stretched. The price-to-earnings
ratio of the S&P 500 on 12-month forward earnings now stands at 18.4 times
which is a record high over the last 25 years. By most valuation measures, the
market is between 10% and 15% overvalued. While it is difficult to point to one
specific event which will derail the roaring stock market engine, the high
valuation level of the market is likely to trigger a correction on even a small
negative surprise.

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<PAGE> 6

There are no indications right now to suggest that earnings are at any great
risk in the near term. The earnings pre-announcement season at the end of the
quarter, when companies typically confess to upcoming earnings shortfalls, was
uneventful and early second quarter earnings seem to be quite strong.

There are no visible signs on the horizon that inflation is likely to flare up
in the near future. The employment cost index and hourly wage gains are likely
to be the most closely monitored gauges of expected inflation. We believe the
biggest risk on the interest rate front lies in a stronger-than-expected
economy in the second half. In fact, the Fed may be inclined to respond to
strong economic data even before it begins to affect inflation measures.

We remain cautious on the U.S. stock market. With all the good news already
reflected in stock prices, the stock market has virtually no margin for error.
We suspect that any unpleasant surprise will be enough provocation to trigger a
correction. The market will focus on earnings or interest rates for any
negative developments but any wild card surprise such as an oil price shock
could mean trouble. The positive long-term trend towards low inflation and
lower interest rates should, however, contain the downside in the stock market
and limit any correction to the traditional 10% to 15% range from prior highs.

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

KENT A. KELLEY, CFA, THE TRAVELERS INVESTMENT MANAGEMENT COMPANY

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

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TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
- -------------------------------------------------------------------------------

<S> <C>
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES.................................................... 6

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

THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT FOR VARIABLE ANNUITIES....... 25

THE TRAVELERS TIMED BOND ACCOUNT FOR VARIABLE ANNUITIES................... 37
</TABLE>

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<PAGE> 8

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") 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 stocks 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.

For the six months ending June 30, 1997, Account TGIS achieved a total return
of 20.4%, before fees and expenses, in line with the S&P 500 total return of
20.5%. Net of fees and expenses, Account TGIS's total return of 18.8% for the
first half of 1997 compared favorably to the 15.3% average return for variable
annuity stock accounts in the Lipper Growth & Income Category. On a trailing
twelve month basis as of June 30, 1997, Account TGIS had a total return of
30.3%, net of fees and expenses, compared to the Lipper Growth & Income
Category average of 27.8%.

During the first half of 1997, stock selection in the health care, producer
durables and financial services sectors made the strongest positive
contribution to Account TGIS's overall relative performance. In the health care
and pharmaceutical sectors, Account TGIS benefited from positions in companies
with strong diversified sources of earnings such as Bristol-Myers Squibb,
Guidant and PhyCor. In financial services and banking, our largest relative
gain came from positions in Household International, BankAmerica Corp. and
Mellon Bank. In the capital goods sector, we were helped by overweighted
positions in Deere, Crane Company and Illinois Tool Works, all of which
performed strongly in response to upside earnings surprises. We lost ground
relative to the benchmark primarily in the technology and energy sectors. In
the technology sector, our relative performance was penalized by Account TGIS
being underweighted in a number of the better performing stocks, including
Cisco and Applied Materials. We were also hurt by an overweighted position in
Read-Rite, the leading producer of magnetic recording heads used in computer
disk drive assemblies, which traded down sharply on concerns about slowing
orders from computer manufacturers.

The effort by U.S. corporations to capture leading global market positions
through productivity-enhancing measures has been critical to the U.S. equity
market's spectacular rise, and we expect more and more U.S. firms to seek
growth through a global strategy. We believe that the current economic
expansion has further to go, that inflation will remain low and that corporate
earnings will continue to grow, although perhaps more slowly than we have seen
in the past year. Thus, the bull market should remain intact. Despite all these
positives, we expect market volatility to increase through the remainder of
this market cycle. With valuations at current levels, investors are nervous and
likely to demonstrate little tolerance for any cyclical rise in inflation and
interest rates, or even hints of bad news at the individual company level. 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.

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<PAGE> 9

In TIMCO's disciplined approach to stock selection, we emphasize stocks that
exhibit improving fundamentals (primarily gauged 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
LSI Logic, a leading designer and manufacturer of semiconductors used in
computer networking, telecommunications and emerging digital video systems. In
the health care and pharmaceutical sectors, we continue to emphasize
Bristol-Myers Squibb on the basis of its superior product positioning and
earnings momentum, and we remain overweighted in Guidant, a world leader in the
sale of pacemakers and other surgical devices used in the treatment of heart
disease. In the consumer sector, our focus is on diversified media companies
like The New York Times and Gannett, as well as retailers that demonstrate
above-average sales and earnings momentum, including Borders Group and TJX. In
banking, we are currently emphasizing Mellon Bank and Northern Trust for their
diversity of earnings and leading positions in global custody services.

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

[TIMCO LOGO]

-7-
<PAGE> 10

THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1997

<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (cost $156,752,816).................. $ 199,549,393
Receivables:
Dividends............................................................... 185,258
Investment securities sold.............................................. 3,632,845
Purchase payments and transfers from other Travelers accounts........... 19,869
Other assets................................................................ 521
-----------------

Total Assets......................................................... 203,387,886
-----------------

LIABILITIES:
Cash overdraft.............................................................. 14,213
Payables:
Investment securities purchased......................................... 4,364,255
Contract surrenders and transfers to other Travelers accounts........... 13,332
Investment management and advisory fees................................. 17,804
Market timing fees...................................................... 27,282
Variation on futures margin............................................. 345,800
Accrued liabilities......................................................... 68,517
-----------------

Total Liabilities.................................................... 4,851,203
-----------------

NET ASSETS:
(Applicable to 61,529,915 units outstanding at $3.227 per unit)............. $ 198,536,683
=================
</TABLE>

See Notes to Financial Statements

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<PAGE> 11

THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends............................................................... $ 1,323,621
Interest................................................................ 878,751
-----------------
Total income........................................................ $ 2,202,372

EXPENSES:
Market timing fees...................................................... 1,125,506
Investment management and advisory fees................................. 292,191
Insurance charges....................................................... 1,125,506
-----------------
Total expenses...................................................... 2,543,203
-----------------

Net investment loss.............................................. (340,831)
-----------------

REALIZED GAIN AND CHANGE IN UNREALIZED GAIN ON
INVESTMENT SECURITIES:
Realized gain from investment security transactions:
Proceeds from investment securities sold............................ 72,630,766
Cost of investment securities sold.................................. 55,509,564
-----------------

Net realized gain................................................ 17,121,202

Change in unrealized gain on investment securities:
Unrealized gain at December 31, 1996................................ 30,900,858
Unrealized gain at June 30, 1997.................................... 42,796,577
-----------------

Net change in unrealized gain for the period..................... 11,895,719
-----------------

Net realized gain and change in unrealized gain.............. 29,016,921
-----------------

Net increase in net assets resulting from operations.................... $ 28,676,090
=================
</TABLE>

See Notes to Financial Statements

-9-
<PAGE> 12

THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1997 1996
---- ----
(UNAUDITED)
<S> <C>
OPERATIONS:
Net investment loss........................................................ $ (340,831) $ (457,413)
Net realized gain from investment security transactions.................... 17,121,202 17,418,572
Net change in unrealized gain on investment securities..................... 11,895,719 14,261,912
--------------- ---------------

Net increase in net assets resulting from operations................... 28,676,090 31,223,071
--------------- ---------------

UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 1,209,678 and 3,669,841 units, respectively)............ 3,577,589 8,913,140
Participant transfers from other Travelers accounts
(applicable to 923,123 and 997,173 units, respectively)................ 2,748,142 2,447,373
Market timing transfers from other Travelers timed accounts
(applicable to 13,417,785 and 15,373,491 units, respectively).......... 40,990,166 41,324,850
Administrative charges
(applicable to 35,625 and 104,468 units, respectively)................. (115,270) (270,930)
Contract surrenders
(applicable to 2,648,067 and 6,643,488 units, respectively)............ (7,785,739) (16,458,034)
Participant transfers to other Travelers accounts
(applicable to 2,926,279 and 10,551,980 units, respectively)........... (8,654,365) (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 56,140 and 150,701 units, respectively)................. (162,595) (357,201)
--------------- ---------------

Net decrease in net assets resulting from unit transactions............ (15,157,558) (83,972,793)
--------------- ---------------

Net increase (decrease) in net assets............................... 13,518,532 (52,749,722)

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

End of period.............................................................. $ 198,536,683 $ 185,018,151
=============== ===============
</TABLE>

See Notes to Financial Statements

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<PAGE> 13

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

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 period; 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.

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.

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<PAGE> 14

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - 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.

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.

