TRAVELERS GROUP INC, 424B5, 1996-05-09

TRAVELERS GROUP INC
424B5, 1996-05-09
PERSONAL CREDIT INSTITUTIONS

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Filed pursuant to Rule 424(b)(5)
Registration No. 333-00741

PROSPECTUS
TRAVELERS GROUP INC.

Offer to Exchange its 7% Notes due December 1, 2025
which have been registered under the Securities Act for
any and all of its outstanding 7% Notes due December 1, 2025

Travelers Group Inc., a Delaware corporation (the "Company"), hereby
offers, upon the terms and subject to the conditions set forth in this
Prospectus and in the accompanying Letter of Transmittal (which together
constitute the "Exchange Offer"), to exchange up to $100,000,000 in
aggregate principal amount of a new series of its 7% Notes due December 1,
2025 (the "Exchange Notes") for $100,000,000 in aggregate principal amount
of its outstanding 7% Notes due December 1, 2025 (the "Notes").

The Exchange Offer is not conditioned upon any minimum aggregate
principal amount of Notes being tendered for exchange. The Exchange Offer
will expire at 5:00 p.m., New York City time, on June 6, 1996, unless
extended (the "Expiration Date"). The date of acceptance for exchange of
the Notes (the "Exchange Date") will be the first business day following
the Expiration Date.

The terms of the Exchange Notes are substantially identical in all
respects (including principal amount, interest rate and maturity) to the
terms of the Notes for which they may be exchanged pursuant to this offer,
except that the Exchange Notes are freely transferable by holders thereof
(except as provided in the next paragraph below), because they will be
registered under the Securities Act of 1933, as amended (the "Securities
Act"), and will be issued free from any covenant regarding registration
under the Securities Act and the related penalty interest rates. The
Exchange Notes will evidence the same debt as the Notes and will be
entitled to the benefits of the same Indenture (as defined herein) as the
Indenture governing the Notes. For a more complete description of the
terms of the Exchange Notes, see "Description of the Exchange Notes."
There will be no cash proceeds to the Company from this offer.

The Notes were originally issued and sold on December 8, 1995 in a
transaction not registered under the Securities Act in reliance upon the
exemption provided in Section 4(2) of the Securities Act. Accordingly, the
Notes may not be reoffered, resold or otherwise pledged, hypothecated or
transferred in the United States unless so registered or unless an
applicable exemption from the registration requirements of the Securities
Act is available. The Exchange Notes are being offered hereunder in order
to satisfy the obligations of the Company under a registration rights
agreement relating to the Notes. See "Registration Rights Agreement."
Based on no-action letters issued by the staff of the Securities and
Exchange Commission (the "Commission") to third parties, the Company
believes the Exchange Notes issued pursuant to the Exchange Offer in
exchange for Notes may be offered for resale, resold and otherwise
transferred by holders thereof (other than any holder that is a broker-
dealer, as provided for below, or an "affiliate" of the Company within the
meaning of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act
provided that such Exchange Notes are acquired in the ordinary course of
such holders' business and such holders have no arrangement with any person
to participate in the distribution of such Exchange Notes. To the extent that
Smith Barney Inc., a broker-dealer and an affiliate of the Company ("Smith
Barney"), tenders Notes for exchange in the Exchange Offer, its participation
will not be in reliance upon such no-action letters. Each broker-dealer,
including Smith Barney, that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with resales of such Exchange Notes. See "Plan of
Distribution" for additional information regarding prospectus delivery
requirements that may be imposed on such broker-dealers. See "Participation by
Smith Barney Inc." for additional information regarding Smith Barney's
participation in the Exchange Offer.

<PAGE>

Holders of Notes whose Notes are not tendered and accepted in the
Exchange Offer will continue to hold such Notes and will be entitled to all
the rights and preferences and will be subject to the limitations
applicable thereto under the Indenture governing the Notes and the Exchange
Notes. Following timely consummation of the Exchange Offer, the holders of
Notes will continue to be subject to the existing restrictions upon
transfer thereof, the Company will have no further obligation to such
holders to provide for the registration under the Securities Act of the
Notes held by them and the Notes will continue to bear interest at the rate
of 7% per annum.

The Company will pay all the expenses incurred by it incident to the
Exchange Offer. Tenders of Notes pursuant to the Exchange Offer may be
withdrawn at any time prior to the Expiration Date (as defined herein);
otherwise tenders for exchange are irrevocable. Any Notes not accepted for
exchange for any reason will be returned without expense to the tendering
holders thereof as promptly as practicable after the expiration or
termination of the Exchange Offer. See "The Exchange Offer."

The Exchange Notes will be initially represented by one or more global
notes registered in the name of The Depository Trust Company ("DTC") or its
nominee. Beneficial interests in the Exchange Notes will be shown on, and
transfers thereof will be effected only through, records maintained by DTC
and its participants.

Interest on the Exchange Notes shall accrue from the last June 1 or
December 1 (an "Interest Payment Date") on which interest was paid on the
Notes so surrendered or, if no interest has been paid on such Notes, from
December 1, 1995. Holders whose Notes are accepted for exchange will be
deemed to have waived the right to receive any payment in respect of
interest on the Notes.

The Notes and the Exchange Notes constitute new issues of securities
with no established trading market. Any Notes not tendered and accepted in
the Exchange Offer will remain outstanding. To the extent that Notes are
tendered and accepted in the Exchange Offer, a holder's ability to sell
untendered Notes could be adversely affected. No assurance can be given as
to the existence or liquidity of the trading market for either the Notes
or the Exchange Notes.

See "Risk Factors" beginning on page 14 for a description of certain
factors that should be considered by holders of Notes who are considering
participating in the Exchange Offer.

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

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

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

This Prospectus may also be used after the Expiration Date by broker-
dealers in connection with resales of Exchange Notes that they receive in
exchange for Notes acquired for their own account as a

<PAGE>

result of market-making or other trading activities, to the extent that
such broker-dealers are thereby obligated to deliver a prospectus with
respect to such resales. See "Plan of Distribution."

The date of this Prospectus is May 6, 1996

NO DEALER, SALESPERSON OR OTHER INDIVIDUAL HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE EXCHANGE OFFER COVERED BY THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY. THIS
PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN
OFFER TO BUY, THE EXCHANGE NOTES IN ANY JURISDICTION WHERE, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE IN
THE FACTS SET FORTH IN THIS PROSPECTUS OR IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF.

FOR NORTH CAROLINA PURCHASERS: THESE SECURITIES HAVE NOT BEEN APPROVED
OR DISAPPROVED BY THE COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH
CAROLINA, NOR HAS THE COMMISSIONER OF INSURANCE RULED UPON THE ACCURACY
OR THE ADEQUACY OF THIS PROSPECTUS.

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

This Prospectus incorporates documents by reference that are not
presented herein or delivered herewith. These documents are available upon
request from Corporate Communications and Investor Relations, Travelers
Group Inc., 388 Greenwich Street, New York, New York 10013; telephone (212)
816-8000. In order to ensure timely delivery of the documents, any request
should be made by five business days prior to the Expiration Date.

<PAGE>

TABLE OF CONTENTS
Page
----

AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 6

INFORMATION INCORPORATED BY REFERENCE . . . . . . . . . . . . . . . . . . 6

PROSPECTUS SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
The Exchange Offer . . . . . . . . . . . . . . . . . . . . . . . . . 9
Description of the Exchange Notes . . . . . . . . . . . . . . . . .10

Summary Consolidated Financial Information . . . . . . . . . . . . .13

RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Consequences of Failure to Exchange . . . . . . . . . . . . . . . 14
Exchange Offer Procedures . . . . . . . . . . . . . . . . . . . . 14

THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

RECENT DEVELOPMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Aetna Transaction . . . . . . . . . . . . . . . . . . . . . . . . 15

USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

THE EXCHANGE OFFER . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Purpose of the Exchange Offer . . . . . . . . . . . . . . . . . . 17
Terms of Exchange . . . . . . . . . . . . . . . . . . . . . . . . 18
Expiration Date; Extensions; Termination; Amendments . . . . . . . 19
How to Tender . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Exchanging Book-Entry Notes . . . . . . . . . . . . . . . . . . . 21
Terms and Conditions of the Letter of Transmittal . . . . . . . . 21
Withdrawal Rights . . . . . . . . . . . . . . . . . . . . . . . . 22
Acceptance of Notes for Exchange; Delivery of Exchange Notes . . . 23
Conditions to the Exchange Offer . . . . . . . . . . . . . . . . . 23
Exchange Agent . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Solicitation of Tenders; Expenses . . . . . . . . . . . . . . . . 24
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

CAPITALIZATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

SELECTED CONSOLIDATED FINANCIAL INFORMATION . . . . . . . . . . . . . . 27

RATIO OF EARNINGS TO FIXED CHARGES . . . . . . . . . . . . . . . . . . 28

<PAGE>

Page
----

DESCRIPTION OF THE EXCHANGE NOTES . . . . . . . . . . . . . . . . . . . 28

General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Book-Entry Notes . . . . . . . . . . . . . . . . . . . . . . . . . 29
Same-Day Settlement and Payment . . . . . . . . . . . . . . . . . 31
Payments of Principal and Interest . . . . . . . . . . . . . . . . 31
Redemption . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Summary of Certain Provisions of the Indenture . . . . . . . . . . 32

DESCRIPTION OF NOTES . . . . . . . . . . . . . . . . . . . . . . . . . 35

REGISTRATION RIGHTS AGREEMENT . . . . . . . . . . . . . . . . . . . . . 35

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS . . . . . . . . . . . . . . . 37
Exchange of Notes . . . . . . . . . . . . . . . . . . . . . . . . 37
Backup Withholding and Information Reporting on Exchange Notes . . 38

PLAN OF DISTRIBUTION 38

PARTICIPATION BY SMITH BARNEY INC. . . . . . . . . . . . . . . . . . . 39

EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

ERISA MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

EXCHANGE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

<PAGE>

AVAILABLE INFORMATION

The Company has filed with the Commission a Registration Statement on
Form S-4 (the "Registration Statement," which term shall include all
amendments, exhibits, annexes and schedules thereto) pursuant to the
Securities Act, and the rules and regulations promulgated thereunder,
covering the Exchange Notes being offered hereby. This Prospectus does not
contain all the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules and
regulations of the Commission. For further information reference is hereby
made to the Registration Statement. Statements made in this Prospectus as
to the contents of any contract, agreement or other document referred to
are not necessarily complete. With respect to each such contract,
agreement or other document filed as an exhibit to the Registration
Statement or incorporated by reference herein, reference is made to the
exhibit for a more complete description of the matter involved, and each
such statement shall be deemed qualified in its entirety by such reference.

The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the
Commission. Such reports and other information can be inspected and copied
at the public reference facilities maintained by the Commission at: Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549; Citicorp Center, 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and Seven
World Trade Center, New York, New York 10048. Copies of such material can
also be obtained from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The
Company's Common Stock is listed on the New York Stock Exchange and the
Pacific Stock Exchange, and such reports, proxy statements and other
information can also be inspected at the offices of the New York Stock
Exchange, Inc., 20 Broad Street, New York, New York 10005, and The Pacific
Stock Exchange Incorporated, 301 Pine Street, San Francisco, California
94104, and 233 South Beaudry Avenue, Los Angeles, California 90012.

The Company intends, and is required by the terms of the Indenture (as
defined herein), to furnish to the Trustee under the Indenture (i) annual
reports containing the information required to be contained in Form 10-K,
(ii) quarterly reports containing the information required to be contained
in Form 10-Q, and (iii) promptly after the occurrence of an event required
to be therein reported, such other reports containing information required
to be contained in Form 8-K. The Company has also agreed to comply with
the requirements of Section 314(a) of the Trust Indenture Act of 1939, as
amended.

