<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM ________ TO ________
COMMISSION FILE NUMBER 33-58677
THE TRAVELERS LIFE AND ANNUITY COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CONNECTICUT 06-0904249
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
(Address of principal executive offices) (Zip Code)
(860) 277-0111
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes /X/ No / /
As of the date hereof, there were outstanding 30,000 shares of common stock, par
value $100 per share, of the registrant, all of which were owned by The
Travelers Insurance Company, an indirect wholly owned subsidiary of Travelers
Group Inc.
REDUCED DISCLOSURE FORMAT
The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format.
<PAGE> 2
THE TRAVELERS LIFE AND ANNUITY COMPANY
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1998
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page
ITEM 1. FINANCIAL STATEMENTS
Condensed Statements of Income and Retained Earnings for the
Three Months Ended March 31, 1998 and 1997 (unaudited).........................3
Condensed Balance Sheets as of March 31, 1998 (unaudited) and
December 31, 1997..............................................................4
Condensed Statements of Cash Flows for the
Three Months Ended March 31, 1998 and 1997 (unaudited).........................5
Notes to Condensed Financial Statements (unaudited)............................6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS..................................9
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.....................................12
SIGNATURES....................................................................13
2
<PAGE> 3
THE TRAVELERS LIFE AND ANNUITY COMPANY
CONDENSED STATEMENTS OF INCOME AND RETAINED EARNINGS (UNAUDITED)
($ IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
- ---------------------------------------------------------------------------------------- -----------------------
1998 1997
-------- --------
<S> <C> <C>
REVENUES
Premiums $ 9,035 $ 6,091
Net investment income 40,028 39,245
Realized investment gains 2,936 7,285
Other revenues 5,008 1,587
- ---------------------------------------------------------------------------------------- -------- --------
Total Revenues $ 57,007 $ 54,208
- ---------------------------------------------------------------------------------------- -------- --------
BENEFITS AND EXPENSES
Current and future insurance benefits 23,078 24,300
Interest credited to contractholders 12,134 6,270
Amortization of deferred acquisition costs and
value of insurance in force 1,779 1,901
Other operating expenses 3,446 1,838
- ---------------------------------------------------------------------------------------- -------- --------
Total Benefits and Expenses $ 40,437 $ 34,309
- ---------------------------------------------------------------------------------------- -------- --------
Income before federal income taxes 16,570 19,899
Federal income taxes 5,787 6,950
- ---------------------------------------------------------------------------------------- -------- --------
Net income 10,783 12,949
Retained earnings at beginning of period 225,070 167,698
- ---------------------------------------------------------------------------------------- -------- --------
Retained earnings at end of period $235,853 $180,647
======================================================================================== ======== ========
</TABLE>
See Notes to Condensed Financial Statements.
3
<PAGE> 4
THE TRAVELERS LIFE AND ANNUITY COMPANY
CONDENSED BALANCE SHEETS
($ IN THOUSANDS)
<TABLE>
<CAPTION>
MARCH 31, 1998 DECEMBER 31, 1997
- ----------------------------------------------------------------------- ---------- ----------
ASSETS (UNAUDITED)
<S> <C> <C>
Investments $2,342,114 $2,145,127
Separate and variable accounts 1,138,287 812,059
Deferred acquisition costs and value of insurance in force 110,872 90,966
Deferred federal income taxes 34,600 33,661
Other assets 83,866 73,414
- ----------------------------------------------------------------------- ---------- ----------
Total Assets $3,709,739 $3,155,227
- ----------------------------------------------------------------------- ---------- ----------
LIABILITIES
Future policy benefits 972,809 971,602
Contractholder funds 899,568 818,971
Separate and variable accounts 1,138,287 812,059
Other liabilities 221,207 86,934
- ----------------------------------------------------------------------- ---------- ----------
Total Liabilities $3,231,871 $2,689,566
- ----------------------------------------------------------------------- ---------- ----------
SHAREHOLDER'S EQUITY
Common stock, par value $100; 100,000 shares authorized; 30,000
issued and outstanding 3,000 3,000
Additional paid-in capital 167,314 167,314
Retained earnings 235,853 225,070
Accumulated other changes in equity from nonowner sources 71,701 70,277
- ----------------------------------------------------------------------- ---------- ----------
Total Shareholder's Equity $ 477,868 $ 465,661
- ----------------------------------------------------------------------- ---------- ----------
Total Liabilities and Shareholder's Equity $3,709,739 $3,155,227
======================================================================= ========== ==========
</TABLE>
See Notes to Condensed Financial Statements.