2. INVESTMENTS

The aggregate costs of purchases and proceeds from sales of investments
(other than short-term securities) for the six months ended June 30, 1997,
were $39,364,516 and $61,646,133, respectively. Realized gains and losses
from investment 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 $7,540 and $39,297 for the six months ended June 30,
1997 and the year ended December 31, 1996, respectively.

At June 30, 1997, Account TGIS held 104 open S&P 500 Stock Index futures
contracts expiring in September, 1997. The underlying face value, or
notional value, of these contracts at June 30, 1997 amounted to $46,293,000.
In connection with these contracts, short-term investments with a par value
of $1,920,000 had been pledged as margin deposits.

Net realized gains resulting from futures contracts were $3,762,080 and
$3,859,624 for the six months ended June 30, 1997 and the year ended
December 31, 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 June 30, 1997, is shown on the Statement of Assets and Liabilities as a
payable for variation on futures margin.

-12-
<PAGE> 15

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - 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 $53,612 and
$161,380 of contingent deferred sales charges for the six months ended June
30, 1997 and the year ended December 31, 1996, respectively.

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

<TABLE>
<CAPTION>
SIX
MONTHS
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, (DERIVED FROM AUDITED FINANCIAL INFORMATION)
---------- ------------------------------------------------------------
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income................................ $ .034 $ .061 $ .083 $ .064 $ .043 $ .046
Operating expenses..................................... .041 .069 .057 .041 .042 .045
---------- ---------- ---------- -------- ---------- ----------

Net investment income (loss)........................... (.007) (.008) .026 .023 .001 .001

Unit value at beginning of period...................... 2.717 2.263 1.695 1.776 1.689 1.643
Net realized and change in unrealized gains (losses)... .517 .462 .542 (.104) .086 .045
---------- ---------- ---------- -------- ---------- ----------

Unit value at end of period............................ $ 3.227 $ 2.717 $ 2.263 $ 1.695 $ 1.776 $ 1.689
========== ========== ========== ======== ========== ==========

SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase (decrease) in unit value.................. $ .51 $ .45 $ .57 $ (.08) $ .09 $ .05
Ratio of operating expenses to average net assets*..... 2.82 % 2.82 % 2.82 % 2.82 % 2.82 % 2.82 %
Ratio of net investment income (loss) to average net
assets*............................................... (.42)% (.34)% 1.37 % 1.58 % .08 % .78 %
Number of units outstanding at end of period
(thousands)........................................... 61,530 68,111 105,044 29,692 - 217,428
Portfolio turnover rate................................ 26 % 81 % 79 % 19 % 70 % 119 %
Average commission rate paid+.......................... $ .047 $ .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 period.

-13-
<PAGE> 16

THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF INVESTMENTS (UNAUDITED)
JUNE 30, 1997

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCKS (75.7%)

AEROSPACE (1.5%)
Allied Signal, Inc. 6,200 $ 520,800
Boeing Co. 7,800 413,888
Lockheed Martin Corporation 4,500 466,031
McDonnell Douglas Corp. 12,000 822,000
United Technologies Corp. 10,400 863,200
-------------
3,085,919
-------------

AIRLINES (0.2%)
Continental Airlines, Inc. (A) 13,500 471,656
-------------

AUTOMOTIVE (1.7%)
Chrysler Corp. 15,500 508,594
Cummins Engine 8,400 592,725
Ford Motor Co. 26,600 1,004,150
General Motors Corp. 15,500 863,156
Lear Corp. (A) 9,600 426,000
-------------
3,394,625
-------------

BANKING (5.9%)
Banc One Corp. 12,620 611,281
Bank of New York Co., Inc. 8,500 369,750
BankAmerica Corp. 23,000 1,484,937
Bank of Boston Corp. 12,600 907,987
Barnett Banks Inc. 4,300 225,750
Chase Manhattan Corp. 9,824 953,542
Citicorp 10,100 1,217,681
First Bank Systems, Inc. 3,100 264,662
First Chicago NBD 7,200 435,600
First Union Corp. (N.C.) 3,400 314,500
Golden West Financial Corp. 6,900 483,000
Mellon Bank Corp. 20,400 920,550
J.P. Morgan & Company 4,100 427,938
NationsBank Corp. 14,600 941,700
Northern Trust Corp. 10,600 513,106
Norwest Corp. 8,100 455,625
PNC Bank Corp. 7,100 295,538
SunTrust Banks, Inc. 4,900 269,806
Wells Fargo & Co. 2,200 592,903
-------------
11,685,856
-------------

BEVERAGE (2.1%)
Anheuser-Busch Cos. 11,100 465,506
Coca-Cola Co. 54,200 3,658,500
-------------
4,124,006
-------------

BROKERAGE (0.9%)
Marsh & McLennan Cos. 10,400 742,300
Merrill Lynch & Co. 7,400 441,225
Morgan Stanley Group, Inc. 13,140 565,841
-------------
1,749,366
-------------

BUILDING MATERIALS (0.3%)
Masco Corp. 14,700 613,725
-------------

CAPITAL GOODS (1.7%)
Boston Scientific Corp. (A) 4,100 251,894
Crane Co. 12,850 537,291
Deere & Co. 13,800 757,275
Emerson Electric Co. 9,900 545,119
Honeywell, Inc. 8,100 614,587
Illinois Tool Works 15,800 789,012
-------------
3,495,178
-------------

CHEMICALS (2.0%)
BetzDearborn, Inc. 6,700 $ 442,200
Cytec Industries, Inc. (A) 10,600 396,175
Dow Chemical 5,500 479,187
E.I. Dupont de Nemours & Co. 24,800 1,559,300
Monsanto Co. 23,900 1,029,194
-------------
3,906,056
-------------

CONSTRUCTION MACHINERY (0.3%)
Caterpillar, Inc. 4,500 483,188
-------------

CONSUMER (5.4%)
Colgate-Palmolive 6,800 443,700
Eastman Kodak Co. 7,300 560,275
General Electric Corp. 75,000 4,903,125
Gillette Co. 16,989 1,609,708
Procter & Gamble Co. 18,400 2,599,000
Unilever N.V. 3,100 675,800
-------------
10,791,608
-------------

CONSUMER SERVICES (0.5%)
Kimberly Clark Corp. 20,420 1,015,895
-------------

DEFENSE (0.1%)
Raytheon Co. 5,400 275,400
-------------

ENTERTAINMENT (0.9%)
Walt Disney Co. 15,141 1,215,065
U.S. Industries, Inc. (A) 17,900 637,688
-------------
1,852,753
-------------

ENVIRONMENTAL (0.2%)
Waste Management, Inc. 10,700 343,738
-------------

FOOD (2.7%)
CPC International, Inc. 8,400 775,425
Campbell Soup Co. 4,900 245,000
ConAgra, Inc. 13,200 846,450
Dean Foods Co. 14,200 573,325
Kellogg Co. 1,500 128,437
McDonalds Corp. 6,500 314,031
PepsiCo, Inc. 35,100 1,318,444
Pioneer Hi-Bred International 8,300 664,000
Sara Lee Corp. 10,900 453,712
-------------
5,318,824
-------------

FINANCE (1.2%)
American Express Company 11,100 826,950
HFS Inc. (A) 12,300 713,400
Household International 8,100 951,244
-------------
2,491,594
-------------

HEALTHCARE (1.4%)
Beverly Enterprises (A) 30,900 502,125
Columbia/HCA Healthcare Corp. 14,850 583,791
Guidant Corp. 8,400 714,000
PhyCor, Inc. (A) 15,100 519,534
U.S. Surgical Corp. 14,500 540,125
-------------
2,859,575
-------------
</TABLE>

-14-
<PAGE> 17
STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- ------------
<S> <C> <C>
INDEPENDENT ENERGY (0.4%)
AES Corp. (A) 6,200 $ 438,650
Louisiana Land & Exploration 7,700 439,863
-------------
878,513
-------------

INDUSTRIAL (1.2%)
AccuStaff, Inc. (A) 19,800 469,013
Automatic Data Process 7,000 329,000
Corning, Inc. 5,000 278,125
Minnesota Mining &
Manufacturing Co. 9,500 969,000
Whitman Corp. 11,100 266,400
-------------
2,311,538
-------------

INSURANCE (3.2%)
Aetna, Inc. 3,300 337,837
Allstate Corp. 10,038 732,774
AMBAC, Inc. 5,900 450,612
American International Group 10,650 1,590,844
CIGNA Corp. 1,700 301,750
Chubb Corp. 3,700 247,437
Conseco, Inc. 18,600 688,200
Hartford Financial Services
Group 10,400 860,600
Lincoln National Corp. 2,200 141,625
SunAmerica, Inc. 9,200 448,500
Transatlantic Holdings, Inc. 4,900 486,325
-------------
6,286,504
-------------

INTEGRATED ENERGY (5.5%)
Amoco Corp. 10,800 938,925
Atlantic Richfield Co. 5,200 366,600
Chevron Corp. 14,500 1,072,094
Exxon Corp. 47,000 2,890,500
Mobil Corp. 23,800 1,663,025
Royal Dutch Petroleum Co. 38,000 2,066,250
Texaco, Inc. 12,300 1,337,625
Unocal Corp. 17,200 667,575
-------------
11,002,594
-------------