INFORMATION INCORPORATED BY REFERENCE

The Company incorporates by reference the following documents heretofore
filed with the Commission pursuant to the Exchange Act:

1. Annual Report on Form 10-K of the Company for the fiscal year ended
December 31, 1995;

<PAGE>

2. Current Reports on Form 8-K of the Company, dated
January 16, 1996, January 19, 1996, as amended,
April 2, 1996, as amended, and April 15, 1996.

All documents filed by the Company pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the later of (i) the termination or completion of the Exchange
Offer and (ii) the expiration of the period during which any broker-dealer
who holds Notes acquired for its own account as a result of market-making
or other trading activities, and who receives Exchange Notes in exchange
for such Notes pursuant to the Exchange Offer, is obligated for that reason
to deliver a prospectus meeting the requirements of the Securities Act with
respect to resales by it of the Exchange Notes so received, shall be deemed
to be incorporated by reference in this Prospectus and to be a part hereof
from the date of the filing of such documents.

Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is
or is deemed to be incorporated by reference herein modifies or supersedes
such statement. Any such statement so modified or superseded shall not be
deemed to constitute a part of this Prospectus except as so modified or
superseded.

<PAGE>

PROSPECTUS SUMMARY

The following information is qualified in its entirety by
reference to the more detailed information appearing elsewhere
in this Prospectus.

The Company

The Company is a financial services holding company
engaged, through its subsidiaries, principally in four business
segments: Investment Services, Consumer Finance Services, Life
Insurance Services and Property & Casualty Insurance Services.

The Company's Investment Services segment consists of
investment banking, asset management, brokerage and other
financial services provided through Smith Barney Holdings Inc.
and its subsidiaries. The Company's Consumer Finance Services
segment includes consumer lending services and credit card and
credit-related insurance services provided through Commercial
Credit Company and its subsidiaries. The Company's Life Insurance
Services segment includes individual life insurance, annuities and
pension programs which are offered primarily through The Travelers
Insurance Company, The Travelers Life and Annuity Company and the
Primerica Financial Services group of companies, including Primerica
Life Insurance Company. The Company's Property & Casualty Insurance
Services segment provides commercial and personal property and casualty
products throughout the United States. Property and casualty insurance
policies are issued primarily by subsidiaries of the Company's newly
formed indirect majority-owned subsidiary, Travelers/Aetna Property
Casualty Corp. ("TAP") and affiliated property-casualty insurance
companies, including Gulf Insurance Company.

In addition to its four business segments, the Company's
Corporate and Other segment consists of unallocated expenses and
earnings primarily related to interest, corporate administration,
and certain corporate investments.

On April 2, 1996, TAP purchased from Aetna Life and Casualty Company
("Aetna") all of the outstanding capital stock of The Aetna Casualty and
Surety Company ("ACSC") and The Standard Fire Insurance Company ("SFIC")
for $4.16 billion in cash.

The principal offices of the Company are located at 388
Greenwich Street, New York, New York 10013; telephone (212) 816-
8000. The Company was incorporated in Delaware in 1988.

<PAGE>

The Exchange Offer

Securities Offered $100,000,000 aggregate principal
amount of 7% Notes due December 1,
2025. The Exchange Notes will be
issued under the Indenture (as
defined herein) pursuant to which
the Notes were issued. The terms
of the Exchange Notes and the Notes
are identical in all material
respects, except that (i) the
Exchange Notes are freely
transferable by holders thereof
(except as provided herein), (ii)
the Exchange Notes are not subject
to the Registration Rights
Agreement, and (iii) the Exchange
Notes do not provide for an
increase in the interest rate upon
failure to register the Notes
("Penalty Interest"). See
"Description of the Exchange
Notes."

The Exchange Offer The Exchange Notes are being
offered in exchange for a like
principal amount of Notes. The
issuance of the Exchange Notes is
intended to satisfy obligations of
the Company to provide certain
registration rights granted to
holders of Notes in the
Registration Rights Agreement. For
procedures for tendering, see "The
Exchange Offer."

Tenders, Expiration Date, The Exchange Offer will expire on
Withdrawal the Expiration Date as set forth on
the cover page of this Prospectus.
Notes tendered pursuant to the
Exchange Offer may be withdrawn at
any time prior to the Expiration
Date. Any Notes not accepted for
exchange for any reason will be
returned without expense to the
tendering holder thereof as
promptly as practicable after the
expiration or termination of the
Exchange Offer. See "The Exchange
Offer."

Conditions to the Exchange Offer The Exchange Offer is subject to
certain conditions. See "The
Exchange Offer -- Certain
Conditions to the Exchange Offer."
The Exchange Offer is not, however,
conditioned upon any minimum
aggregate principal amount of Notes
being tendered for exchange.

<PAGE>

Federal Income Tax Consequences The exchange pursuant to the Exchange
Offer will not result in any income,
gain or loss to the holders or the
Company for federal income tax
purposes. See "Certain Federal Income
Tax Considerations."

Use of Proceeds There will be no cash proceeds to the
Company from the exchange pursuant to
the Exchange Offer.

Exchange Agent The Bank of New York is serving as
Exchange Agent in connection with the
Exchange Offer.

Description of the Exchange Notes

The terms of the Exchange Notes are substantially identical to the terms of the
Notes.

The Exchange Notes $100,000,000 principal amount
of 7% Notes due December 1,
2025.

Maturity Date December 1, 2025

Interest Payable June 1 and December 1,
commencing on the later of
June 1, 1996 or the first such
date occurring after the
closing of the Exchange Offer.
Interest will accrue from the
last Interest Payment Date on
which interest was paid on the
Notes surrendered in the
Exchange Offer or, if no
interest has been paid on such
Notes, from December 1, 1995.

Ranking The Exchange Notes are general
unsecured obligations of the
Company and will be pari passu
in right of payment to all
existing and future unsecured
senior indebtedness or
obligations of the Company.

<PAGE>

Redemption The Exchange Notes are not
subject to any sinking fund
obligation and may not be
redeemed by the Company or any
holder thereof prior to
maturity.

Certain Covenants The Indenture contains
covenants that, among other
things, limit (i) the creation
of liens on certain assets of
the Company and certain of its
subsidiaries and (ii)
consolidations, mergers and
transfers of all or
substantially all the
Company's assets. These
limitations, however, are
subject to a number of
important qualifications. See
"Description of the Exchange
Notes."

Effect on Holders of Notes As a result of the making of,
and upon timely acceptance for
exchange of all validly
tendered Notes pursuant to,
this Exchange Offer, the
Company will have fulfilled an
obligation contained in the
Registration Rights Agreement
(the "Registration Rights
Agreement") dated December 5,
1995, among the Company and
Smith Barney Inc., Bear,
Stearns & Co. Inc., CS First
Boston Corporation, J.P.
Morgan Securities Inc., Lehman
Brothers Inc., Merrill Lynch,
Pierce, Fenner & Smith
Incorporated, Morgan Stanley &
Co. Incorporated and Salomon
Brothers Inc (collectively,
the "Initial Purchasers") and,
assuming that the Exchange
Offer is completed as
contemplated herein, there
will be no increase in the
interest rate on the Notes pursuant
to the terms of the Registration
Rights Agreement and the holders of
the Notes will have no further
registration or other rights under
the Registration Rights Agreement.
Holders of the Notes who do not
tender their Notes in the Exchange
Offer will continue to hold such
Notes and will be entitled to all the
rights and limitations applicable
thereto under the Indenture, except
for any such rights under the
Registration Rights Agreement, which
by their terms terminate or cease to
have further effectiveness as a result
of the making of, and the acceptance
for exchange of all validly tendered
Notes pursuant to, the Exchange
Offer.

<PAGE>

All untendered Notes will continue to
be subject to the restrictions on
transfer provided for the in the
Notes. To the extent that the Notes
are tendered and accepted in the
Exchange Offer, the trading market
for untendered Notes could be
adversely affected.

<PAGE>

SUMMARY CONSOLIDATED FINANCIAL INFORMATION

The following consolidated financial and operating information of the Company
does not purport to be complete and is qualified in its entirety by reference
to the more detailed financial information contained elsewhere herein and
incorporated by reference.

<TABLE>
<CAPTION>
Year Ended December 31, (1)
----------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
(In millions of dollars, except per share amounts)

Income Statement Data:
Total revenues (2) $ 16,583 $ 14,943 $ 6,797 $5,125 $6,608
========= ======== ======= ====== ======

Income from continuing operations $ 1,628 $ 1,157 $ 951 $ 756 $ 479
Discontinued operations 206 169 - - -
Cumulative effect of accounting changes(3) - - (35) (28) -
--------- -------- ------- ------ ------
Net income $ 1,834 $ 1,326 $ 916 $ 728 $ 479
========= ======== ======= ====== ======
Net income per common share data:
Income from continuing operations $ 4.86 $ 3.34 $ 3.88 $ 3.34 $ 2.14
Discontinued operations 0.65 0.52 - - -
Cumulative effect of accounting changes - - (0.14) (0.12) -
--------- -------- ------- ------ ------
Net income $ 5.51 $ 3.86 $ 3.74 $ 3.22 $ 2.14
========= ======== ======= ====== ======

Cash dividends per common share $ 0.800 $ 0.575 $ 0.490 $0.363 $0.225
========= ======== ======= ====== ======

At December 31, (1)
----------------------------------------------
Balance Sheet Data:
Total assets $114,475 $115,297 $101,290 $24,151 $ 21,561
Long-term debt $ 9,190 $ 7,075 $ 6,991 $ 3,951 $ 4,327
Stockholders' equity(4) $ 11,710 $ 8,640 $ 9,326 $ 4,229 $ 3,280

Book value per common share $ 34.50 $ 24.77 $ 26.06 $ 17.70 $ 15.10
Book value per common share, excluding
FAS 115 adjustment $ 32.11 $ 28.94

</TABLE>

(1) Results of operations prior to 1994 exclude the amounts of The
Travelers Insurance Group Inc. ("TIGI"), except that results for 1993
include the Company's equity in earnings relating to the 27 %
interest purchased in December 1992. Results of operations
include amounts related to all of the assets and certain of the
liabilities of the domestic retail brokerage business and the asset
management business of Shearson Lehman Brothers Inc. (the "Shearson
Businesses") from July 31, 1993, the date of acquisition. Data
relating to financial position for the years prior to 1993
exclude amounts for TIGI and the Shearson Businesses.

(2) Revenues for 1991 include those of Fingerhut Companies, Inc.
(Fingerhut), which had been carried as a consolidated subsidiary.

(3) Included in net income for 1993 is an after-tax charge of $17 million
resulting from the adoption of Statement of Financial Accounting
Standards No. 106, "Employers' Accounting for Postretirement Benefits
Other Than Pensions," and an after-tax charge of $18 million resulting
from the adoption of Statement of Financial Accounting Standards No.
112, "Employers' Accounting for Postemployment Benefits." Included in
net income for 1992 is an after-tax charge of $28 million resulting
from the adoption of Statement of Financial Accounting Standards No.
109, "Accounting for Income Taxes."

(4) Stockholders' equity at December 31, 1995 and 1994 reflects $756
million of net unrealized gains on investment securities and
$1.3 billion of net unrealized losses on investment securities,
respectively, pursuant to the adoption of FAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" in 1994.

<PAGE>

RISK FACTORS

Holders of Notes should consider carefully all of the information set
forth in this Prospectus and, in particular, should evaluate the following
considerations before determining whether to tender their Notes in the Exchange
Offer.