4
<PAGE> 5
THE TRAVELERS LIFE AND ANNUITY COMPANY
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
INCREASE (DECREASE) IN CASH
($ IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, 1998 1997
- ---------------------------------------------------------------------------------------- --------- ---------
<S> <C> <C>
Net cash provided by (used in) operating activities $ (34,736) $ 2,451
- ---------------------------------------------------------------------------------------- --------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investments
Fixed maturities 20,086 15,000
Mortgage loans 7,159 1,576
Proceeds from sales of investments
Fixed maturities 119,183 196,259
Equity securities 2,765 3,046
Real estate held for sale -- 6,371
Purchases of investments
Fixed maturities (278,309) (159,025)
Equity securities (11,098) (2,013)
Mortgage loans (5,400) (8,930)
Policy loans, net (441) (244)
Short-term securities (purchases) sales, net 15,260 (70,349)
Other investments (purchases) sales, net (5,298) 2,271
Securities transactions in course of settlement 89,260 3,090
- ---------------------------------------------------------------------------------------- --------- ---------
Net cash used in investing activities (46,833) (12,948)
- ---------------------------------------------------------------------------------------- --------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES
Contractholder fund deposits 113,490 11,519
Contractholder fund withdrawals (32,893) (1,022)
- ---------------------------------------------------------------------------------------- --------- ---------
Net cash provided by financing activities 80,597 10,497
- ---------------------------------------------------------------------------------------- --------- ---------
Net increase (decrease) in cash (972) --
Cash at beginning of period 1,563 --
- ---------------------------------------------------------------------------------------- --------- ---------
Cash at end of period $ 591 $ --
======================================================================================== ========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid (received) $ 10,315 $ (1,145)
======================================================================================== ========= =========
</TABLE>
See Notes to Condensed Financial Statements.
5
<PAGE> 6
THE TRAVELERS LIFE AND ANNUITY COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL
The interim financial statements of The Travelers Life and Annuity Company
(the Company), a wholly owned subsidiary of The Travelers Insurance
Company, an indirect wholly-owned subsidiary of Travelers Group Inc.
(Travelers Group), have been prepared in conformity with generally accepted
accounting principles (GAAP) and are unaudited. In the opinion of
management, the interim financial statements reflect all adjustments
necessary (all which were normal recurring adjustments), for a fair
statement of results for the periods reported. The accompanying condensed
financial statements should be read in conjunction with the financial
statements and related notes included in the Company's Form 10-K for the
year ended December 31, 1997.
ACCOUNTING CHANGES
Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 127, "Deferral of the Effective Date of Certain
Provisions of SFAS 125" (FAS 127), which was effective for transfers and
pledges of certain financial assets and collateral made after December 31,
1997. The adoption of FAS 127 created additional assets and liabilities on
the Company's condensed consolidated statement of financial position
related to the recognition of securities provided and received as
collateral. At March 31, 1998, the impact of FAS 127 on the Company's
condensed consolidated statement of financial position was not significant.
Reporting Comprehensive Income
Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (FAS 130).
FAS 130 establishes standards for the reporting and display of
comprehensive income and its components in a full set of general-purpose
financial statements. All items that are required to be recognized under
accounting standards as components of comprehensive income are required to
be reported in an annual financial statement that is displayed with the
same prominence as other financial statements. This statement stipulates
that comprehensive income reflect the change in equity of an enterprise
during a period from transactions and other events and circumstances from
nonowner sources. Comprehensive income will thus represent the sum of net
income and other changes in stockholder's equity from nonowner sources. The
accumulated balance of other changes in equity from nonowner sources is
required to be displayed separately from retained earnings and additional
paid-in capital in the balance sheet. The adoption of FAS 130 resulted
primarily in the reporting of unrealized gains and losses on investments in
debt and equity securities in changes in equity from nonowner sources. The
Company's total changes in equity from nonowner sources are as follows:
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
($ in thousands) 1998 1997
------- --------
<S> <C> <C>
Net income $10,783 $ 12,949
Other changes in equity from nonowner sources 1,424 (39,674)
------- --------
Total Changes in Equity from Nonowner Sources $12,207 $(26,725)
======= ========
</TABLE>
6
<PAGE> 7
THE TRAVELERS LIFE AND ANNUITY COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
FUTURE APPLICATION OF ACCOUNTING STANDARDS
In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants (AcSEC of the AICPA) issued
Statement of Position 98-1, "Accounting for the Costs of Computer Software
Developed or Obtained for Internal Use" (SOP 98-1). SOP 98-1 provides
guidance on accounting for the costs of computer software developed or
obtained for internal use and for determining when specific costs should be
capitalized or expensed. SOP 98-1 is effective for financial statements for
fiscal years beginning after December 15, 1998 and the effect of the initial
adoption is to be reported as a cumulative catch-up adjustment. Restatement
of previously issued financial statements is not allowed. The Company is
currently determining what impact, if any, that SOP 98-1 will have on its
consolidated financial statements or when it will be implemented, but does
not believe the impact, if any, will have a material effect on the results
of operations, financial condition or liquidity of the Company.