LODGING (0.1%)
Hilton Hotels Corp. 6,000 159,375
-------------

MEDIA (1.6%)
Andrew Corp. 5,675 159,255
Gannett Co. 9,300 918,375
New York Times Co. 12,600 623,700
Tele-Communications-TCI (A) 15,100 224,140
Tele-Communications-
Liberty Media (A) 18,400 437,574
Time Warner, Inc. 12,100 583,825
Viacom, Inc. (A) 7,600 228,000
-------------
3,174,869
-------------

METALS (0.9%)
Aluminum Co. of America 6,000 452,250
Freeport-McMoRan Copper & Gold 16,800 522,900
Homestake Mining Co. 21,700 283,456
USX-U.S. Steel Group, Inc. 14,200 497,887
-------------
1,756,493
-------------

NATURAL GAS PIPELINE (1.0%)
Columbia Gas Systems, Inc. 9,100 $ 593,775
Enron Corp. 15,400 628,513
Pacific Enterprises 5,000 168,125
Sonat, Inc. 10,600 543,250
-------------
1,933,663
-------------

OIL FIELD (0.6%)
Baker Hughes, Inc. 14,600 564,838
Schlumberger Ltd. 5,400 675,000
-------------
1,239,838
-------------

PAPER (0.8%)
Avery Dennison Corp. 8,400 337,050
Georgia-Pacific Corp. 5,900 503,713
Mead Corp. 8,300 516,675
Weyerhaeuser Co. 4,500 234,000
-------------
1,591,438
-------------

PHARMACEUTICALS (7.2%)
Abbott Laboratories 11,000 734,250
American Home Products Corp. 8,500 650,250
Amgen 5,900 342,753
Bristol-Myers Squibb Co. 28,300 2,292,300
CVS Corp. 12,700 650,875
Johnson & Johnson 35,700 2,298,188
Lilly (Eli) & Co. 7,700 841,706
Merck & Co. 32,900 3,405,150
Pfizer, Inc. 14,100 1,684,950
Schering-Plough Corp. 16,600 794,725
Warner-Lambert Co. 6,000 745,500
-------------
14,440,647
-------------

RAILROADS (0.5%)
Burlington Northern Santa Fe 7,600 683,050
Union Pacific Corp. 4,800 338,400
-------------
1,021,450
-------------

REFINING (0.5%)
Amerada Hess 8,600 477,837
Ashland, Inc. 9,700 449,838
-------------
927,675
-------------

RETAILERS (3.3%)
Borders Group, Inc. (A) 19,800 477,675
Costco Companies, Inc. (A) 21,000 691,030
Federated Department
Stores, Inc. (A) 16,200 562,950
The Gap, Inc. 6,300 244,912
Home Depot, Inc. 11,200 772,100
Lowe's Cos. 16,000 594,000
Sears Roebuck & Co. 9,000 483,750
Stride Rite Corp. 33,400 430,025
TJX Companies, Inc. 21,800 574,975
Wal-Mart Stores, Inc. 51,800 1,751,487
-------------
6,582,904
-------------

SERVICES (3.0%)
Ecolab, Inc. 11,700 558,675
Equifax, Inc. 3,100 115,281
HBO & Co. 7,900 544,113
Medtronics, Inc. 5,400 437,400
Microsoft Corp. (A) 26,700 3,376,714
Oracle Corp. (A) 14,400 724,949
United Healthcare Corp. 4,200 218,400
-------------
5,975,532
-------------
</TABLE>

-15-
<PAGE> 18
STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- ------------
<S> <C> <C>
SUPERMARKETS (0.3%)
American Stores 12,300 $ 607,313
-------------

TECHNOLOGY (7.1%)
Advanced Micro Devices (A) 12,100 435,600
Applied Materials, Inc. (A) 4,000 283,125
Cisco Systems, Inc. (A) 14,500 973,765
Compaq Computer Corp. (A) 6,500 645,125
Computer Associates International 8,000 445,500
Dell Computer Corp. (A) 4,000 469,625
Gateway 2000, Inc. (A) 13,600 441,150
Hewlett-Packard Co. 22,500 1,260,000
Intel Corp. 15,300 2,166,384
International Business
Machines Corp. 23,200 2,092,350
LSI Logic Corp. (A) 18,500 592,000
McAfee Associates, Inc. (A) 7,400 466,662
Motorola, Inc. 16,700 1,269,200
Raychem Corp. 5,700 423,937
Read-Rite Corp. (A) 19,900 414,790
Seagate Technology, Inc. (A) 5,300 186,494
Sun Microsystems (A) 7,900 294,028
Texas Instruments, Inc. 3,900 327,844
3Com Corp. (A) 7,200 323,775
Westinghouse Electric Corp. 14,400 333,000
Xerox Corp. 7,600 599,450
-------------
14,443,804
-------------

TELECOMMUNICATIONS (5.4%)
AT&T Corp. 31,400 1,100,962
Ameritech Corp. 12,600 856,012
Bell Atlantic Corp. 10,000 758,750
BellSouth Corp. 22,700 1,052,712
GTE Corp. 18,900 829,238
Lucent Technologies 13,884 1,000,516
MCI Communications Corp. 15,400 589,530
Northern Telecommunications
Ltd 5,700 518,700
NYNEX Corp. 10,000 576,250
SBC Communications, Inc. 27,775 1,718,578
Sprint Corp. 7,700 405,212
US West Communications Group 4,100 154,519
WorldCom, Inc. (A) 35,200 1,125,298
-------------
10,686,277
-------------

TEXTILE (0.2%)
Nike, Inc. 5,600 326,900
-------------

TOBACCO (1.3%)
Fortune Brands, Inc. 3,800 141,788
Gallaher Group PLC (A) 3,800 70,062
Philip Morris Cos. 55,600 2,467,250
-------------
2,679,100
-------------

U.S. AGENCY (0.8%)
Federal Home Loan Mortgage
Corp. 16,800 577,500
Federal National Mortgage
Association 24,900 1,086,263
-------------
1,663,763
-------------

UTILITIES (1.7%)
Baltimore Gas & Electric Co. 14,300 $ 381,631
CalEnergy Co. (A) 11,800 448,400
Duke Power Co. 4,500 215,719
Edison International 27,700 689,037
FPL Group, Inc. 13,000 598,812
Houston Industries 6,000 128,625
PacifiCorp 6,300 138,600
Southern Co. 15,300 334,688
Texas Utilities Co. 12,000 413,250
-------------
3,348,762
-------------

TOTAL COMMON STOCKS
(COST $108,194,720) 150,997,914
-------------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
----------

<S> <C> <C>
SHORT-TERM INVESTMENTS (24.3%)

COMMERCIAL PAPER (23.2%)
Barclays U.S. Funding Corp.,
5.67% due July 21, 1997 $ 4,500,000 4,485,380
BHP Finance (USA), Inc.,
5.66% due July 7, 1997 1,451,000 1,449,350
Goldman Sachs Group LP,
5.74% due July 9, 1997 1,592,000 1,589,693
Goldman Sachs Group LP,
5.66% due July 10, 1997 2,350,000 2,346,233
Heinz (H.J.) Co.,
5.63% due July 3, 1997 4,500,000 4,497,768
Household Finance Corp.,
6.21% due July 1, 1997 1,852,000 1,852,000
IMI Funding Corp. (USA),
5.63% due July 7, 1997 3,000,000 2,996,589
Merrill Lynch & Co.,
5.68% due July 14, 1997 4,500,000 4,490,077
Morgan Stanley Group, Inc.,
5.68% due August 8, 1997 4,000,000 3,976,364
NYNEX Corp
5.65% due July 22, 1997 4,000,000 3,986,416
PacifiCorp,
5.63% due July 7, 1997 2,000,000 1,997,726
Pearson, Inc.,
5.67% due July 18, 1997 3,000,000 2,991,588
Private Export Funding Corp,
5.67% due July 31, 1997 4,500,000 4,478,859
Southern California Edison Co.,
5.65% due July 23, 1997 4,000,000 3,985,832
Toys R Us, Inc.,
5.60% due July 7, 1997 1,200,000 1,198,636
-------------
46,322,511
-------------
</TABLE>

-16-
<PAGE> 19
STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
U.S. TREASURY (1.1%)
United States of America Treasury,
5.25% due August 21, 1997 (B) $ 2,245,000 $ 2,228,968
-------------

TOTAL SHORT-TERM
INVESTMENTS (COST $48,558,096) 48,551,479
-------------

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

S&P 500 Stock Index,
Exp. September, 1997 (C) $ 46,293,000 -
-------------

TOTAL INVESTMENTS (100%)
(COST $156,752,816) (D) $ 199,549,393
=============
</TABLE>

NOTES

(A) Non-income Producing Security.