Consequences of Failure to Exchange

Holders of Notes who do not exchange their Notes for Exchange Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Notes as set forth in the legend thereon as a consequence
of the issuance of the Notes pursuant to exemptions from, or in transactions
not subject to, the registration requirements of the Securities Act and
applicable state securities laws. In general, the Notes may not be offered or
sold unless registered under the Securities Act, except pursuant to an
exemption from, or in a transaction not subject to, the Securities Act and
applicable state securities laws. The Company does not currently anticipate
that it will register the Notes under the Securities Act. Based on
interpretations by the staff of the Commission, Exchange Notes issued pursuant
to the Exchange Offer in exchange for Notes may be offered for resale, resold
or otherwise transferred by holders thereof (other than any such holder that is
a broker-dealer, as provided for herein, or an "affiliate" of the Company
within the meaning of Rule 405 under the Securities Act) without compliance
with the registration and prospectus delivery provisions of the Securities Act
provided that such Exchange Notes are acquired in the ordinary course of such
holders' business and such holders have no arrangement with any person to
participate in the distribution of such Exchange Notes. See "Plan of
Distribution" for additional information regarding prospectus delivery
requirements that may be imposed on certain broker-dealers.

Exchange Offer Procedures

Issuance of the Exchange Notes pursuant to the Exchange Offer will be made
only after the timely receipt of a book-entry confirmation, or a properly
completed and duly executed Letter of Transmittal or completion of a Notice of
Guaranteed Delivery and all other required documents. Therefore, holders of
Notes desiring to tender such Notes in exchange for Exchange Notes should allow
sufficient time to ensure timely delivery. The Company is under no duty to
give notification of defects or irregularities with respect to the tenders of
Notes for exchange. Notes that are not tendered or are tendered but not
accepted will, following the consummation of the Exchange Offer, continue to be
subject to the existing restrictions upon transfer thereof and the Company will
have no further obligation to provide for the registration of such Notes under
the Securities Act. In addition, any holder of Notes who tenders in the
Exchange Offer for the purpose of further distribution of the Exchange Notes
may be deemed to be an "underwriter" with respect to the Exchange Offer and, if
so, will be required to comply with the registration and prospectus delivery
requirements of the Securities Act in connection with any resale transaction.
See "Plan of Distribution." To the extent that Notes are tendered and accepted
in the Exchange Offer, the trading market, if any, for untendered and tendered
but unaccepted Notes could be adversely affected. See "The Exchange Offer."

<PAGE>

THE COMPANY

The Company is a financial services holding company engaged, through its
subsidiaries, principally in four business segments: Investment Services,
Consumer Finance Services, Life Insurance Services and Property & Casualty
Insurance Services.

The Company's Investment Services segment consists of investment banking,
asset management, brokerage and other financial services provided through Smith
Barney Holdings Inc. and its subsidiaries. The Company's Consumer Finance
Services segment includes consumer lending services and credit card and
credit-related insurance services provided through Commercial Credit Company
and its subsidiaries. The Company's Life Insurance Services segment includes
individual life insurance, annuities and pension programs which are offered
primarily through The Travelers Insurance Company, The Travelers Life and
Annuity Company and the Primerica Financial Services group of companies,
including Primerica Life Insurance Company. The Company's Property & Casualty
Insurance Services segment provides commercial and personal property and
casualty products throughout the United States. Property and casualty
insurance policies are issued primarily by subsidiaries of TAP and affiliated
property-casualty insurance companies, including Gulf Insurance Company.

In addition to its four business segments, the Company's Corporate and
Other segment consists of unallocated expenses and earnings primarily related
to interest, corporate administration, and certain corporate investments.

The principal offices of the Company are located at 388 Greenwich Street,
New York, New York 10013; telephone (212) 816-8000. The Company was
incorporated in Delaware in 1988.

RECENT DEVELOPMENTS

Aetna Transaction

The Acquisition

On April 2, 1996, TAP purchased from Aetna all of the outstanding capital
stock of ACSC and SFIC for $4.16 billion in cash. TAP also owns The Travelers
Indemnity Company ("Travelers Indemnity"), and is the primary vehicle through
which the Company engages in the property and casualty insurance industry.

15
<PAGE>

To permanently finance the purchase of ACSC and SFIC, (i) TIGI, a wholly
owned subsidiary of the Company, acquired approximately 328 million shares of
Class B Common Stock of TAP in exchange for contributing the outstanding capital
stock of Travelers Indemnity and a capital contribution of approximately $1.14
billion, (ii) the Company purchased from TAP $540 million of Series Z
Preferred Stock of TAP, of which $100 million remains outstanding, (iii) TAP
sold shares of its Class A Common Stock to four private investors, including
Aetna, for an aggregate of $525 million, (iv) TAP issued $695 million of
commercial paper, (v) TAP issued 38,979,314 shares of its Class A Common Stock
in an initial public offering for aggregate net proceeds of approximately $926
million, (vi) TAP issued $200 million of 7 3/4% Notes due April 15, 2026 and
$500 million of 6 3/4% Notes due April 15, 2001 and (vii) TAP issued $800
million of 8.08% Subordinated Deferrable Interest Debentures to a subsidiary
trust which in turn issued a like amount of preferred securities in a public
offering.

The Company funded its purchase of Series Z Preferred Stock of TAP and the
capital contribution made by TIGI from the issuance of $920 million of senior
debt (including the Notes and the 6 1/4% Notes due 2005 of the Company issued
concurrently with the Notes (the "10-Year Notes")), and from $760 million of
cash on hand. TAP redeemed all but $100 million of the Series Z Preferred
Stock on April 30, 1996.

<PAGE>

USE OF PROCEEDS

There will be no cash proceeds to the Company from the Exchange Offer.
The net proceeds from the original sale of the Notes and the 10-Year Notes
were applied to the purchase price in the Aetna Transaction. See "Recent
Developments--Aetna Transaction."

THE EXCHANGE OFFER

Purpose of the Exchange Offer

The Notes were originally issued and sold on December 8, 1995. Such sales were
not registered under the Securities Act in reliance upon the exemption provided
by Section 4(2) of the Securities Act. In connection with the sale of the
Notes, the Company agreed to file with the Commission and have declared
effective a registration statement relating to an exchange offer (the "Exchange
Offer Registration Statement") pursuant to which another series of notes of the
Company covered by such registration statement and containing substantially the
same terms as the Notes would be offered in exchange for Notes tendered at the
option of the holders thereof or, if applicable interpretations of the staff of
the Commission did not permit the Company to effect such an exchange offer, the
Company agreed, at its cost, to file a

<PAGE>

shelf registration statement covering resales of the Notes (the "Resale
Registration Statement") and to use all reasonable efforts to have such Resale
Registration Statement declared effective and kept effective for a period of
three years from the effective date thereof. In the event that (i) the Company
failed to file the Exchange Offer Registration Statement or, if applicable, the
Resale Registration Statement, (ii) the Exchange Offer Registration Statement
or, if applicable, the Resale Registration Statement, was not declared
effective by the Commission, or (iii) all Notes validly tendered were not
accepted for exchange pursuant to the terms of the Exchange Offer or the Resale
Registration Statement ceased to remain effective, in each case within
specified time periods, Penalty Interest would accrue on the Notes and be
payable in cash until completion of such filing, declaration of effectiveness
or completion of such exchange. See "Registration Rights Agreement."

The purpose of the Exchange Offer is to fulfill the Company's obligations
with respect to the Registration Rights Agreement.

Terms of Exchange

The Company hereby offers to exchange, subject to the conditions set forth
herein and in the Letter of Transmittal accompanying this Prospectus, $1,000 in
principal amount of Exchange Notes for each $1,000 in principal amount of the
Notes. The terms of the Exchange Notes are substantially identical in all
material respects to the terms of the Notes for which they may be exchanged
pursuant to this Exchange Offer, except that the Exchange Notes will generally
be freely transferable by holders thereof and will not be subject to any
covenant regarding registration or the payment of Penalty Interest. The
Exchange Notes will evidence the same debt as the Notes and will be entitled to
the benefits of the Indenture. See "Description of the Exchange Notes."

The Company will accept for exchange any and all Notes that are validly
tendered and are not withdrawn prior to expiration of the Exchange Offer.
Holders may tender some or all of their Notes pursuant to the Exchange Offer.
The Exchange Offer is not conditioned upon any minimum aggregate principal
amount of Notes being tendered for exchange.

Based on an interpretation by the Staff of the Commission set forth in no-
action letters issued to third parties, the Company believes that Exchange
Notes issued pursuant to the Exchange Offer in exchange for Notes generally may
be offered for sale, resold and otherwise transferred by any holder of such
Exchange Notes (other than any such holder that is a broker-dealer, as provided
for herein, or an "affiliate" of the Company within the meaning of Rule 405
under the Securities Act) without compliance with the registration and
prospectus delivery provisions of the Securities Act, provided that such
Exchange Notes are acquired in the ordinary course of such holder's business
and such holder has no arrangement or understanding with any person to
participate in the distribution of such Exchange Notes. To the extent that Smith
Barney tenders Notes for exchange in the Exchange Offer, its participation will
not be in reliance upon such no-action letters. See "Participation by Smith
Barney Inc." Any holder who tenders Notes in the Exchange Offer for the purpose
of participating in a distribution of the Exchange Notes cannot rely on such
interpretation by the Staff of the Commission and must comply with the
registration and prospectus delivery requirements of the Securities Act in
connection with a secondary resale transaction. Each broker-dealer, including
Smith Barney, that receives Exchange Notes for its own account pursuant to the
Exchange Offer must acknowledge that it will deliver a prospectus in connection
with resales of the

<PAGE>

Exchange Notes. See "Plan of Distribution" for additional information
regarding prospectus delivery requirements that may be imposed on such broker-
dealers.

Interest on the Exchange Notes shall accrue from the last Interest Payment
Date on which interest was paid on the Notes surrendered in the Exchange Offer
or, if no interest has been paid on such Notes, from December 1, 1995. Holders
whose Notes are accepted for exchange will be deemed to have waived the right
to receive any payment in respect of interest on the Notes.

Tendering holders of the Notes shall not be required to pay brokerage
commissions or fees or (unless a transfer of registration of the Exchange
Notes is requested in the Letter of Transmittal), transfer taxes with respect
to the exchange of the Notes pursuant to the Exchange Offer.

Expiration Date; Extensions; Termination; Amendments

The Exchange Offer shall expire on the Expiration Date. The term
"Expiration Date" means 5:00 p.m., New York time, on June 6, 1996,
unless the Company in its sole discretion extends the period during which the
Exchange Offer is open, in which event the term "Expiration Date" shall mean
the latest time and date on which the Exchange Offer, as so extended by the
Company, shall expire. The Company reserves the right to extend the Exchange
Offer at any time and from time to time by giving oral or written notice to The
Bank of New York ("BNY") (the "Exchange Agent") and by timely public
announcement communicated, unless otherwise required by applicable law or
regulation, by issuing a press release to the Dow Jones News Service. During
any extension of the Exchange Offer, subject to the withdrawal rights of
tendering holders of Notes, all Notes previously tendered pursuant to the
Exchange Offer will remain subject to the Exchange Offer.

The Exchange Date will be the first business day following the Expiration
Date. The Company expressly reserves the right (i) to terminate the Exchange
Offer and not accept for exchange any Notes if either of the events set forth
below under "Conditions to the Exchange Offer" shall have occurred and shall
not have been waived by the Company and (ii) to amend the terms of the Exchange
Offer in any manner which, in its good faith judgment, is advantageous to the
holders of the Notes, whether before or after any tender of the Notes. Unless
the Company terminates the Exchange Offer prior to 5:00 p.m., New York City
time, on the Expiration Date, the Company will exchange the Exchange Notes for
the Notes on the Exchange Date.

How to Tender

The tender to the Company of Notes by a beneficial holder thereof
constitutes an agreement between such holder and the Company in accordance with
the terms and subject to the conditions set forth herein and in the Letter of
Transmittal.