In December 1997, the AcSEC of the AICPA issued Statement of Position 97-3,
"Accounting by Insurance and Other Enterprises for Insurance-Related
Assessments" (SOP 97-3). SOP 97-3 provides guidance for determining when an
entity should recognize a liability for guaranty-fund and other
insurance-related assessments, how to measure that liability, and when an
asset may be recognized for the recovery of such assessments through premium
tax offsets or policy surcharges. SOP 97-3 is effective for financial
statements for fiscal years beginning after December 15, 1998, and the
effect of initial adoption is to be reported as a cumulative catch-up
adjustment. Restatement of previously issued financial statements is not
allowed. The Company has not yet determined when it will implement SOP 97-3
and does not anticipate any material impact on the Company's financial
condition, results of operations or liquidity.
In June 1997, the Financial Accounting Standards Board also issued Statement
of Financial Accounting Standards No. 131, "Disclosures About Segments of an
Enterprise and Related Information" (FAS 131). FAS 131 establishes standards
for the way that public enterprises report information about operating
segments in annual financial statements and requires that selected
information about those operating segments be reported in interim financial
statements. FAS 131 supersedes Statement of Financial Accounting Standards
No. 14, "Financial Reporting for Segments of a Business Enterprise" (FAS
14). FAS 131 requires that all public enterprises report financial and
descriptive information about its reportable operating segments. Operating
segments are defined as components of an enterprise about which separate
financial information is available that is evaluated regularly by the chief
operating decision maker in deciding how to allocate resources and in
assessing performance. FAS 131 is effective for fiscal years beginning after
December 15, 1997 and need not be applied to interim financial statements in
the initial year of application. The Company's reportable operating segment
will not change as a result of the adoption of FAS 131.
Certain reclassifications have been made to the prior year's financial
statements to conform to the current year's presentation.
7
<PAGE> 8
THE TRAVELERS LIFE AND ANNUITY COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
2. SHAREHOLDER'S EQUITY
Statutory capital and surplus of the Company was $328.2 million at December
31, 1997. The Company is currently subject to various regulatory
restrictions that limit the maximum amount of dividends available to be paid
to its parent without prior approval of insurance regulatory authorities.
Statutory surplus of $63.6 million is available in 1998 for dividend
payments by the Company without prior approval of the Connecticut Insurance
Department. The Company has not paid dividends to its parent during the
three months ended March 31, 1998.
3. COMMITMENTS AND CONTINGENCIES
The Company is a defendant in various litigation matters in the normal
course of business. Although there can be no assurances, as of March 31,
1998, the Company believes, based on information currently available, that
the ultimate resolution of these legal proceedings would not be likely to
have a material adverse effect on its results of operations, financial
condition or liquidity.
4. SUBSEQUENT EVENT
On April 6, 1998, Travelers Group announced that it had entered into a
Merger Agreement with Citicorp, pursuant to which Citicorp will be merged
with and into a newly formed, wholly owned subsidiary of Travelers Group
(the Merger).
In order to consummate the Merger, Travelers Group will apply to the Board
of Governors of the Federal Reserve System (the Federal Reserve Board) to
become a bank holding company under the provisions of the Bank Holding
Company Act of 1956 (the BHCA). A bank holding company and its affiliates
may not engage in activities that are not permissible under the BHCA,
including, generally, insurance underwriting. However, under present rules,
the Company's existing businesses can be retained and operated by Travelers
Group for at least a two-year period after the Merger (the BHCA Compliance
Period), which may be extended for three additional one-year periods by the
Federal Reserve Board, if, in its judgment, an extension would not be
detrimental to the public interest.