(B) Par value of $1,920,000 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 June 30, 1997, net unrealized appreciation for all securities was
$42,796,577. This consisted of aggregate gross unrealized appreciation
for all securities in which there was an excess of market value over cost
of $43,679,489 and aggregate gross unrealized depreciation for all
securities in which there was an excess of cost over market value of
$882,912.

See Notes to Financial Statements

-17-
<PAGE> 20

THE TRAVELERS
TIMED SHORT-TERM
BOND ACCOUNT
FOR VARIABLE ANNUITIES

The U.S. economy, fueled by strong job creation and retail sales, gained
momentum and Gross Domestic Product ("GDP") accelerated at a growth rate of
4.9% in the first quarter. As a preemptive move the Federal Reserve Board
("Fed") increased the federal funds rate by 0.25% to 5.50% at its March
meeting.

In the second quarter the financial markets rallied helped by a slowdown in the
economy's frenetic first quarter pace. GDP growth for the second quarter was
2.2%, significantly below first quarter growth. However, this may be just a
brief pause and the economy could return to a 3% growth track for the second
half of the year. Solid gains in jobs and income, advancing financial markets
and high levels of confidence form an ideal environment for heightened consumer
spending. This could possibly generate a squeeze in the labor markets and
trigger a shift in monetary policy. The timing and direction of the next Fed
move is uncertain and will occur only when there is a clear indication as to
the strength of the economy.

In light of this, the strategy in the management of The Travelers Timed
Short-Term Bond Account for Variable Annuities' short-term assets will be to
maintain maturities of less than 60 days. At June 30, 1997 the asset size of
the portfolio was $66.9 million with an average yield of 5.59% and an average
life of 18 days.

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 (UNAUDITED)
JUNE 30, 1997

<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (cost $66,943,474)................... $ 66,930,755
Receivables:
Interest................................................................ 42,222
Investment securities sold.............................................. 1,127,000
Purchase payments and transfers from other Travelers accounts........... 9,354
Other assets................................................................ 16
-----------------

Total Assets......................................................... 68,109,347
-----------------

LIABILITIES:
Cash overdraft.............................................................. 54,099
Payables:
Investment securities purchased......................................... 1,071,818
Contract surrenders and transfers to other Travelers accounts........... 4,376
Investment management and advisory fees................................. 5,960
Market timing fees...................................................... 9,169
Accrued liabilities......................................................... 24,027
-----------------

Total Liabilities.................................................... 1,169,449
-----------------

NET ASSETS:
(Applicable to 48,521,843 units outstanding at $1.379 per unit)............. $ 66,939,898
=================
</TABLE>

See Notes to Financial Statements

-19-
<PAGE> 22

THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest................................................................ $ 2,388,453

EXPENSES:
Market timing fees...................................................... $ 539,111
Investment management and advisory fees................................. 140,433
Insurance charges....................................................... 539,111
-----------------
Total expenses...................................................... 1,218,655
-----------------

Net investment income............................................ 1,169,798
-----------------

REALIZED LOSS AND CHANGE IN UNREALIZED 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 loss on investment securities:
Unrealized loss at December 31, 1996................................ (10,334)
Unrealized loss at June 30, 1997.................................... (12,719)
-----------------

Net change in unrealized loss for the period...................... (2,385)
-----------------

Net realized loss and change in unrealized loss.................. (2,721)
-----------------

Net increase in net assets resulting from operations.................... $ 1,167,077
=================
</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

<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1997 1996
---- ----
(UNAUDITED)
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 1,169,798 $ 2,112,194
Net realized gain (loss) from investment security transactions............. (336) 19,963
Net change in unrealized loss on investment securities..................... (2,385) (10,334)
----------------- -----------------
Net increase in net assets resulting from operations................... 1,167,077 2,121,823
----------------- -----------------

UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 1,649,715 and 3,580,147 units, respectively)............ 2,260,324 4,822,829
Participant transfers from other Travelers accounts
(applicable to 445,276 and 805,634 units, respectively)................ 609,321 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 30,943 and 85,517 units, respectively).................. (42,671) (115,494)
Contract surrenders
(applicable to 3,067,746 and 4,878,210 units, respectively)............ (4,201,227) (6,581,955)
Participant transfers to other Travelers accounts
(applicable to 4,001,508 and 10,743,375 units, respectively)........... (5,479,804) (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 103,977 and 210,672 units, respectively)................ (142,319) (283,688)
----------------- -----------------

Net increase (decrease) in net assets resulting from unit transactions. (8,501,857) 72,152,855
----------------- -----------------

Net increase (decrease) in net assets............................... (7,334,780) 74,274,678

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

End of period.............................................................. $ 66,939,898 $ 74,274,678
================= =================
</TABLE>

See Notes to Financial Statements

-21-
<PAGE> 24

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

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.

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.

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.

2. INVESTMENTS

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

-22-
<PAGE> 25

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - 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 $41,934 and
$72,688 of contingent deferred sales charges for the six months ended June
30, 1997 and the year ended December 31, 1996, respectively.

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

<TABLE>
<CAPTION>
SIX
MONTHS
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, (DERIVED FROM AUDITED FINANCIAL INFORMATION)
---------- ------------------------------------------------------------
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income............................... $ .041 $ .057 $ .074 $ .055 $ .041 $ .054
Operating expenses.................................... .021 .030 .035 .036 .037 .041
---------- ---------- --------- ---------- ---------- ----------

Net investment income................................. .020 .027 .039 .019 .004 .013

Unit value at beginning of period..................... 1.361 1.333 1.292 1.275 1.271 1.258
Net realized and change in unrealized gains (losses)*. (.002) .001 .002 (.002) - -
---------- ---------- --------- ---------- ---------- ----------
Unit value at end of period........................... $ 1.379 $ 1.361 $ 1.333 $ 1.292 $ 1.275 $ 1.271
========== ========== ========= ========== ========== ==========

SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase in unit value............................ $ .02 $ .03 $ .04 $ .02 $ - $ .01
Ratio of operating expenses to average net assets**... 2.82 % 2.82 % 2.82 % 2.82 % 2.82 % 2.82 %
Ratio of net investment income to average net assets** 2.71 % 2.47 % 3.17 % 1.45 % .39 % 1.12 %
Number of units outstanding at end of period
(thousands)............................................ 48,522 54,565 - 216,713 353,374 173,359
</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 (UNAUDITED)
JUNE 30, 1997

<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -------------

<S> <C> <C>
SHORT-TERM INVESTMENTS (100%)

COMMERCIAL PAPER (100%)
Allied Signal, Inc.,
5.66% due July 7, 1997 $ 2,000,000 $ 1,997,726
Barclays U.S. Funding Corp.,
5.67% due July 21, 1997 7,000,000 6,977,257
BHP Finance (USA), Inc.,
5.66% due July 8, 1997 1,000,000 998,705
General Electric Capital Corp.,
5.68% due July 17, 1997 4,000,000 3,989,384
Goldman Sachs Group LP,
5.64% due July 10, 1997 7,000,000 6,988,779
Heinz (H.J.) Co.,
5.65% due July 11, 1997 5,000,000 4,991,220
Household Finance Corp.,
6.21% due July 1, 1997 1,072,000 1,072,000
Merrill Lynch & Co.,
5.69% due July 9, 1997 4,000,000 3,994,204
NIPSCO Industries,
5.65% due July 21, 1997 5,110,000 5,093,398
NYNEX Corp.,
5.65% due July 22, 1997 5,000,000 4,983,020
PacifiCorp,
5.63% due July 7, 1997 3,770,000 3,765,714
Pearson, Inc.,
5.74% due July 1, 1997 1,400,000 1,399,766
Pearson, Inc.,
5.65% due July 14, 1997 5,258,000 5,246,406
Penney JC Funding Corp.,
5.66% due October 15, 1997 2,000,000 2,023,040
PPG Industries, Inc.,
5.60% due July 7, 1997 4,000,000 3,995,452
Progress Capital Holdings, Inc.,
5.67% due July 11, 1997 1,775,000 1,771,883
Progress Capital Holdings, Inc.,
5.67% due July 25, 1997 2,000,000 1,992,334
Southern California Edison Co.,
5.65% due July 23, 1997 3,675,000 3,661,983
Transamerica Financial Corp.,
5.54% due August 7, 1997 2,000,000 1,988,484
---------------

TOTAL INVESTMENTS (100%)
(COST $66,943,474) $ 66,930,755
===============
</TABLE>

See Notes to Financial Statements

-24-
<PAGE> 27

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") 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 that achieve earnings
growth above consensus expectations and whose stocks offer attractive relative
value. In order to achieve consistent relative performance, we manage Account
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 six months ending June 30, 1997, Account TAS had a total return of
11.7%, before fees and expenses, compared to the 13.0% total return of S&P 400.
Net of fees and expenses, Account TAS's total return of 10.3% for the first
half of 1997 was well ahead of the 7.1% average return achieved by variable
annuity stock funds in the Lipper Mid Cap Category. On a trailing twelve month
basis as of June 30, 1997, Account TAS's total return of 18.0%, net of fees and
expenses, significantly outperformed the Lipper Mid Cap Category average of
10.7%.