A holder of Notes may tender the same by (i) properly completing and
signing the Letter of Transmittal or a facsimile thereof (all references in
this Prospectus to the Letter of Transmittal shall be deemed to include a
facsimile thereof) and any required signature guarantees, and delivering the
same to the Exchange Agent at its address set forth on the back cover of this
Prospectus on or prior to the

<PAGE>

Expiration Date, (ii) complying with the procedure for book-entry transfer
described below or (iii) complying with the guaranteed delivery procedures
described below.

The signatures need not be guaranteed if tendered Notes are registered in
the name of the signer of the Letter of Transmittal and the Exchange Notes to
be issued in exchange therefor are to be issued (and any untendered Notes are
to be reissued) in the name of the registered holder. For the purposes
described herein, "registered holder" shall include any participant
("Participant") in The Depository Trust Company ("DTC"), a book-entry transfer
facility, whose name appears on a participant listing as the owner of the
Notes. In any other case, a tender of Notes must be accompanied by written
instruments of transfer in form satisfactory to the Company and duly executed
by the registered holder and the signature on the endorsement or instrument of
transfer must be guaranteed by a financial institution that is a member of a
registered national securities exchange or a member of the National Association
of Securities Dealers, Inc. or a commercial bank or trust company having an
office or correspondent in the United States (any of the foregoing hereinafter
referred to as an "Eligible Institution").

THE METHOD OF DELIVERY OF NOTES AND ALL OTHER DOCUMENTS IS AT THE ELECTION
AND RISK OF THE HOLDER. IF SENT BY MAIL, IT IS RECOMMENDED THAT REGISTERED
MAIL, RETURN RECEIPT REQUESTED, BE USED, PROPER INSURANCE OBTAINED, AND THE
MAILING BE MADE SUFFICIENTLY IN ADVANCE OF THE EXPIRATION DATE TO PERMIT
DELIVERY TO THE EXCHANGE AGENT ON OR BEFORE THE EXPIRATION DATE.

The Exchange Agent will make a request promptly after the date of this
Prospectus to establish accounts with respect to the Notes at DTC for the
purpose of facilitating the Exchange Offer, and subject to the establishment
thereof, any financial institution that is a Participant in DTC's system may
make book-entry delivery of Notes by causing DTC to transfer such Notes to the
Exchange Agent's account with respect to the Notes in accordance with DTC's
procedures for such transfer. See "Exchanging Book- Entry Notes," below.

If a holder desires to accept the Exchange Offer and time will not permit
a Letter of Transmittal to reach the Exchange Agent before the Expiration Date
or the procedure for book-entry transfer cannot be completed on a timely basis,
a tender may be effected if the Exchange Agent has received at its office
listed on the back cover hereof on or prior to the Expiration Date a letter,
telegram or facsimile transmission from an Eligible Institution setting forth
the name and address of the tendering holder, the names in which the Notes are
registered, and stating that the tender is being made thereby and guaranteeing
that within three New York Stock Exchange trading days after the date of
execution of such letter, telegram or facsimile transmission by the Eligible
Institution, a confirmation of book-entry transfer of such Notes into the
Exchange Agent's account at DTC, will be delivered by such Eligible Institution
together with a properly completed and duly executed Letter of Transmittal (and
any other required documents). Unless Notes being tendered by the above-
described method (and any other required documents are timely delivered) are
recorded by or deposited with the Exchange Agent within the time period set
forth above, the Company may, at its option, reject the tender. Copies of a
Notice of Guaranteed Delivery which may be used by Eligible Institutions for
the purposes described in this paragraph are available from the Exchange Agent.

<PAGE>

A tender will be deemed to have been received as of the date when the
Exchange Agent actually receives the tendering holder's properly completed and
duly signed Letter of Transmittal (or a facsimile thereof), together with (i)
the Note being tendered (if such Note is held in certificated form), properly
endorsed for transfer, or (ii) a confirmation of book-entry transfer of such
Notes into the Exchange Agent's account at DTC, or (iii) a Notice of Guaranteed
Delivery or letter, telegram or facsimile transmission to similar effect (as
provided above) from an Eligible Institution. Issuances of Exchange Notes in
exchange for Notes tendered pursuant to a Notice of Guaranteed Delivery or
letter, telegram or facsimile transmission to similar effect (as provided
above) by an Eligible Institution will be made only against deposit of the
Notes being tendered or confirmation of DTC's Automated Tender Offer Program
("ATOP") procedures set forth below. See "Exchanging Book-Entry Notes."

All questions as to the validity, form, eligibility (including time of
receipt) and acceptance for exchange of any tender of Notes will be determined
by the Company, whose determination will be final and binding. The Company
reserves the absolute right to reject any or all tenders not in proper form or
the acceptance for exchange of which may, in the opinion of the Company's
counsel, be unlawful. The Company also reserves the absolute right to waive
any of the conditions of the Exchange Offer or any defect or irregularity in
the tender of any Notes. None of the Company, the Exchange Agent or any other
person will be under any duty to give notification of any defects or
irregularities in tenders or incur any liability for failure to give any such
notification.

Exchanging Book-Entry Notes

The Exchange Agent and DTC have confirmed that any financial institution
that is a Participant may utilize ATOP to tender Exchange Notes.

The Exchange Agent will request that DTC establish an account with respect
to the Exchange Notes for purposes of the Exchange Offer within two business
days after the date of this Prospectus. Any Participant may make book-entry
delivery of Exchange Notes by causing DTC to transfer such Exchange Notes into
such Exchange Agent's account in accordance with DTC's ATOP procedures for
transfer. However, the exchange for the Exchange Notes so tendered will only
be made after timely confirmation (a "Book-Entry Confirmation") of such book-
entry transfer of Exchange Notes into the Exchange Agent's account, and timely
receipt by the Exchange Agent of an Agent's Message (as such term is defined in
the next sentence) and any other documents required by the Letter of
Transmittal. The term "Agent's Message" means a message, transmitted by DTC
and received by the Exchange Agent and forming part of a Book-Entry
Confirmation, that states that DTC has received an express acknowledgment from
a Participant tendering Notes that are the subject of such Book-Entry
Confirmation that such Participant has received and agrees to be bound by the
terms of the Letter of Transmittal, and that the Company may enforce such
agreement against such Participant.

Terms and Conditions of the Letter of Transmittal

The Letter of Transmittal contains, among other things, the following
terms and conditions, which are part of the Exchange Offer.

<PAGE>

The party tendering Notes for exchange (the "Transferor") exchanges,
assigns and transfers the Notes to the Company and irrevocably constitutes and
appoints the Exchange Agent as the Transferor's agent and attorney-in-fact to
cause the Notes to be assigned, transferred and exchanged. The Transferor
represents and warrants that it has full power and authority to tender,
exchange, assign and transfer its interest in the Notes and to acquire Exchange
Notes issuable upon exchange of such tendered Notes, and that, when the same
are accepted for exchange, the Company will acquire good and unencumbered title
to the tendered Notes, free and clear of all liens, restrictions, charges and
encumbrances and not subject to any adverse claim. The Transferor also
warrants that it will, upon request, execute and deliver any additional
documents deemed by the Company to be necessary or desirable to complete the
exchange, assignment and transfer of tendered Notes or transfer ownership of
such Notes on the account books maintained by DTC. All authority conferred by
the Transferor will survive the death or incapacity of the Transferor and every
obligation of the Transferor shall be binding upon the heirs, legal
representatives, successors and assigns of such Transferor.

The Transferor certifies that (i) the Exchange Notes acquired pursuant to
the Exchange Offer are being obtained in the ordinary course of business of the
person receiving such Exchange Notes, whether or not such person is such
Transferor, (ii) neither the Transferor nor any such other person has an
arrangement or understanding with any person to participate in the distribution
of such Exchange Notes, (iii) if the Transferor is not a broker-dealer, or is a
broker-dealer but will not receive Exchange Notes for its own account in
exchange for Notes, neither the Transferor nor any such other person is engaged
in or intends to participate in the distribution of such Exchange Notes and
(iv) neither the Transferor nor any such other person is an "affiliate" of the
Company within the meaning of Rule 405 under the Securities Act (or, if it is
an "affiliate," that it will comply with the applicable requirements of the
Securities Act). If the Transferor is a broker-dealer that will receive
Exchange Notes for its own account in exchange for Notes that were acquired as
a result of market-making activities or other trading activities, it will be
required to acknowledge that it will deliver a prospectus in connection with
any resale of such Exchange Notes.

Withdrawal Rights

Tenders of Notes pursuant to the Exchange Offer are irrevocable, except
that Notes tendered pursuant to the Exchange Offer may be withdrawn at any time
prior to the Expiration Date.

To be effective, a written, telegraphic, telex or facsimile transmission
notice of withdrawal must be timely received by the Exchange Agent at its
address set forth on the back cover of this Prospectus. Any such notice of
withdrawal must specify the person named in the Letter of Transmittal as having
tendered Notes to be withdrawn, the principal amount of Notes to be withdrawn,
a statement that such holder is withdrawing his election to have such Notes
exchanged, and the name of the registered holder of such Notes, and must be
signed by the holder in the same manner as the original signature on the Letter
of Transmittal (including any required signature guarantees) or be accompanied
by evidence satisfactory to the Company that the person withdrawing the tender
has succeeded to the beneficial ownership of the Notes being withdrawn. The
Exchange Agent will return the properly withdrawn Notes promptly following
receipt of notice of withdrawal. If Notes have been tendered pursuant to the
procedure for book-entry transfer, any notice of withdrawal must specify the
name and number of the account at DTC to

<PAGE>

be credited with the withdrawn Notes or otherwise comply with the appropriate
DTC withdrawal procedure. All questions as to the validity of notices of
withdrawals, including time of receipt, will be determined by the Company, and
such determination will be final and binding on all parties.

Acceptance of Notes for Exchange; Delivery of Exchange Notes

Upon the terms and subject to the conditions of the Exchange Offer, the
acceptance for exchange of Notes validly tendered and not withdrawn and the
issuance of the Exchange Notes will be made on the Exchange Date. For the
purposes of the Exchange Offer, the Company shall be deemed to have accepted
for exchange validly tendered Notes when, as and if the Company has given oral
or written notice thereof to the Exchange Agent.

The Exchange Agent will act as agent for the tendering holders of Notes
for the purposes of causing the Notes to be assigned, transferred and
exchanged. Upon the terms and subject to the conditions of the Exchange Offer,
delivery of Exchange Notes to be issued in exchange for accepted Notes will be
made by the Exchange Agent promptly after acceptance of the tendered Notes.
See "Description of the Exchange Notes - Book Entry Notes." Tendered Notes not
accepted for exchange by the Company will be returned without expense to the
tendering holders promptly following the Expiration Date or, if the Company
terminates the Exchange Offer prior to the Expiration Date, promptly after the
Exchange Offer is terminated.

Conditions to the Exchange Offer

Notwithstanding any other provision of the Exchange Offer, or any
extension of the Exchange Offer, the Company will not be required to issue
Exchange Notes in respect of any properly tendered Notes not previously
accepted and may terminate the Exchange Offer (by oral or written notice to the
Exchange Agent and by timely public announcement communicated, unless otherwise
required by applicable law or regulation, by issuing a press release to the Dow
Jones News Service), or at its option, modify or otherwise amend the Exchange
Offer, if either of the following events occur:

(a) any statute, rule or regulation shall have been enacted, or any
action shall have been taken by any court or governmental authority which,
in the sole judgment of the Company, would prohibit, restrict or otherwise
render illegal, consummation of the Exchange Offer, or

(b) there shall occur a change in the current interpretation by the
Staff of the Commission that the Exchange Notes issued pursuant to the
Exchange Offer in exchange for Notes may be offered for resale, resold and
otherwise transferred by holders thereof (other than broker-dealers and
any such holder that is an "affiliate" of the Company within the meaning
of Rule 405 under the Securities Act) without compliance with the
registration and prospectus delivery provisions of the Securities Act
provided that such Exchange Notes are acquired in the ordinary course of
such holders' business and such holders have no arrangements with any
person to participate in the distribution of such Exchange Notes.