Upon consummation of the Merger, and as a direct result of Travelers Group
becoming a bank holding company, the BHCA will impose certain restrictions
on Travelers Group's operations going forward, including the ability to make
acquisitions of certain insurance underwriters. It is not expected that such
restrictions will impede the Company's existing businesses in any material
respect or preclude Travelers Group from expanding its existing insurance
underwriting activities (other than by acquisition of certain insurance
underwriters). At this time, the Company believes that its compliance with
applicable law following the Merger will not have a material adverse effect
on the Company's financial condition or results of operations.
There is pending federal legislation that would, if enacted, amend the BHCA
to authorize a bank holding company to own certain insurance underwriters.
There is no assurance that such legislations will be enacted. At the
expiration of the BHCA Compliance Period, Travelers Group will evaluate its
alternatives in order to comply with whatever laws are then applicable.
8
<PAGE> 9
THE TRAVELERS LIFE AND ANNUITY COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's narrative analysis of the results of operations is presented in
lieu of Management's Discussion and Analysis of Financial Condition and Results
of Operations, pursuant to General Instruction H(2)(a) of Form 10-Q.
RESULTS OF OPERATIONS ($ in millions)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31, 1998 1997
---- ----
<S> <C> <C>
Revenues $57.0 $54.2
===== =====
Net income (1) $10.8 $12.9
===== =====
</TABLE>
(1) Net income includes $1.9 million and $4.7 million of reported investment
portfolio gains in 1998 and 1997, respectively.
The Travelers Life and Annuity Company (the Company) offers fixed and variable
deferred annuities and individual life insurance to individuals and small
businesses. It also provides individual structured settlement annuities and
single premium group annuity close-out contracts.
The individual life and deferred annuity business is marketed primarily through
the Financial Consultants of Salomon Smith Barney, an affiliate of the Company,
and a nationwide network of independent agents. The majority of the annuity
business and a substantial portion of the individual life business written by
the Company is accounted for as investment contracts, with the result that the
amounts collected from contractholders are not included in revenues.
The Company has structured settlement contracts that provide guarantees for the
contractholders independent of the investment performance of the assets held in
the related separate account. The assets held in the separate account are owned
by the Company and contractholders do not share in their investment performance.
These contracts are purchased by the insurance subsidiaries of Travelers
Property Casualty Corp. (TAP), an affiliate of the Company, in connection with
the settlement of certain of their policyholder obligations.
Net income for the three months ended March 31, 1998 was $10.8 million, compared
to $12.9 million for the three months ended March 31, 1997. Excluding net
realized investment gains and losses, operating earnings increased from $8.2
million in 1997 to $8.9 million in 1998. This increase was primarily driven by
an increase in management fee income attributable to the growth in the Company's
deferred annuity business.
9
<PAGE> 10
THE TRAVELERS LIFE AND ANNUITY COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
PREMIUMS AND DEPOSITS ($ in thousands)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31, 1998 1997
-------- --------
<S> <C> <C>
Deferred annuities $310,714 $ 86,026
Structured settlements 9,534 20,575
Universal life 20,611 6,484
Traditional life 3,353 2,056
Single premium group close-out 283 126
-------- --------
Total $344,495 $115,267
======== ========
</TABLE>
The increase in deferred annuity and universal life deposits is attributable to
strong sales of products distributed by the Financial Consultants of Salomon
Smith Barney, an affiliate of the Company. The structured settlement decrease
reflects a change in Company policy. All new structured settlements are now
being sold by The Travelers Insurance Company, the Company's parent.
Policyholder benefit reserves, contractholder funds and separate account
reserves totaled $2.9 billion at March 31, 1998, up from $1.9 billion at March
31, 1997, primarily as a result of growth in the individual life and deferred
annuity business.
PENDING MERGER
On April 6, 1998, Travelers Group announced that it had entered into a Merger
Agreement with Citicorp, pursuant to which Citicorp will be merged with and into
a newly formed, wholly owned subsidiary of Travelers Group (the Merger).
In order to consummate the Merger, Travelers Group will apply to the Board of
Governors of the Federal Reserve System (the Federal Reserve Board) to become a
bank holding company under the provisions of the Bank Holding Company Act of
1956 (the BHCA). A bank holding company and its affiliates may not engage in
activities that are not permissible under the BHCA, including, generally,
insurance underwriting. However, under present rules, the Company's existing
businesses can be retained and operated by Travelers Group for at least a
two-year period after the Merger (the BHCA Compliance Period), which may be
extended for three additional one-year periods by the Federal Reserve Board, if,
in its judgment, an extension would not be detrimental to the public interest.