During the first half of 1997, stock selection in the financial services sector
made the strongest positive contribution to Account TAS's overall relative
performance. In financial services, our biggest relative performance gain came
from our overweighted position in a number of specialty property casualty
insurers whose shares were up strongly during the first half, including
Progressive Corp., Everest Reinsurance and Transatlantic Holdings. Account TAS
also benefited from overweighted positions in a number of better performing
banks, including Northern Trust and State Street, both of which are leveraging
their dominant position in global custody services to achieve above-average
revenue and earnings growth. We lost ground to the benchmark primarily in the
energy and technology sectors. In the energy sector, we were hurt by the
weakness of Chesapeake Energy Corporation in the oil exploration and production
group. The shares of Chesapeake declined sharply on news of disappointing
drilling results on the company's newest properties in Louisiana. In
technology, our relative performance suffered as a result of Account TAS being
underweighted in, or not invested in, a number of stocks that ran up strongly
on either takeover activity or positive earnings surprises. These included
Verifone (on a take-over by Hewlett-Packard), Stratus Computer and Solectron.

-25-
<PAGE> 28

In TIMCO's disciplined approach to stock selection, we emphasize stocks that
exhibit improving fundamentals (primarily gauged 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
LSI Logic, a leading designer and manufacturer of semiconductors used in
computer networking, telecommunications and emerging digital video systems. In
the health care sector, we are overweighted in PhyCor, one of the largest
physician management practice companies in the U.S., which recently dispelled
investor concerns with strong first quarter earnings and rebounded from
depressed valuation levels. In the consumer sector, our focus is on diversified
media companies like The New York Times and Tribune, as well as retailers that
demonstrate above-average sales and earnings momentum, including Family Dollar,
Fred Myer and TJX. In financial services and banking, we continue to emphasize
Northern Trust, Progressive and Conseco within their respective industry groups
for relative value and earnings momentum.

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

[TIMCO LOGO]

-26-
<PAGE> 29

THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1997

<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (cost $69,495,709)................... $ 79,446,403
Cash ..................................................................... 93,749
Receivables:
Dividends............................................................... 49,865
Investment securities sold.............................................. 1,671,694
Purchase payments and transfers from other Travelers accounts........... 13,830
-----------------

Total Assets......................................................... 81,275,541
-----------------

LIABILITIES:
Payables:
Investment securities purchased......................................... 1,622,294
Contract surrenders and transfers to other Travelers accounts........... 3,635
Investment management and advisory fees................................. 7,702
Market timing fees...................................................... 10,938
Variation on futures margin............................................. 93,750
Accrued liabilities......................................................... 32,103
-----------------

Total Liabilities.................................................... 1,770,422
-----------------

NET ASSETS:
(Applicable to 27,479,892 units outstanding at $2.893 per unit)............ $ 79,505,119
=================
</TABLE>

See Notes to Financial Statements

-27-
<PAGE> 30

THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends............................................................... $ 377,076
Interest................................................................ 376,133
-----------------

Total income........................................................ $ 753,209

EXPENSES:
Market timing fees...................................................... 461,360
Investment management and advisory fees................................. 129,164
Insurance charges....................................................... 461,360
-----------------
Total expenses...................................................... 1,051,884
-----------------

Net investment loss.............................................. (298,675)
-----------------

REALIZED GAIN AND CHANGE IN UNREALIZED GAIN ON
INVESTMENT SECURITIES:
Realized gain from investment security transactions:
Proceeds from investment securities sold............................ 52,595,602
Cost of investment securities sold.................................. 46,379,388
-----------------

Net realized gain................................................ 6,216,214

Change in unrealized gain on investment securities:
Unrealized gain at December 31, 1996................................ 9,464,831
Unrealized gain at June 30, 1997.................................... 9,950,694
-----------------

Net change in unrealized gain for the period..................... 485,863
-----------------

Net realized gain and change in unrealized gain.............. 6,702,077
-----------------

Net increase in net assets resulting from operations.................... $ 6,403,402
=================
</TABLE>

See Notes to Financial Statements

-28-
<PAGE> 31

THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1997 1996
---- ----
(UNAUDITED)
<S> <C> <C>
OPERATIONS:
Net investment loss........................................................ $ (298,675) $ (856,906)
Net realized gain from investment security transactions.................... 6,216,214 12,529,601
Net change in unrealized gain on investment securities..................... 485,863 (241,053)
----------------- -----------------

Net increase in net assets resulting from operations................... 6,403,402 11,431,642
----------------- -----------------

UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 995,323 and 3,129,051 units, respectively).............. 2,707,882 7,526,237
Participant transfers from other Travelers accounts
(applicable to 123,385 and 278,752 units, respectively)................ 333,909 669,093
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 20,775 and 54,428 units, respectively).................. (60,401) (138,199)
Contract surrenders
(applicable to 913,563 and 1,838,951 units, respectively).............. (2,485,172) (4,446,573)
Participant transfers to other Travelers accounts
(applicable to 2,065,097 and 6,716,867 units, respectively)............ (5,649,792) (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 6,870 and 68,124 units, respectively)................... (19,660) (171,099)
----------------- -----------------

Net decrease in net assets resulting from unit transactions............ (6,016,728) (35,032,646)
----------------- -----------------

Net increase (decrease) in net assets............................... 386,674 (23,601,004)

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

End of period.............................................................. $ 79,505,119 $ 79,118,445
=============== ===============
</TABLE>

See Notes to Financial Statements

-29-
<PAGE> 32

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

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.

-30-
<PAGE> 33

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - 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) for the six months ended June 30, 1997,
were $30,701,788 and $41,868,140, respectively. Realized gains and losses
from investments 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 $3,245 and $20,390 for the six months ended June 30,
1997 and the year ended December 31, 1996, respectively.

At June 30, 1997, Account TAS held 150 open S&P 400 MidCap Index futures
contracts expiring in September, 1997. The underlying face value, or
notional value, of these contracts at June 30, 1997, amounted to
$21,720,000. 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 $1,154,328 and
$1,080,235 for the six months ended June 30, 1997 and the year ended
December 31, 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 June 30, 1997, is shown on the Statement of Assets and Liabilities as a
payable for variation on futures margin.

-31-
<PAGE> 34

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - 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 $40,732 and
$77,439 of contingent deferred sales charges for the six months ended June
30, 1997 and the year ended December 31, 1996, respectively.

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

<TABLE>
<CAPTION>
SIX
MONTHS
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, (DERIVED FROM AUDITED FINANCIAL INFORMATION)
---------- -----------------------------------------------------------
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income............................... $ .027 $ .041 $ .042 $ .036 $ .037 $ .041
Operating expenses.................................... .038 .069 .057 .049 .048 .043
---------- ---------- --------- --------- ---------- ---------

Net investment loss................................... (.011) (.028) (.015) (.013) (.011) (.002)

Unit value at beginning of period..................... 2.623 2.253 1.706 1.838 1.624 1.495
Net realized and change in unrealized gains (losses).. .281 .398 .562 (.119) .225 .131
---------- ---------- --------- --------- ---------- ---------

Unit value at end of period........................... $ 2.893 $ 2.623 $ 2.253 $ 1.706 $ 1.838 $ 1.624
========== ========== ========= ========= ========== =========

SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase (decrease) in unit value................. $ .27 $ .37 $ .55 $ (.13) $ .21 $ .13
Ratio of operating expenses to average net assets*.... 2.85 % 2.84 % 2.83 % 2.80 % 2.82 % 2.93 %
Ratio of net investment loss to average net assets*... (.86)% (1.13)% (.74)% (.72)% (.80)% (.12)%
Number of units outstanding at end of period
(thousands)............................................ 27,480 30,167 45,575 25,109 43,059 20,225
Portfolio turnover rate............................... 51 % 98 % 113 % 142 % 71 % 269 %
Average commission rate paid+......................... $ .042 $ .047 - - - -

</TABLE>

* Annualized.