<PAGE>

The Company expressly reserves the right to terminate the Exchange Offer
and not accept for exchange any Notes upon the occurrence of either of the
foregoing conditions (which represent all of the material conditions to the
acceptance by the Company of properly tendered Notes). In addition, the
Company may amend the Exchange Offer at any time prior to the Expiration Date
if either of the conditions set forth above occurs. Moreover, regardless of
whether either of such conditions has occurred, the Company may amend the
Exchange Offer in any manner which, in its good faith judgment, is advantageous
to holders of the Notes.

The foregoing conditions are for the sole benefit of the Company and may
be waived by the Company, in whole or in part, in its sole discretion. Any
determination made by the Company concerning an event, development or
circumstance described or referred to above will be final and binding on all
parties.

Exchange Agent

BNY has been appointed as the Exchange Agent for the Exchange Offer.
Letters of Transmittal must be addressed to the Exchange Agent at its address
set forth on the back cover page of this Prospectus. BNY also acts as the
Transfer Agent (the "Transfer Agent") and the trustee under the Indenture.

Delivery to an address other than as set forth herein, or transmissions of
instructions via a facsimile or telex number other than the ones set forth
herein, will not constitute a valid delivery.

Solicitation of Tenders; Expenses

The Company has not retained any dealer-manager or similar agent in
connection with the Exchange Offer and will not make any payments to brokers,
dealers or others for soliciting acceptance of the Exchange Offer. The Company
will, however, pay the Exchange Agent reasonable and customary fees for its
services and will reimburse it for reasonable out-of-pocket expenses in
connection therewith. The Company will also pay brokerage houses and other
custodians, nominees and fiduciaries the reasonable out-of-pocket expenses
incurred by them in forwarding copies of this Prospectus and related documents
to the beneficial owners of the Notes and in handling or forwarding tenders for
their customers.

No person has been authorized to give any information or to make any
representations in connection with the Exchange Offer other than those
contained in this Prospectus and, if given or made, such information or
representations should not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any exchange made
hereunder shall, under any circumstances, create any implication that there
has been no change in the affairs of the Company since the respective dates as
of which information is given herein. The Exchange Offer is not being made to
(nor will tenders be accepted from or on behalf of) holders of Notes in any
jurisdiction in which the making of the Exchange Offer or the acceptance
thereof would not be in compliance with the laws of such jurisdiction. The
Company may, however, at its discretion, take such action as it may deem
necessary to make the Exchange Offer in any such jurisdiction and extend the
Exchange Offer to holders of Notes in such

<PAGE>

jurisdiction. In any jurisdiction the securities laws or blue sky laws of
which require the Exchange Offer to be made by a licensed broker or dealer, the
Exchange Offer is being made on behalf of the Company by one or more registered
brokers or dealers that are licensed under the laws of such jurisdiction.

Other

Participation in the Exchange Offer is voluntary and holders should
carefully consider whether to accept. Holders of the Notes are urged to
consult their financial and tax advisors in making their own decisions on what
action to take.

As a result of the making of, and upon acceptance for exchange of all
validly tendered Notes pursuant to the terms of, this Exchange Offer, the
Company will have fulfilled a covenant contained in the terms of the Notes and
the Registration Rights Agreement. Holders of the Notes who do not tender
their Notes in the Exchange Offer will continue to beneficially hold such Notes
and will be entitled to all rights, and limitations applicable thereto, under
the Indenture, except for any such rights under the Registration Rights
Agreement, which by their terms terminate or cease to have further
effectiveness as a result of the making of this Exchange Offer. See
"Description of the Notes" and "Description of the Exchange Notes." All
untendered Notes will continue to be subject to the restrictions on transfer
set forth in the Notes and in the Indenture. To the extent that Notes are
tendered and accepted in the Exchange Offer, the trading market for untendered
Notes could be adversely affected.

The Company may in the future seek to acquire untendered Notes in the open
market or privately negotiated transactions, through subsequent offers or
otherwise. The Company has, however, no present plan to acquire any Notes that
are not tendered in the Exchange Offer or to file a registration statement to
permit resales of any Notes that are not tendered pursuant to the Exchange
Offer.

<PAGE>

CAPITALIZATION

The following table sets forth the capitalization of the Company at December
31, 1995 and as adjusted to give effect to (i) the issuance and sale after
December 31, 1995 and through the date hereof of an additional $650 million of
long-term debt of consolidated subsidiaries of the Company and the application
of the proceeds therefrom to the repayment of short-term borrowings and
investment banking and brokerage borrowings, (ii) the following transactions
related to the financing of the Company's April 1996 acquisition of ACSC and
SFIC: (a) the issuance and sale of $700 million of long-term debt, (b) the
issuance of $800 million of TAP-Obligated Mandatorily Redeemable Preferred
Securities of a Subsidiary Trust and (c) $695 million of short-term borrowings,
and (iii) the assumption of $35 million of debt of ACSC and SFIC, as if such
transactions had occurred on December 31, 1995.

<TABLE><CAPTION>
At December 31, 1995
------------------------------------

Outstanding As Adjusted
----------- -----------
(dollars in millions)
<S> <C> <C>
Debt:
Investment banking and brokerage borrowings . . $2,955 $2,705
Short-term borrowings . . . . . . . . . . . . . 1,468 1,763
Long-term debt . . . . . . . . . . . . . . . . . 9,190 10,575
------- -------
Total debt . . . . . . . . . . . . . . . . . . . $13,613 $15,043
------- -------

TAP-Obligaged Mandatorily Redeemable
Preferred Securities of Subsidiary Trusts . . . --- 800
------- -------

Stockholders' equity:
Preferred stock at aggregate liquidation value . 800 800
Common stock ($.01 par value; authorized
500,000,000 shares, issued - 368,171,649
shares outstanding and as adjusted)1. . . . . 4 4
Additional paid-in capital . . . . . . . . . . . 6,785 6,764
Retained earnings . . . . . . . . . . . . . . . 5,503 5,503
Treasury stock at cost (51,924,410 shares
outstanding and as adjusted) . . . . . . . . (1,835) (1,835)
Unrealized gain (loss) on investment securities
and other, net . . . . . . . . . . . . . . . 453 453
------- -------
Total stockholders' equity 11,710 11,689
------- -------
Total capitalization . . . . . . . . . . $25,323 $27,532
======= =======
</TABLE>

1 At the Company's 1996 Annual meeting of Stockholders, stockholders approved an
increase in the Company's authorized common stock from 500 million shares to
1.5 billion shares.

<PAGE>

SELECTED CONSOLIDATED FINANCIAL INFORMATION

The selected consolidated financial data presented below are derived
from the consolidated financial statements of the Company and its subsidiaries.
Such financial statements have been audited by KPMG Peat Marwick LLP,
independent certified public accountants, for each of the five years in the
period ended December 31, 1995. The consolidated financial statements as of
December 31, 1995 and 1994 and for each of the three years in the period
ended December 31, 1995 are incorporated by reference in this Prospectus,
and the information set forth below should be read in conjunction with
such consolidated financial statements and the notes thereto.

Income Statement Data:
Total revenues (2) $ 16,583 $ 14,943 $ 6,797 $ 5,125 $6,608
========= ======== ======= ======= ======

Net income per common share data:
Income from continuing operations $ 4.86 $ 3.34 $ 3.88 $ 3.34 $ 2.14
Discontinued operations 0.65 0.52 - - -
Cumulative effect of accounting changes - - (0.14) (0.12) -
-------- -------- ------- ------- ------
Net income $ 5.51 $ 3.86 $ 3.74 $ 3.22 $ 2.14
========= ======== ======= ======= ======

Cash dividends per common share $ 0.800 $ 0.575 $ 0.490 $0.363 $ 0.225
========= ======== ======= ======= ======

At December 31, (1)
------------------------------------------------
Balance Sheet Data:
Total assets $114,475 $115,297 $101,290 $24,151 $21,561
Long-term debt $ 9,190 $ 7,075 $ 6,991 $ 3,951 $ 4,327
Stockholders' equity (4) $ 11,710 $ 8,640 $ 9,326 $ 4,229 $ 3,280

Book value per common share $ 34.50 $ 24.77 $ 26.06 $ 17.70 $ 15.10
Book value per common share, excluding
FAS 115 adjustment $ 32.11 $ 28.94
</TABLE>

(1) Results of operations prior to 1994 exclude the amounts of
TIGI, except that results for 1993 include the Company's equity
in earnings relating to the 27% interest purchased in December
1992. Results of operations include amounts related to the Shearson
Businesses from July 31, 1993, the date of acquisition. Data
relating to financial position for the years prior to 1993 exclude
amounts for TIGI and the Shearson Businesses.

(2) Revenues for 1991 include those of Fingerhut Companies, Inc.,
which had been carried as a consolidated subsidiary.

(4) Stockholders' equity at December 31, 1995 and 1994 reflects $756
million of net unrealized gains on investment securities and $1.3
billion of net unrealized losses on investment securities,
respectively, pursuant to the adoption of FAS No. 115, "Accounting
for Certain Investments in Debt and Equity Securities" in 1994.

27
<PAGE>

RATIO OF EARNINGS TO FIXED CHARGES

Year Ended December 31,
-----------------------------------------
1995 1994 1993 1992(1) 1991
---- ---- ---- ---- ----

Ratio of earnings
to fixed charges 2.22 2.32 2.79 2.63 1.85

- ----------------------
(1) Included in earnings from continuing operations before income taxes (used in
this computation) is a net gain of $216.8 million from the sale of the
Company's ownership interests in Margaretten & Company, Inc., Fingerhut
Companies, Inc. and other affiliated companies. Without giving effect to
this net gain, the ratio of earnings to fixed charges for 1992 would have
been 2.33.

The ratio of earnings to fixed charges has been computed by dividing
earnings from continuing operations before income taxes and fixed charges by
the fixed charges. For purposes of these ratios, fixed charges consist of
interest expense and that portion of rentals deemed representative of the
appropriate interest factor.

DESCRIPTION OF THE EXCHANGE NOTES

The Exchange Notes will be issued under an Indenture dated as of March 15,
1987, between Primerica Corporation, a New Jersey corporation ("old Primerica")
and BNY, as trustee (the "Trustee"), as supplemented by the First Supplemental
Indenture dated as of December 15, 1988, among old Primerica, Primerica
Holdings Inc. ("Primerica Holdings"), and the Trustee, the Second Supplemental
Indenture dated as of January 31, 1991, between Primerica Holdings and the
Trustee, and the Third Supplemental Indenture dated December 9, 1992, among
Primerica Holdings, the Company (formerly known as Primerica Corporation)
and the Trustee (the indenture as so supplemented is hereinafter referred
to as the "Indenture").

The following descriptions of the terms of the Exchange Notes and of the
Indenture do not purport to be complete and are subject to, and qualified in
their entirety by reference to, the Indenture, a copy of which has been
incorporated by reference or filed as an exhibit to the Registration Statement.
Capitalized terms used and not otherwise defined in this section shall have the
meanings assigned to them in the Indenture. Parenthetical section references
refer to sections of the Indenture.