INSURANCE REGULATIONS
Risk-based capital requirements are used as early warning tools by the National
Association of Insurance Commissioners and the states to identify companies that
merit further regulatory action. At March 31, 1998, the Company had adjusted
capital in excess of amounts requiring any regulatory action.
The Company is subject to various regulatory restrictions that limit the maximum
amount of dividends available to be paid to its parent without prior approval of
insurance regulatory authorities in the state of domicile. The maximum amount of
dividends available to be paid to the Company's shareholder in 1998 without
prior approval of the Connecticut Insurance Department is $63.3 million. The
Company has not paid dividends to its parent during the three months ended March
31, 1998.
10
<PAGE> 11
THE TRAVELERS LIFE AND ANNUITY COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
YEAR 2000
In 1996, the Company began the process of identifying, evaluating and
implementing changes to computer programs necessary to address the year 2000
issue. This issue involves the ability of computer systems that have
time-sensitive programs to properly recognize the year 2000. The inability to do
so could result in major failures or miscalculations. The Company has a
comprehensive plan in progress to address its internal year 2000 issue with
modifications to existing programs and conversions to new programs to bring all
of its critical business systems into year 2000 compliance by year-end 1998. The
total cost associated with the required modifications and conversions, which are
expensed as incurred, is not expected to have a material effect on the Company's
financial position, results of operations or liquidity. The Company also has
third party customers, financial institutions, vendors and others with which it
conducts business and has confirmed their plans to address year 2000 issues.
While the Company has been advised that these efforts by third party vendors and
customers will be successfully completed in a timely manner, it is possible that
a series of failures by third parties could have a material adverse effect on
the Company's results of operations in future periods.
FUTURE APPLICATIONS OF ACCOUNTING STANDARDS
See Note 1 to the Condensed Financial Statements for a discussion of recently
issued accounting pronouncements.
11
<PAGE> 12
THE TRAVELERS LIFE AND ANNUITY COMPANY
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION FILING METHOD
----------- ----------- -------------
<S> <C> <C>
3.01 Charter of The Travelers Life and Annuity Company (the
"Company"), as amended on April 10, 1990, incorporated herein
by reference to Exhibit 6(a) to the Registration Statement on
Form N-4, File No. 33-58131, filed on March 17, 1995.
3.02 By-laws of the Company, as amended on October 20, 1994,
incorporated herein by reference to Exhibit 6(b) to the
Registration Statement on Form N-4, File No. 33-58131, filed
on March 17, 1995.
27.01 Financial Data Schedule Electronic
</TABLE>
(b) REPORTS ON FORM 8-K.
On April 22, 1998, the Company filed a current report on Form 8-K dated April 5,
1998, reporting under Item 5 thereof, that Travelers Group Inc., the Company's
ultimate parent, had entered into a Merger Agreement with Citicorp, pursuant to
which Citicorp will be merged with and into Travelers Group Inc.
12
<PAGE> 13
THE TRAVELERS LIFE AND ANNUITY COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<S> <C>
THE TRAVELERS LIFE AND ANNUITY COMPANY
--------------------------------------
(Registrant)
Date May 13, 1998 /s/ Ian R. Stuart
--------------------------------------- -----------------
Ian R. Stuart
Chief Financial Officer and Chief Accounting Officer
(Principal Financial Officer)
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
This schedule contains summary financial information extracted from the
Financial Statements of The Travelers Life and Annuity Company and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000929498
<NAME> THE TRAVELERS LIFE AND ANNUITY COMPANY
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 2,342,114
<CASH> 591
<RECOVER-REINSURE> 0
<DEFERRED-ACQUISITION> 110,872
<TOTAL-ASSETS> 3,709,739
<POLICY-LOSSES> 972,809
<UNEARNED-PREMIUMS> 0
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 2,037,855
<NOTES-PAYABLE> 0
0
0
<COMMON> 3,000
<OTHER-SE> 474,868
<TOTAL-LIABILITY-AND-EQUITY> 3,709,739
9,035
<INVESTMENT-INCOME> 40,028
<INVESTMENT-GAINS> 2,936
<OTHER-INCOME> 5,008
<BENEFITS> 35,212
<UNDERWRITING-AMORTIZATION> 1,779
<UNDERWRITING-OTHER> 3,446
<INCOME-PRETAX> 16,570
<INCOME-TAX> 5,787
<INCOME-CONTINUING> 10,783
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,783
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