-32-
<PAGE> 35

THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF INVESTMENTS (UNAUDITED)
JUNE 30, 1997

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- ------------
<S> <C> <C>
COMMON STOCKS (72.4%)

AEROSPACE (1.1%)
Litton Industries (A) 3,700 $ 178,756
Precision Castparts Corp. 4,800 286,200
Sundstrand Corp. 7,700 415,800
-------------
880,756
-------------

AIRLINES (0.3%)
Continental Airlines, Inc. (A) 5,800 202,638
-------------

AUTOMOTIVE (0.6%)
Harley Davidson, Inc. 6,000 287,625
Lear Corp. (A) 4,500 199,687
-------------
487,312
-------------

BANKING (6.6%)
AmSouth Bancorp 4,350 164,484
Capital One Financial Corp. 5,100 192,525
City National Corp. 10,700 257,469
Crestar Financial Corp. 4,800 186,600
First of America Bank Corp. 3,750 171,562
First Empire State Corp. 600 202,200
First Tennesse National Corp. 9,600 461,700
Firstar Corp. 6,200 189,100
Hibernia Corp. 10,500 146,344
Marshall & Ilsley Corp. 7,200 292,725
Mercantile Bancorp, Inc. 3,200 194,400
Mercantile Bankshares Corp. 8,700 347,184
Northern Trust Corp. 12,600 609,918
Regions Financial Corp. 10,000 316,875
SouthTrust Corp. 12,100 501,394
State Street Boston Corp. 13,000 601,250
Summit Bancorp 3,500 175,437
Union Planters Corp. 4,000 207,500
-------------
5,218,667
-------------

BEVERAGE (0.8%)
Coca-Cola Enterprises, Inc. 26,300 604,900
-------------

BROKERAGE (1.7%)
Bear Stearns Cos. 5,126 175,245
Franklin Resources, Inc. 9,750 707,484
Lehman Brothers Holding, Inc. 4,800 194,400
Paine Webber Group, Inc. 7,400 259,000
-------------
1,336,129
-------------

BUILDING MATERIALS (0.5%)
Bemis Company 4,200 181,650
Watts Industries, Inc. 9,200 220,800
-------------
402,450
-------------

CAPITAL GOODS (2.2%)
Crane Co. 5,450 227,878
Danaher Corp. 7,900 401,419
Diebold, Inc. 5,300 206,700
Leggett & Platt, Inc. 7,400 318,200
OEA, Inc. 5,100 201,450
Thiokol Corp. 3,800 266,000
York International, Inc. 3,500 161,000
-------------
1,782,647
-------------

CHEMICALS (3.0%)
BetzDearborn, Inc. 4,800 $ 316,800
Biogen, Inc. (A) 5,800 196,656
Centocor, Inc. (A) 9,800 304,106
Crompton & Knowles Corp. 12,200 271,450
Cytec Industries, Inc. (A) 7,900 295,262
IMC Global, Inc. 7,500 262,500
International Specialty
Products, Inc. (A) 13,000 182,812
Lubrizol Corp. 2,500 104,844
Mylan Labs, Inc. 9,700 143,075
Olin Corp. 3,900 152,344
Praxair, Inc. 3,100 173,600
-------------
2,403,449
-------------

CONSTRUCTION MACHINERY (0.4%)
AGCO Corp 9,900 355,781
-------------

CONSUMER (0.5%)
Alberto-Culver Co. 8,600 200,488
Dial Corp. 14,900 232,812
-------------
433,300
-------------

ENTERTAINMENT (1.0%)
International Game Technology 10,100 179,275
Mirage Resorts, Inc. (A) 13,600 343,400
U.S. Industries, Inc. (A) 6,900 245,813
-------------
768,488
-------------

ENVIRONMENTAL (0.6%)
USA Waste Service, Inc. (A) 5,400 147,150
U.S. Filter Corp. (A) 6,000 231,750
United Waste Systems, Inc. (A) 2,200 90,063
-------------
468,963
-------------

FINANCE (0.4%)
Echelon International Corp. (A) 13 297
HFS Inc. (A) 2,810 162,980
Provident Companies, Inc. 2,400 128,400
-------------
291,677
-------------

FOOD (2.2%)
Cracker Barrel Old Country Store 4,800 126,900
Dean Foods Co. 8,400 339,150
Dole Food Co. 9,100 389,025
Interstate Bakeries Corp. 3,700 219,456
McCormick & Co. 6,400 162,000
Pioneer Hi-Bred International 2,400 192,000
Tyson Foods, Inc. 16,500 314,531
-------------
1,743,062
-------------

HEALTHCARE (2.4%)
Acuson Corp. (A) 9,700 223,100
Apria Healthcare Group, Inc. (A) 3,900 69,225
Foundation Health Systems (A) 9,460 286,756
HEALTHSOUTH Corp. (A) 6,700 167,081
PacifiCare Health Systems (A) 5,200 331,987
PhyCor, Inc. (A) 7,500 258,047
Tenet Healthcare Corporation (A) 6,500 192,156
U.S. Surgical Corp. 5,100 189,975
Vencor, Inc. (A) 5,300 223,925
-------------
1,942,252
-------------

HOME CONSTRUCTION (0.2%)
Clayton Homes, Inc. 9,150 130,388
-------------
</TABLE>

-33-
<PAGE> 36

STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- ------------
<S> <C> <C>
INDEPENDENT ENERGY (2.0%)

AES Corp. (A) 8,300 $ 587,225
Anadarko Petroleum Corp. 4,800 288,000
Apache Corp. 7,100 230,750
Louisiana Land & Exploration 3,000 171,375
Noble Affiliates, Inc. 9,000 348,188
-------------
1,625,538
-------------

INDUSTRIAL (2.5%)
AccuStaff, Inc. (A) 7,900 187,131
Cambridge Technology
Partners, Inc. (A) 5,800 184,150
Cintas Corp. 3,800 261,488
Hillenbrand Industries 5,200 247,000
Jacobs Engineering Group, Inc. (A) 8,000 215,000
Miller (Herman), Inc. 7,800 279,825
Noble Drilling Corp. (A) 7,900 178,244
Sealed Air Corp. (A) 7,400 351,500
Whitman Corp. 3,400 81,600
-------------
1,985,938
-------------

INSURANCE (4.5%)
AFLAC, Inc. 5,650 266,962
AMBAC, Inc. 5,300 404,787
American Bankers Insurance
Group, Inc. 3,000 189,562
Conseco, Inc. 5,700 210,900
Oxford Health Plans (A) 9,000 646,031
PMI Group, Inc. 2,800 174,650
Progressive Corp. 7,800 678,600
SunAmerica, Inc. 12,900 628,875
Transatlantic Holdings, Inc. 3,900 387,075
-------------
3,587,442
-------------

LODGING (0.5%)
Circus Circus Enterprises, Inc. (A) 7,900 194,537
Promus Hotel Corp. (A) 3,900 151,125
-------------
345,662
-------------

MEDIA (1.6%)
Belo (A.H.) Corp. 4,700 195,637
Evergreen Media Corp. (A) 4,000 178,250
New York Times Co. 4,000 198,000
Tele-Communications-
Liberty Media (A) 7,600 180,737
Tribune Co. 4,600 221,088
Washington Post Co. 800 318,400
-------------
1,292,112
-------------

METALS (0.7%)
Alumax, Inc. (A) 4,400 166,925
LTV Corp. 12,900 183,825
USX-U.S. Steel Group, Inc. 5,200 182,325
-------------
533,075
-------------

NATURAL GAS DISTRIBUTORS (1.3%)
Brooklyn Union Gas Co. 9,600 274,800
Consolidated Natural Gas Co. 3,000 161,437
El Paso Natural Gas Co. 2,200 121,000
MCN Energy Group, Inc. 5,100 156,188
National Fuel Gas Co. 8,500 356,469
-------------
1,069,894
-------------

NATURAL GAS PIPELINE (0.5%)
Columbia Gas Systems, Inc. 3,400 221,850
MAPCO, Inc. 4,400 138,600
-------------
360,450
-------------

OIL FIELD (2.2%)
BJ Services Co. (A) 6,500 $ 348,563
ENSCO International, Inc. (A) 5,600 295,400
Global Marine, Inc. (A) 19,200 446,400
Tidewater, Inc. 4,600 202,400
Transocean Offshore, Inc. 4,000 290,500
Weatherford Enterra, Inc. (A) 4,200 161,700
-------------
1,744,963
-------------

PAPER (1.2%)
Avery Dennison Corp. 2,300 92,287
Boise Cascade Corp. 4,700 165,969
Bowater, Inc. 5,700 263,625
James River Corp. 5,200 192,400
Mead Corp. 2,900 180,525
Reynolds & Reynolds 6,100 96,075
-------------
990,881
-------------

PHARMACEUTICALS (1.4%)
Bergen Brunswig Corp. 3,875 108,016
Chiron Corp. (A) 5,068 105,636
CVS Corp. 4,774 244,667
Genzyme Corp. (A) 5,800 160,588
McKesson Corp. 1,200 93,000
Watson Pharmaceuticals, Inc. (A) 9,100 383,906
-------------
1,095,813
-------------

RAILROADS (0.5%)
Illinois Central Corp. 4,900 171,194
Kansas City Southern
Industries, Inc. 2,900 187,050
-------------
358,244
-------------

REFINING (1.3%)
Amerada Hess 3,800 211,138
Murphy Oil Corp. 3,600 175,500
Tosco Corp. 10,600 317,337
Valero Energy Corp. 8,300 300,875
-------------
1,004,850
-------------