<PAGE>

General

The Exchange Notes will be limited to $100,000,000 in aggregate principal
amount and will bear interest from the last Interest Payment Date on which
interest was paid on the Notes surrendered in the Exchange Offer or, if no
interest has been paid on such Notes, from December 1, 1995. The Exchange
Notes will mature on December 1, 2025. Interest will be payable semiannually
on June 1 and December 1 (the "Interest Payment Dates"), commencing on the
later to occur of June 1, 1996 and the first Interest Payment Date following
the closing of the Exchange Offer, to the persons in whose names the Exchange
Notes are registered at the close of business on the May 15 and November 15,
respectively, preceding the payment date, at the annual rate of 7%. The
Exchange Notes will not be redeemable prior to maturity and will not be subject
to any sinking fund requirement. Initially, the Exchange Notes will be issued
in the form of one or more global notes (each, a "Book-Entry Note") registered
in the name of DTC or its nominee. See "Book-Entry Notes" below.

The Exchange Notes will be unsecured general obligations of the Company.
As a holding company, the Company's sources of funds are derived principally
from advances and dividends from subsidiaries, certain of which are subject to
regulatory restrictions, and from sales of assets and investments. The
Indenture provides that unsecured debt securities of the Company, without
limitation as to aggregate principal amount, may be issued in one or more
series, and a single series may be issued at various times, with different
maturity dates and different interest rates, in each case as authorized from
time to time by the Company. The provisions of the Indenture provide the
Company with the ability, in addition to the ability to issue securities with
terms different from those of securities previously issued, to "reopen" a
previous issue of a series of securities and to issue additional securities of
such series.

Any certificated Exchange Notes may be presented for exchange, and may be
presented for registration of transfer at the principal corporate trust office
of the Trustee in The City of New York. No service charge will be made for any
registration of transfer or exchange of Exchange Notes, but the Company may
require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. Any certificated Exchange Notes
presented for registration of transfer or exchange shall (if so required by the
Company or the Trustee) be duly endorsed by, or accompanied by a written
instrument or instruments of transfer (in form satisfactory to the Company and
the Trustee) duly executed by, the registered holder or his attorney duly
authorized in writing. The Exchange Notes offered hereby will be issued in
denominations of $1,000 and integral multiples thereof.

Book-Entry Notes

The Exchange Notes will initially be issued in the form of one or more
Book-Entry Notes, which will be deposited with, or on behalf of, DTC and
registered in the name of DTC or its nominee. Except as set forth below, Book-
Entry Notes may not be transferred except as a whole by DTC to a nominee of
DTC, or by a nominee of DTC to DTC or another nominee of DTC, or by DTC or any
nominee to a successor of DTC, or a nominee of such successor.

<PAGE>

DTC has advised the Company that it is a limited-purpose trust company
organized under the New York Banking Law, a "banking organization" within the
meaning of the New York Banking Law, a member of the Federal Reserve System,
a "clearing corporation" within the meaning of the New York Uniform Commercial
Code and a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act. DTC was created to hold securities for Participants
and to facilitate the clearance and settlement of securities transactions among
its Participants in such securities through electronic book-entry changes in
accounts of the Participants, thereby eliminating the need for physical movement
of certificates. DTC's Participants include securities brokers and dealers,
banks, trust companies, clearing corporations and certain other organizations,
some of which (and/or their representatives) own DTC. Access to the DTC system
is also available to others, such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a Participant,
either directly or indirectly. Persons who are not Participants may
beneficially own interest in securities held by DTC only through Participants.

Upon the issuance by the Company of a Book-Entry Note, DTC will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the Exchange Notes represented by such Book-Entry Note to the
accounts of Participants. Ownership of beneficial interests in a Book-Entry
Note will be limited to Participants or persons that may hold interests through
Participants. Ownership of beneficial interests in Book-Entry Notes will be
shown on, and the transfer of such interests will be effected only through,
records maintained by DTC or its nominee (with respect to beneficial interests
of Participants), or by Participants or persons that may hold interests through
Participants (with respect to beneficial interests of beneficial ownership).
The laws of some states may require that certain purchasers of securities take
physical delivery of such securities in certificated form. Such limits and
such law may impair the ability to transfer beneficial interests in Book-Entry
Notes.

So long as DTC or its nominee is the registered owner of the Book-Entry
Notes, DTC or its nominee, as the case may be, will be considered the sole
owner or holder of the Exchange Notes represented by such Book-Entry Notes for
all purposes under the Indenture. Except as provided below, owners of
beneficial interests in Book-Entry Notes will not be entitled to have Exchange
Notes represented by such Book-Entry Notes registered in their names, will not
receive or be entitled to receive physical delivery of such Exchange Notes in
certificated form and will not be considered the owners or holders thereof
under the Indenture.

Principal and interest payments on the Exchange Notes represented by one
or more Book-Entry Notes will be made by the Company to DTC or its nominee, as
the case may be, as the registered owner of the related Book-Entry Note or
Notes. The Company expects that DTC or its nominee, upon receipt of any
payment of principal or interest in respect of Book-Entry Notes, will credit
immediately the accounts of the related Participants with payment in amounts
proportionate to their respective holdings in principal amount of beneficial
interests in such Book-Entry Notes as shown on the records of DTC. Neither the
Company nor the Trustee or any Paying Agent will have any responsibility or
liability for any aspect of the records relating to or payments made on account
of beneficial ownership interests of Book-Entry Notes, or for maintaining,
supervising or reviewing any records relating to such beneficial interests.
The Company also expects that payments by Participants to owners of beneficial
interests in Book-Entry Notes held through such Participants will be governed
by standing customer instructions and customary

<PAGE>

practices, as is now the case with securities registered in "street name."
Such payments will be the responsibility of such Participants.

If DTC is at any time unwilling, unable or ineligible to continue as
depositary and a successor depositary is not appointed by the Company within 90
days, the Company will issue Exchange Notes in certificated form in exchange
for beneficial interests in the Book-Entry Notes. In addition, the Company may
at any time determine not to have its Exchange Notes represented by one or more
Book-Entry Notes, and, in such event, will issue Exchange Notes in certificated
form in exchange for beneficial interests in Book-Entry Notes. In any such
instance, an owner of a beneficial interest in a Book-Entry Note will be
entitled to physical delivery in certificated form of Exchange Notes equal in
principal amount to such beneficial interests and to have such Exchange Notes
registered in its name. Exchange Notes so issued in certificated form will be
issued in denominations of $1,000 or any amount in excess thereof that is an
integral multiple of $1,000 and will be issued in registered form only, without
coupons.

Same-Day Settlement and Payment

All payments of principal and interest on Exchange Notes represented by
Book-Entry Notes will be made by the Company in immediately available funds.

Secondary trading in long-term notes and debentures of corporate issuers
is generally settled in clearing-house or next-day funds. In contrast, the
Exchange Notes are expected to trade in the Same-Day Funds Settlement System of
DTC, and, to the extent that secondary market trading activity in the Exchange
Notes is effected through the facilities of DTC, such trades will be settled in
immediately available funds. No assurance can be given as to the effect, if
any, of settlement in immediately available funds on trading activity in the
Exchange Notes.

Payments of Principal and Interest

Principal of and interest on the Notes will be payable at the office or
agency of the Company to be maintained in the Borough of Manhattan, The City of
New York, initially at the principal corporate trust office of the Trustee, 101
Barclay Street, Corporate Trust Services Window, Lobby Level, New York, New
York; provided, however, that at the option of the Company, payment of interest
may be made by check mailed to the address of the person entitled thereto as
such address shall appear in the register of holders of Notes. Notwithstanding
the foregoing, payments of principal and interest on Book-Entry Notes will be
made as described above.

Redemption

The Exchange Notes offered hereby are not redeemable by the Company at any
time prior to maturity and are not subject to any sinking fund or other
analogous provision.

<PAGE>

Summary of Certain Provisions of the Indenture

Payment and Paying Agents. Payment of principal of and premium, if any,
on the Exchange Notes will be made in United States dollars against surrender
of such Exchange Note at the principal corporate trust office of the Trustee in
The City of New York. Payment of any installment of interest on the Exchange
Notes will be made to the person in whose name such Exchange Note is registered
at the close of business on the Record Date for such interest payment.
Payments of such interest will be made at the principal corporate trust office
of the Trustee in The City of New York, or by a check mailed to the holder at
such holder's registered address (Sections 2.01 and 5.02). Notwithstanding the
foregoing, payments of principal and interest on Book-Entry Notes will be made
as described above.

Limitations on Liens. The Company has agreed that it will not, and will
not permit any Subsidiary to, incur, issue, assume or guarantee any
indebtedness for money borrowed if such indebtedness is secured by a pledge of,
lien on, or security interest in any shares of Voting Stock of any Significant
Subsidiary, whether such Voting Stock is now owned or is hereafter acquired,
without providing that each series of Securities issued under the Indenture
(together with, if the Company shall so determine, any other indebtedness or
obligations of the Company or any Subsidiary ranking equally with such
Securities and then existing or thereafter created) shall be secured equally
and ratably with such indebtedness. The foregoing limitation shall not apply
to indebtedness secured by a pledge of, lien on or security interest in any
shares of Voting Stock of any corporation at the time it becomes a Significant
Subsidiary (Section 5.04).

Limitations on Mergers and Sales of Assets. The Company has agreed that
it will not enter into a merger or consolidation with another corporation or
sell other than for cash or lease all or substantially all its assets to
another corporation, or purchase all or substantially all the assets of another
corporation unless (i) either the Company is the continuing corporation, or the
successor corporation (if other than the Company) expressly assumes by
supplemental indenture the obligations evidenced by the securities issued
pursuant to the Indenture (in which case, except in the case of such a lease,
the Company will be discharged therefrom) and (ii) immediately thereafter, the
Company or the successor corporation (if other than the Company) would not be
in default in the performance of any covenant or condition of the Indenture
(Sections 5.05 and 14.01).

Certain Definitions. The term "Significant Subsidiary" means a
Subsidiary, including its Subsidiaries, which meets any of the following
conditions: (i) the Company's and its other Subsidiaries' investments in and
advances to the Subsidiary exceed 10 percent of the total assets of the Company
and its Subsidiaries consolidated as of the end of the most recently completed
fiscal year; (ii) the Company's and its other Subsidiaries' proportionate share
of the total assets (after intercompany eliminations) of the Subsidiary exceeds
10 percent of the total assets of the Company and its Subsidiaries consolidated
as of the end of the most recently completed fiscal year; or (iii) the
Company's and its other Subsidiaries' equity in the income from continuing
operations before income taxes, extraordinary items and cumulative effect of a
change in accounting principles of the Subsidiary exceeds 10 percent of such
income of the Company and its Subsidiaries consolidated for the most recently
completed fiscal year. The term "Subsidiary" means any corporation of which
securities (excluding securities entitled to vote for directors only by reason
of the happening of a contingency) entitled to elect at least a majority of the
corporation's directors

<PAGE>

shall at the time be owned, directly or indirectly, by the Company, or one or
more Subsidiaries, or by the Company and one or more Subsidiaries. The term
"Voting Stock" means capital stock the holders of which have general voting
power under ordinary circumstances to elect at least a majority of the board of
directors of a corporation, provided that, for the purposes of such definition,
capital stock which carries only the right to vote conditioned on the happening
of an event shall not be considered voting stock whether or not such event
shall have happened (Sections 1.02 and 5.04).

Modification of the Indenture. The Indenture contains provisions
permitting the Company and the Trustee, without the consent of the holders of
the Securities, to establish, among other things, the form and terms of any
series of the Securities issuable thereunder by one or more supplemental
indentures, and, with the consent of the holders of not less than 66 2/3% in
aggregate principal amount of the Securities at the time outstanding which are
affected thereby, to modify the Indenture or any supplemental indenture or the
rights of the holders of the Securities of such series to be affected, provided
that no such modification will (i) extend the fixed maturity of any Securities,
reduce the rate or extend the time of payment of interest thereon, reduce the
principal amount thereof or the premium, if any, thereon, reduce the amount of
the principal of Original Issue Discount Securities payable on any date, change
the currency in which the Securities are payable, or impair the right to
institute suit for the enforcement of any such payment on or after the maturity
thereof, without the consent of the holder of each Security so affected, or
(ii) reduce the aforesaid percentage of Securities of any series the consent of
the holders of which is required for any such modification without the consent
of the holders of all Securities of such series then outstanding, or (iii)
modify, without the written consent of the Trustee, the rights, duties or
immunities of the Trustee (Sections 13.01 and 13.02).