RETAILERS (5.7%)
Bed Bath & Beyond, Inc. (A) 11,500 349,671
Best Buy Company, Inc. (A) 16,700 248,412
Borders Group, Inc. (A) 7,500 180,938
Claire's Stores, Inc. 13,100 229,250
Consolidated Stores Corp. (A) 6,500 225,875
Costco Companies, Inc. (A) 5,300 174,403
Dollar General Corp. 7,350 275,625
Family Dollar Stores 12,300 335,175
Fred Meyer, Inc. (A) 5,600 289,450
General Nutrition Cos. (A) 6,300 176,006
Kohl's Corp. (A) 5,900 312,331
Lands' End, Inc. (A) 8,500 251,812
Office Depot, Inc. (A) 13,000 252,688
Payless ShoeSource, Inc. (A) 6,600 360,937
Staples, Inc. (A) 19,975 463,170
TJX Companies, Inc. 2,600 120,088
Tiffany & Co. 7,200 189,900
Viking Office Products, Inc. (A) 6,700 126,881
-------------
4,562,612
-------------
</TABLE>

-34-
<PAGE> 37

STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
---------- ------------
<S> <C> <C>
SERVICES (3.2%)
Cadence Design System, Inc. (A) 13,425 $ 449,737
Ecolab Inc. 4,100 195,775
HBO & Co. 3,100 213,513
Manpower, Inc. 6,600 293,700
Omnicom Group 6,500 400,563
Paychex, Inc. 8,475 325,228
Stryker Corp. 7,800 273,243
SunGard Data Systems, Inc. (A) 3,400 158,100
Xilinx Inc. (A) 5,200 254,962
-------------
2,564,821
-------------

TECHNOLOGY (9.3%)
Adaptec Inc. (A) 4,500 156,375
Altera Corp. (A) 7,000 353,718
America Online, Inc. (A) 7,000 389,375
American Power Conversion (A) 7,600 143,687
Analog Devices, Inc. (A) 12,200 324,063
Arrow Electronics (A) 4,000 212,500
Atmel Corp. (A) 7,800 218,888
Avnet, Inc. 3,500 201,250
BMC Software, Inc. (A) 11,800 654,162
Comdisco, Inc. 5,700 148,200
Compuware Corporation (A) 6,800 325,550
ENCAD, Inc. (A) 4,600 191,763
Gartner Group, Inc. (A) 5,100 183,122
Hubbell, Inc. 9,000 396,000
Lam Research Corp. (A) 4,400 163,212
Linear Technology Corp. 9,600 495,900
LSI Logic Corp. (A) 6,400 204,800
Maxim Integrated Products (A) 4,900 278,381
McAfee Associates, Inc. (A) 2,900 182,881
Molex, Inc. 4,750 173,523
NCR Corporation (A) 7,900 235,025
Policy Management Systems (A) 5,400 253,800
Quantum Corp. (A) 9,000 183,093
Raychem Corp. 2,000 148,750
Read-Rite Corp. (A) 7,800 162,581
Solectron Corp. (A) 3,900 273,244
Storage Technology Corp. (A) 4,900 218,050
Symbol Technologies, Inc. 8,100 272,362
Teradyne Inc. (A) 6,400 251,200
-------------
7,395,455
-------------

TELECOMMUNICATIONS (1.6%)
ADC Telecommunications, Inc. (A) 9,600 321,000
Century Telephone Enterprises 4,900 165,069
NEXTEL Communications, Inc. (A) 18,100 342,202
Southern New England Telephone 5,200 202,150
Telephone & Data Systems, Inc. 4,900 185,894
360 Communications Company (A) 5,400 92,475
-------------
1,308,790
-------------

TEXTILE (1.0%)
Jones Apparel Group, Inc. (A) 7,700 367,675
Unifi, Inc. 10,700 399,913
-------------
767,588
-------------

TOBACCO (0.3%)
Universal Corp. 8,200 $ 260,350
-------------
TRANSPORTATION (0.7%)
Alexander & Baldwin 10,100 264,178
GATX Corp. 4,500 259,875
-------------
524,053
-------------

UTILITIES (5.9%)
Allegheny Power Systems, Inc. 15,200 405,650
Baltimore Gas & Electric Co. 7,200 192,150
Boston Edison Co. 6,500 171,438
CalEnergy Co. (A) 10,000 380,000
CMS Energy Corp. 14,000 493,500
Florida Progress Corp. 7,900 247,369
Illinova Corp. 5,900 129,800
IPALCO Enterprises, Inc. 4,500 140,625
Louisville Gas & Electric Co. 12,200 269,163
NIPSCO Industries 9,000 371,812
Northeast Utilities 10,100 96,581
Pinnacle West Capital 12,200 366,762
Public Service Co. of Colorado 10,800 448,200
SCANA Corp. 14,800 367,225
TECO Energy, Inc. 16,300 416,669
Wisconsin Energy Corp. 9,000 223,875
-------------
4,720,819
-------------

TOTAL COMMON STOCKS
(COST $47,597,908) 57,552,209
-------------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
-----------
<S> <C> <C>
SHORT-TERM INVESTMENTS (27.6%)
COMMERCIAL PAPER (26.7%)
Allied Signal, Inc.,
5.63% due July 11, 1997 $ 1,680,000 1,677,050
Barclays U.S. Funding Corp.,
5.68% due July 3, 1997 1,800,000 1,799,107
BHP Finance (USA), Inc.,
5.66% due July 7, 1997 1,049,000 1,047,807
Chase Manhattan Bank,
5.57% due July 8, 1997 1,300,000 1,298,435
Dillard Investment Co., Inc.,
5.63% due July 8, 1997 1,500,000 1,498,059
Goldman Sachs Group LP,
5.63% due July 2, 1997 1,500,000 1,499,502
Heinz (H.J.) Co.,
5.66% due July 14, 1997 1,000,000 997,795
Household Finance Corp.,
6.21% due July 1, 1997 707,000 707,000
</TABLE>

-35-
<PAGE> 38

STATEMENT OF INVESTMENTS (UNAUDITED) - CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
COMMERCIAL PAPER (CONTINUED)
IMI Funding Corp. (USA),
5.69% due July 7, 1997 $ 750,000 $ 749,147
IMI Funding Corp. (USA),
5.64% due July 21, 1997 1,000,000 996,751
Merrill Lynch & Co.,
5.69% due July 14, 1997 1,323,000 1,320,083
NYNEX Corp.,
5.65% due July 21, 1997 1,800,000 1,794,152
Pacific Gas & Electric Co.,
5.69% due July 24, 1997 1,000,000 996,312
Pearson, Inc.,
5.64% due July 21, 1997 1,500,000 1,495,127
Philip Morris, Cos.,
5.65% due July 21, 1997 1,500,000 1,495,127
Toys R Us, Inc.,
5.60% due July 7, 1997 1,800,000 1,797,953
-------------
21,169,407
-------------

U.S. TREASURY (0.9%)
United States of America Treasury,
5.24% due August 21, 1997 (B) 730,000 724,787
-------------

TOTAL SHORT-TERM
INVESTMENTS (COST $21,897,801) 21,894,194
-------------

NOTIONAL
VALUE
----------
FUTURES CONTRACTS (0.0%)
S&P 400 MidCap Index,
Exp. September, 1997 (C) $ 21,720,000 -
--------------

TOTAL INVESTMENTS (100%)
(COST $69,495,709) (D) $ 79,446,403
==============
</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 June 30, 1997, net unrealized appreciation for all securities was
$9,950,694. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over cost of
$11,013,643 and aggregate gross unrealized depreciation for all securities
in which there was an excess of cost over market value of $1,062,949.

See Notes to Financial Statements

-36-
<PAGE> 39
THE TRAVELERS
TIMED BOND ACCOUNT
FOR VARIABLE ANNUITIES

The second quarter came on the heels of a Federal Reserve Board's ("Fed")
tightening in March. By the end of the first quarter, the 30-year Treasury
yield rose to 7.10%, posting a negative 4.44% return. Market expectations of
another Fed move at the May meeting kept interest rates high for the first half
of the second quarter, diminishing only after a negative reading on April
retail sales was observed in the middle of May. By the time the quarter had
finished, rates were essentially at the levels very close to where we began the
year. The 15+ year Treasury Index returned a healthy 5.58% return in the second
quarter. Demand for spread product continued into the second quarter. Mortgage
backed securities fared better than Treasuries on a duration adjusted basis,
beating Treasuries by 0.54%. The best performing mortgages were those slight
premium securities with coupons in the 7.00%-8.00% range, with GNMAs performing
best, which tightened as yields rose as their embedded refinancing options
moved out of the money.

In the government securities market, agency debentures fared marginally better
as their yield advantage created a small total return edge. Among Treasuries,
the on-the-run performed poorly in the second quarter. The 2015-2016 year
sector traded in line with market direction, as these were the
cheapest-to-deliver into the bond futures contract. As the market traded off,
futures would lead the way down, causing these maturities to underperform, and
to outperform when the market rallied. The best performers in the 15+ year
government index were Treasuries maturing in years 2015, 2017, 2019 and 2023.

A timing move from cash to bonds occurred on June 16th. The fund remains in
line with the index duration. FICO Strip Securities are used for additional
yield, and the portfolio has greater dollar duration exposure to mortgages. A
small steepening bet from 10s to 30s is also in place, which should pay off if
the market continues to move higher. Going forward, we are neutral in duration,
but maintain our overexposure to the mortgage market.

PORTFOLIO MANAGER: JOSEPH M. MULLALLY

[TAMIC LOGO]

-37-
<PAGE> 40

THE TRAVELERS TIMED BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF ASSETS AND LIABILITIES (UNAUDITED)
JUNE 30, 1997

<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (cost $10,598,428)................... $ 10,555,727
Cash........................................................................ 72,385
Receivables:
Interest................................................................ 77,486
Purchase payments and transfers from other Travelers accounts........... 600
-----------------

Total Assets......................................................... 10,706,198
-----------------

LIABILITIES:
Payables:
Investment securities purchased......................................... 3,703,859
Contract surrenders and transfers to other Travelers accounts........... 14
Investment management and advisory fees................................. 965
Market timing fees...................................................... 961
Accrued liabilities......................................................... 2,413
-----------------

Total Liabilities.................................................... 3,708,212
-----------------

NET ASSETS:
(Applicable to 5,708,010 units outstanding at $1.226 per unit).............. $ 6,997,986
=================
</TABLE>

See Notes to Financial Statements

-38-
<PAGE> 41

THE TRAVELERS TIMED BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS (UNAUDITED)
FOR THE SIX MONTHS ENDED JUNE 30, 1997

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest................................................................ $ 16,397

EXPENSES:
Market timing fees...................................................... $ 3,385
Investment management and advisory fees................................. 1,350
Insurance charges....................................................... 3,385
-----------------
Total expenses...................................................... 8,120
-----------------

Net investment income............................................ 8,277
-----------------

Change in unrealized loss on investment securities:
Unrealized loss at December 31, 1996................................ -
Unrealized loss at June 30, 1997.................................... (42,701)
-----------------

Net change in unrealized loss for the period..................... (42,701)
-----------------

Net decrease in net assets resulting from operations................ $ (34,424)
=================
</TABLE>

See Notes to Financial Statements

-39-
<PAGE> 42

THE TRAVELERS TIMED BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS

<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEAR ENDED
JUNE 30, DECEMBER 31,
1997 1996
---- ----
(UNAUDITED)
<S> <C> <C>
OPERATIONS:
Net investment income...................................................... $ 8,277 $ 189,762
Net realized loss from investment security transactions.................... - (1,050,523)
Net change in unrealized gain (loss) on investment securities.............. (42,701) (698,966)
----------------- -----------------

Net decrease in net assets resulting from operations................... (34,424) (1,559,727)
----------------- -----------------

UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 10,089 and 243,706 units, respectively)................. 12,433 324,504
Participant transfers from other Travelers accounts
(applicable to 3,603 and 13,851 units, respectively)................... 4,513 19,555
Market timing transfers from other Travelers timed accounts
(applicable to 5,774,393 and 18,855,866 units, respectively)........... 7,114,295 24,121,224
Administrative charges
(applicable to 4,851 and 72 units, respectively)....................... (5,963) (94)
Contract surrenders
(applicable to 987 and 318,514 units, respectively).................... (1,218) (428,452)
Participant transfers to other Travelers accounts
(applicable to 74,237 and 992,326 units, respectively)................. (91,650) (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 increase (decrease) in net assets resulting from unit transactions. 7,032,410 (14,303,859)
----------------- -----------------

Net increase (decrease) in net assets............................... 6,997,986 (15,863,586)

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

End of period.............................................................. $ 6,997,986 $ -
================= =================
</TABLE>

See Notes to Financial Statements

-40-
<PAGE> 43

NOTES TO FINANCIAL STATEMENTS (UNAUDITED)

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 (UNAUDITED) - 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 of direct and indirect U.S. government
obligations were $6,804,676, for the six months ended June 30, 1997.
Realized gains and losses from investment 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 $9,844 of
contingent deferred sales charges for the year ended December 31, 1996. No
contingent deferred sales charges were deducted for the period ended June
30, 1997.

-42-
<PAGE> 45

NOTES TO FINANCIAL STATEMENTS (UNAUDITED) - CONTINUED

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

<TABLE>
<CAPTION>
SIX
MONTHS
ENDED FOR THE YEARS ENDED DECEMBER 31,
JUNE 30, (DERIVED FROM AUDITED FINANCIAL INFORMATION)
---------- ------------------------------------------------------------
1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income............................... $ .003 $ .033 $ .071 $ .007 $ .054 $ .051
Operating expenses.................................... .001 .015 .031 .006 .036 .032
---------- ---------- --------- --------- --------- ---------

Net investment income................................. .002 .018 .040 .001 .018 .019

Unit value at beginning of period..................... 1.232 1.383 1.215 1.234 1.132 1.087
Net realized and change in unrealized gains (losses).. (.008) (.169) .128 (.020) .084 .026
---------- ---------- --------- --------- --------- ---------

Unit value at end of period........................... $ 1.226 $ 1.232 $ 1.383 $ 1.215 $ 1.234 $ 1.132
========== ========== ========= ========= ========= =========

SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase (decrease) in unit value................. $ (.01) $ (.15) $ .17 $ (.02) $ .10 $ .05
Ratio of operating expenses to average net assets*.... 3.00 % 3.00 % 3.00 % 3.00 % 3.00 % 2.99 %
Ratio of net investment income to average net assets*. 2.83 % 3.48 % 3.98 % 1.02 % 1.48 % 1.71 %
Number of units outstanding at end of period
(thousands)............................................ 5,708 - 11,466 - 20,207 21,868
Portfolio turnover rate............................... - 153 % 117 % - 190 % 505 %
</TABLE>

* Annualized.

-43-
<PAGE> 46

THE TRAVELERS TIMED BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF INVESTMENTS (UNAUDITED)
JUNE 30, 1997

<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- ------------
<S> <C> <C>
U.S. GOVERNMENT AGENCY
SECURITIES (38.0%)

FICO Strip Principal,
0.0% Notes, 2019 $ 1,500,000 $ 312,875
FNMA 30yr Conventional
Intermediate Term,
7.00% Pass Through, 2027 2,000,000 1,961,562
FHLMC Gold 30yr PC,
8.00% Pass Through, 2027 1,200,000 1,229,437
GNMA 30yr Single Family Issue,
7.50% Pass Through, 2027 500,000 501,797
-------------

TOTAL U.S. GOVERNMENT
AGENCY SECURITIES
(COST $4,021,040) 4,005,671
-------------

U.S. GOVERNMENT
SECURITIES (26.1%)

United States of America Treasury,
12.00% Bonds, 2013 500,000 704,219
United States of America Treasury,
8.13% Bonds, 2019 1,800,000 2,053,125
-------------

TOTAL U.S. GOVERNMENT
SECURITIES (COST $2,783,885) 2,757,344
-------------

SHORT-TERM INVESTMENTS (35.9%)

COMMERCIAL PAPER (35.9%)
Allied Signal, Inc.,
5.67% due July 7, 1997 $ 350,000 $ 349,602
Dillard Investment Co., Inc.,
5.64% due July 8, 1997 350,000 349,547
Ford Motor Credit Co.,
5.62% due July 14, 1997 350,000 349,228
General Electric Capital Corp.,
5.63% due July 14, 1997 350,000 349,228
Goldman Sachs Group LP,
5.65% due July 9, 1997 350,000 349,494
Merrill Lynch & Co.,
5.66% due July 14, 1997 350,000 349,228
Pearson, Inc.,
5.64% due July 14, 1997 350,000 349,228
PPG Industries, Inc.,
5.58% due July 14, 1997 350,000 349,228
Progress Capital Holdings, Inc.,
5.65% due July 11, 1997 300,000 299,473
Prudential Funding Corp.,
5.62% due July 14, 1997 350,000 349,228
TECO Financial, Inc.,
5.61% due July 14, 1997 350,000 349,228
-------------

TOTAL SHORT-TERM
INVESTMENTS (COST $3,793,503) 3,792,712
-------------

TOTAL INVESTMENTS (100%)
(COST $10,598,428) (A) $ 10,555,727
=============
</TABLE>

NOTES

(A) At June 30, 1997, gross and net unrealized depreciation for all securities
was $42,701.

See Notes to Financial Statements

-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

The financial information included herein has been taken from the records 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. This financial information has not been
audited by the Accounts' independent accountants, who therefore express no
opinion concerning its accuracy. However, it is management's opinion that all
proper adjustments have been made.

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 (S/A) (6-97) Printed in U.S.A.