Defaults. The Indenture provides that events of default with respect to
any series of Securities will be (i) default for 30 days in payment of interest
upon any Security of such series; (ii) default in payment of principal (other
than a sinking fund installment) or premium, if any, on any Security of such
series; (iii) default for 30 days in payment of any sinking fund installment
when due by the terms of the Securities of such series; (iv) default, for 90
days after notice, in performance of any other covenant in the Indenture (other
than a covenant included in the Indenture solely for the benefit of a series of
Securities other than such series); and (v) certain events of bankruptcy or
insolvency (Section 6.01). If an event of default with respect to Securities
of any series should occur and be continuing, either the Trustee or the holders
of 25% in the principal amount of outstanding Securities of such series may
declare each Security of that series due and payable (Section 6.02). The
Company is required to file annually with the Trustee a statement of an officer
as to the fulfillment by the Company of its obligations under the Indenture
during the preceding year (Section 5.06).

No event of default with respect to a single series of Securities issued
under the Indenture (and any supplemental indenture) necessarily constitutes an
event of default with respect to any other series of Securities (Section 6.02).

Holders of a majority in principal amount of the outstanding Securities of
any series will be entitled to control certain actions of the Trustee under the
Indenture and to waive certain past defaults with respect to such series
(Sections 6.02 and 6.06). Subject to the provisions of the Indenture relating
to the duties of the Trustee, the Trustee will not be under any obligation to
exercise any of the rights or powers

<PAGE>

vested in it by the Indenture at the request, order or direction of any of the
holders of Securities, unless one or more of such holders of Securities shall
have offered to the Trustee reasonable security or indemnity (Section 10.01).

If an event of default occurs and is continuing with respect to a series
of Securities, any sums held or received by the Trustee under the Indenture may
be applied to reimburse the Trustee for its reasonable compensation and
expenses incurred prior to any payments to holders of Securities of such series
(Section 6.05).

The right of any holder of any series of Securities to institute action
for any remedy (except such holder's right to enforce payment of the principal
of, premium, if any, and interest on such holder's Security when due) will be
subject to certain conditions precedent, including a request to the Trustee by
the holders of not less than 25% in principal amount of the Securities of that
series outstanding to take action, and an offer satisfactory to the Trustee of
security and indemnity against liabilities incurred by it in so doing (Section
6.07).

Defeasance. The following provisions of the Indenture are applicable to
the Exchange Notes. The Company (a) will be deemed to have paid and discharged
the entire indebtedness on all outstanding Exchange Notes ("defeasance and
discharge") or (b) will cease to be under any obligation (other than to pay
when due the principal of, premium, if any, and interest on the Exchange Notes)
with respect to the Notes ("covenant defeasance"), at any time prior to
Maturity, when the Company has deposited with the Trustee, in trust for the
benefit of the holders (i) funds sufficient to pay all sums due for principal
of, premium, if any, and interest on the Exchange Notes as they shall become
due from time to time, or (ii) such amount of direct obligations of, or
obligations the payment of which is unconditionally guaranteed by the full
faith and credit of, the United States of America, as will or will together
with the income thereon without consideration of any reinvestment thereof be
sufficient to pay all sums due for principal of, premium, if any, and interest
on the Exchange Notes as they shall become due from time to time. In addition
to the foregoing, covenant defeasance with respect to the Exchange Notes, but
not defeasance and discharge, is conditioned upon the Company's delivery to the
Trustee of an opinion of counsel to the effect that the holders of the Exchange
Notes will have no Federal income tax consequences as a result of such deposit.
Upon defeasance and discharge, the Indenture will cease to be of further effect
with respect to the Exchange Notes and the holders of Exchange Notes shall look
only to the deposited funds or obligations for payment. Upon covenant
defeasance, however, the Company will not be relieved of its obligation to pay
when due principal of, premium, if any, and interest on the Exchange Notes if
not otherwise paid from such deposited funds or obligations. Notwithstanding
the foregoing, certain obligations and rights under the Indenture with respect
to compensation, reimbursement and indemnification of the Trustee, optional
redemption, mandatory and optional sinking fund payments, if any, registration
of transfer and exchange of the Exchange Notes, replacement of mutilated,
destroyed, lost or stolen Exchange Notes and certain other administrative
provisions will survive defeasance and discharge and covenant defeasance
(Sections 11.03 and 11.04).

Under current Federal income tax law, there is a substantial risk that the
defeasance and discharge contemplated in the preceding paragraph could be
treated as a taxable exchange of the Exchange Notes for an interest in the
trust. As a consequence, each holder of the Exchange Notes would recognize
gain or

<PAGE>

loss equal to the difference between the value of the holder's interest in the
trust and the holder's tax basis for the securities deemed exchanged.
Thereafter, each holder would be required to include in income his share of
any income, gain and loss recognized by the trust. Although a holder could
be subject to Federal income tax on the deemed exchange of the defeased
Exchange Notes for an interest in the trust, such holder would not receive
any cash until the maturity of such Exchange Notes. Prospective investors
are urged to consult their own tax advisors as to the specific consequences
of a defeasance and discharge, including the applicability and effect of tax
laws other than the Federal income tax law.

Concerning the Trustee. BNY (the Exchange Agent for the Exchange Offer)
is the Trustee under the Indenture. The Company has and may from time to time
in the future have banking relationships with the Trustee in the ordinary
course of business.

DESCRIPTION OF NOTES

The terms of the Notes are substantially identical in all respects
(including principal amount, interest rate and maturity) to the terms of the
Exchange Notes for which they may be exchanged pursuant to this Exchange Offer,
except that the Notes are not freely transferable by holders thereof and were
issued subject to certain covenants regarding registration as provided therein
and in the Registration Rights Agreement (which covenants will terminate and be
of no further force or effect upon completion of this Exchange Offer). See
"Registration Rights Agreement."

REGISTRATION RIGHTS AGREEMENT

Pursuant to the Registration Rights Agreement among the Company and Smith
Barney Inc., Bear, Stearns & Co. Inc., CS First Boston Corporation, Lehman
Brothers Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan
Securities Inc., Morgan Stanley & Co. Incorporated, and Salomon Brothers Inc
(the "Initial Purchasers"), the Company agreed to file with the Commission and
use all reasonable efforts to cause to become effective a registration
statement (the "Exchange Offer Registration Statement") with respect to an
issue of notes identical in all material respects to, and entitled to
substantially the same benefits as, the Notes and, upon becoming effective, to
offer the holders of the Notes the opportunity to exchange their Notes for such
notes. The Company therefore is conducting the Exchange Offer. Under existing
Commission interpretations, the Exchange Notes would in general be freely
transferable after the Exchange Offer without further registration under the
Securities Act. If, due to a change in current interpretations by the
Commission, the Company would not be permitted to effect such Exchange Offer,
the Registration Rights Agreement provides that the Company would instead be
required to file a registration statement covering resales by the holders of
Notes (a "Shelf Registration Statement") and would use all reasonable efforts
to cause such Shelf Registration Statement to become effective and to keep
such Shelf Registration Statement effective for three years from the effective
date thereof. The Company shall, in the event of a shelf registration, provide
to each holder of the Notes copies of the prospectus and notify each such
holder when the Shelf Registration Statement has become effective. A holder
that sells Notes pursuant to a Shelf Registration Statement generally would be
required to be named as a selling security holder in the related prospectus, to
deliver a current prospectus to purchasers, and to indemnify the Company
against liabilities arising from misstatements or omissions

<PAGE>

relating to such holder contained in any such prospectus and would be subject
to certain of the civil liability provisions under the Securities Act in
connection with such sales.

Under the Registration Rights Agreement, the Company has agreed to use all
reasonable efforts to: (i) file the Exchange Offer Registration Statement or a
Shelf Registration Statement with the Commission as promptly as reasonably
practicable, (ii) have such Exchange Offer Registration Statement or a Shelf
Registration Statement declared effective by the Commission, and (iii) commence
the Exchange Offer and issue the Exchange Notes in exchange for all Notes
validly tendered in accordance with the terms of the Exchange Offer prior to
the close of the Exchange Offer, or, in the alternative, cause such Shelf
Registration Statement to remain effective for three years from the effective
date thereof.

If the Company fails to comply with the above provisions, additional
interest (the "Penalty Interest") shall be assessed on the Notes as follows:

(i) If an Exchange Offer Registration Statement or Shelf Registration
Statement is not filed within 60 days following December 8, 1995, the date
on which the Company delivered the Notes to the Initial Purchasers (the
"Closing Date"), then commencing on the 61st day after the Closing Date,
Penalty Interest shall be accrued on the Notes over and above the accrued
interest at a rate of .50% per annum for the first 90 days immediately
following the 60th day after the Closing Date, such Penalty Interest rate
increasing by an additional .25% per annum at the beginning of each
subsequent 90-day period.

(ii) If an Exchange Offer Registration Statement or Shelf Registration
Statement is filed pursuant to (i) above and is not declared effective
within 150 days following the Closing Date, then commencing on the 151st
day after the Closing Date, Penalty Interest shall be accrued on the Notes
over and above the accrued interest at a rate of .50% per annum for the
first 90 days immediately following the 150th day after the Closing Date,
such Penalty Interest rate increasing by an additional .25% per annum at
the beginning of each subsequent 90-day period; and

(iii) If either (A) the Company has not exchanged Exchange Notes for all
Notes validly tendered in accordance with the terms of the Exchange Offer
on or prior to 35 days after the date on which the Exchange Offer
Registration Statement was declared effective, or (B) if applicable, the
Shelf Registration Statement has been declared effective and such Shelf
Registration Statement ceases to be effective prior to three years from
its original effective date, then Penalty Interest shall be accrued on the
Notes over and above the accrued interest at a rate of .50% per annum for
the first 90 days immediately following (x) the 35th day after such
effective date, in the case of (A) above, or (y) the day such Shelf
Registration Statement ceases to be effective in the case of (B) above,
such Penalty Interest rate increasing by an additional .25% per annum at
the beginning of each subsequent 90-day period;

provided, however, the Penalty Interest rate on the Notes may not exceed 1.0%
per annum; and, provided, further, that (1) upon the filing of the Exchange
Offer Registration Statement or a Shelf Registration Statement (in the case of
(i) above), (2) upon the effectiveness of the Exchange Offer Registration
Statement or a Shelf Registration Statement (in the case of (ii) above), or (3)
upon the

<PAGE>

exchange of Exchange Notes for all Notes tendered or upon the effectiveness of
the Shelf Registration Statement which had ceased to remain effective prior to
three years from its original effective date (in the case of (iii) above),
Penalty Interest on the Notes as a result of such clause (i), (ii) or (iii)
shall cease to accrue. The interest rate applicable to the Notes, inclusive of
Penalty Interest, shall in no event exceed
8%. The Exchange Offer Registration Statement was filed within the applicable
time period.

Any amounts of Penalty Interest due pursuant to clauses (i), (ii) or (iii)
above will be payable in cash, on the same interest payment dates of the Notes.
The amount of Penalty Interest will be determined by multiplying the applicable
Penalty Interest rate by the principal amount of the Notes, multiplied by a
fraction, the numerator of which is the number of days such Penalty Interest
rate was applicable during such period (determined on the basis of a 360-day
year consisting of twelve 30-day months), and the denominator of which is 360.

Under the Registration Rights Agreement, the Company is entitled to close
the Exchange Offer provided that it has accepted all Notes theretofore validly
tendered in accordance with the terms of the Exchange Offer. Notes not
tendered in the Exchange Offer shall bear interest at the same rates as in
effect at the time of issuance of the Notes.

CERTAIN FEDERAL INCOME TAX CONSIDERATIONS

The following summary describes certain United States federal income tax
consequences to holders resulting from the exchange of the Notes for the
Exchange Notes pursuant to the Exchange Offer and the ownership and disposition
of the Exchange Notes. This summary is based on the Internal Revenue Code of
1986, as amended (the "Code"), Treasury regulations (including proposed and
temporary regulations) promulgated thereunder, rulings, official pronouncements
and judicial decisions, all as in effect on the date hereof and all of which
are subject to change, possibly with retroactive or different interpretations.
This summary addresses only the Notes and the Exchange Notes that are held as
capital assets. Moreover, it does not discuss all of the tax consequences that
may be relevant to the particular circumstances of a holder or to holders
subject to special rules, such as certain financial institutions, insurance
companies, dealers in securities and tax-exempt organizations. Holders
acquiring the Exchange Notes should consult their tax advisors with regard to
the application of the United States federal income tax laws to their
particular situations as well as any tax consequences arising under the laws of
any state, local or foreign taxing jurisdiction.

Exchange of Notes

The exchange of the Notes for the Exchange Notes pursuant to the Exchange
Offer should not be a taxable event to the holder, and the holder should not
recognize any taxable gain or loss as a result of the exchange. Accordingly, a
holder's adjusted tax basis in the Exchange Notes should be the same as his
adjusted tax basis in the Notes exchanged therefor, and his holding period for
the Notes will be included in his holding period for the Exchange Notes. In
addition, to the extent that a holder acquired the Notes at a "market discount"
or with "amortizable bond premium," such discount or premium should generally
carry over to the Exchange Notes received in exchange for the Notes. Such
holders should consult their

<PAGE>

tax advisors regarding the United States federal income tax treatment of such
market discount and amortizable bond premium.

Interest paid on an Exchange Note will generally be taxable to a holder as
ordinary interest income in accordance with such holder's method of accounting
for United States federal income tax purposes.

Upon the sale, exchange or retirement of an Exchange Note, a holder will
generally recognize taxable gain or loss equal to the difference between the
amount realized on the sale, exchange or retirement (except to the extent such
amount is attributable to accrued interest, which is taxable as ordinary
interest income) and such holder's adjusted tax basis in such Exchange Note. A
holder's adjusted tax basis in an Exchange Note generally will equal the cost
of the Exchange Note to such holder. Such gain or loss will be capital gain or
loss and will be long-term capital or loss if the holder's holding period in
the Exchange Note is more than one year at the time of disposition.

Backup Withholding and Information Reporting on Exchange Notes

Certain noncorporate holders generally will be subject to information
reporting and may be subject to backup withholding at a rate of 31% on payments
of principal, premium, if any, and interest on, and the proceeds of disposition
of, an Exchange Note. Backup withholding will apply only if the holder (a)
fails to furnish its Taxpayer Identification Number ("TIN") which, for an
individual, would be the holder's Social Security number, (b) furnishes an
incorrect TIN, (c) is notified by the Internal Revenue Service that it has
failed to properly report payments of interest and dividends or (d) under
certain circumstances, fails to certify, under penalty of perjury, that it has
furnished a correct TIN and has not been notified by the Internal Revenue
Service that it is subject to backup withholding for failure to report interest
and dividend payments. Holders should consult their tax advisors regarding
their qualification for exemption from backup withholding and the procedure for
obtaining such an exemption if applicable.

The amount of any backup withholding from a payment to a holder will be
allowed as a credit against such holder's United States federal income tax
liability and may entitle such holder to a refund, provided that the required
information is furnished to the Internal Revenue Service.

PLAN OF DISTRIBUTION

Based on a no-action letter issued by the staff of the Commission to a
third party, the Company believes that any broker-dealer who holds Notes
acquired for its own account as a result of market-making activities or other
trading activities, and who receives Exchange Notes in exchange for such Notes
pursuant to the Exchange Offer, may be deemed to be a statutory underwriter
and, in connection with any resale of such Exchange Notes, may be obligated to
deliver a prospectus meeting the requirements of the Securities Act. Each
broker-dealer, including Smith Barney, that receives Exchange Notes for
its own account pursuant to the Exchange Offer must acknowledge that it will
deliver a prospectus in connection with resales of such Exchange Notes.
Accordingly, this Prospectus also may be used after the Expiration Date by
broker-dealers, other than Smith Barney, in connection with resales of Exchange
Notes that they receive in exchange for Notes acquired for their own account as
a result of market-making activities or other trading activities, to the extent
that a Prospectus is required to be delivered for that reason. The Company has
agreed that, for a period of 90

<PAGE>

days after the Expiration Date, it will make this Prospectus available to any
such broker-dealer for use in connection with any such resale. See
"Participation by Smith Inc."

The Company will not receive any proceeds from any sales of the Exchange
Notes by broker-dealers. Exchange Notes received by broker-dealers for their
own account pursuant to the Exchange Offer may be sold from time to time in
negotiated transactions at market prices prevailing at the time of resale, at
prices related to such prevailing market prices or at negotiated prices. Any
such resale may be made directly to purchasers or to or through brokers or
dealers who may receive compensation in the form of commissions or concessions
from any such broker-dealer and/or the purchasers of any such Exchange Notes.
Any broker-dealer that resells the Exchange Notes that were received by it for
its own account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"underwriter" within the meaning of the Securities Act and any profit on any
such resale of the Exchange Notes and any commissions or concessions received
by any such persons may be deemed to be underwriting compensation under the
Securities Act. The Letter of Transmittal states that by acknowledging that it
will deliver and by delivering a prospectus, a broker-dealer will not be deemed
to admit that it is an "underwriter" within the meaning of the Securities Act.

For a period of 90 days after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal.

By acceptance of this Exchange Offer, each broker-dealer that receives
Exchange Notes pursuant to the Exchange Offer agrees that, upon receipt of
notice from the Company of the happening of any event which makes any statement
in the Prospectus untrue in any material respect or which requires the making
of any changes in the Prospectus in order to make the statements therein not
misleading (which notice the Company agrees to deliver promptly to such broker-
dealer), such broker-dealer will suspend use of the Prospectus until the
Company has amended or supplemented the Prospectus to correct such misstatement
or omission and, if necessary, has furnished copies of the amended or
supplemented Prospectus to such broker-dealer. If the Company shall give any
such notice to suspend the use of the Prospectus, it shall extend the 90-day
period referred to above by the number of days during the period from and
including the date of the giving of such notice to and including the date when
broker-dealers shall have received copies of the supplemented or amended
Prospectus necessary to permit resales of the Exchange Notes.

Smith Barney Inc., an indirect subsidiary of the Company ("Smith
Barney"), has indicated to the Company that it intends to effect offers and
sales of the Exchange Notes after the Expiration Date in market-making
transactions at negotiated prices related to prevailing market prices at the
time of sale. Smith Barney may act as principal or agent in such transactions.
Smith Barney has no obligation to make a market in the Exchange Notes and may
discontinue its market-making activities at any time without notice, at its
sole discretion.

PARTICIPATION BY SMITH BARNEY INC.

As a result of its market-making activities in the Notes, Smith Barney
currently holds Notes which it intends to exchange for Exchange Notes in the
Exchange Offer. None of the Notes held by Smith Barney were purchased by it from
the Company in connection with the initial distribution of the Notes. Smith
Barney's participation in the Exchange Offer will not be in reliance on the
Commission's position set forth in the no-action letters described in "The
Exchange Offer-Terms of Exchange" and "Plan of Distribution." The Company,
which meets the requirements for use of Form S-3 under Instruction I(B)(1)
of the General Instructions for use of Form S-3, intends to register on
Form S-3 all resales by Smith Barney of its Exchange Notes. In addition, the
Company intends to file on Form S-3 a prospectus for distribution by Smith
Barney in connection with its market-making activities. Smith Barney intends to
deliver the market-making prospectus in connection with its market-making
activities in the Exchange Notes in accordance with the provisions of the Act.

<PAGE>

EXPERTS

The consolidated financial statements and schedules of the Company as of
December 31, 1995 and 1994, and for each of the years in the three-year period
ended December 31, 1995, incorporated or included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995, have been
incorporated by reference herein, in reliance upon the reports (also
incorporated by reference herein) of KPMG Peat Marwick LLP, independent
certified public accountants, and upon the authority of said firm as experts in
accounting and auditing. The reports of KPMG Peat Marwick LLP covering the
December 31, 1995 consolidated financial statements and schedules refer to
changes in the Company's method of accounting for certain investments in debt
and equity securities in 1994 and methods of accounting for postretirement
benefits other than pensions and accounting for postemployment benefits in
1993. The preacquisition consolidated financial statements of The Travelers
Corporation and subsidiaries as of December 31, 1993 and for the year then
ended included in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995, have been incorporated by reference herein, in reliance
upon the report which includes an explanatory paragraph referring to changes
in the method of accounting for reinsurance in 1993 (also incorporated by
reference herein) of Coopers & Lybrand L.L.P., independent accountants, and
upon the authority of said firm as experts in accounting and auditing. The
combined financial statements as of and for the year ended December 31, 1995
of The Aetna Casualty and Surety Company and The Standard Fire Insurance
Company and their subsidiaries included in the Company's Current Report on
Form 8-K, dated April 2, 1996, as amended, have been incorporated by reference
herein, in reliance upon the report (also incorporated by reference herein) of
KPMG Peat Marwick LLP, independent certified public accountants, and upon the
authority of said firm as experts in accounting and auditing.

ERISA MATTERS

By virtue of the Company's affiliation with certain of its
subsidiaries, including insurance company subsidiaries and Smith Barney, that
provide services to many employee benefit plans, including investment advisory
and asset management services, the Company and any direct or indirect
subsidiary of the Company may each be considered a "party in interest" within
the meaning of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"), and a "disqualified person" under corresponding provisions of the
Code, with respect to such employee benefit plans. "Prohibited transactions"
within the meaning of ERISA and the Code may result if the Notes are acquired
by an employee benefit plan with respect to which the Company or any direct or
indirect subsidiary of the Company is a party in interest, unless such
securities are acquired pursuant to an applicable exemption. Any employee
benefit plan or other entity subject to such provisions of ERISA or the Code
proposing to acquire the Notes should consult with its legal counsel.

LEGAL MATTERS

The validity of the Exchange Notes will be passed upon for the Company by
Charles O. Prince, III, Esq., General Counsel of the Company, Travelers Group
Inc., 388 Greenwich Street, New York,

<PAGE>

New York 10013. Mr. Prince, Executive Vice President, General Counsel and
Secretary of the Company, beneficially owns, or has rights to acquire under the
Company's employee benefit plans, an aggregate of less than 1% of the Company's
common stock.

No dealer, salesman or any other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus or the documents incorporated by reference herein, in connection
with the offering contained in this Prospectus, and, if given or made, such
information or representations must not be relied upon as having been
authorized by the Company. This Prospectus shall not constitute an offer to
sell, or a solicitation of an offer to buy, any of the securities offered
hereby in any state to any person to whom it is unlawful to make such offer or
solicitation in such state. The delivery of this Prospectus does not imply
that the information herein is correct as of any time subsequent to the date
hereof.

EXCHANGE AGENT

By Hand/Express Mail: The Bank of New York
101 Barclay Street (7 East)
Reorganization Section
Corporate Trust Services Window
New York, NY 10286
Attention: Enrique Lopez

By Facsimile: (212) 571-3080

By Telephone: (212) 815-2742 (Call Collect)

By Mail: The Bank of New York
101 Barclay Street (7 East)
Reorganization Section
New York, NY 10286
Attention: Enrique Lopez