TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES, N-30D, 1996-02-28

TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
N-30D, 1996-02-28

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<PAGE> 1

UNIVERSAL ANNUITY

ANNUAL REPORTS

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES

DECEMBER 31, 1995

[LOGO]

THE TRAVELERS INSURANCE COMPANY
ONE TOWER SQUARE
HARTFORD, CONNECTICUT 06183

<PAGE> 2

[LOGO] The Travelers Investment Management Company ("TIMCO")
provides equity management and advisory services for
The Travelers Growth and Income Stock Account for
Variable Annuities.

[LOGO] Travelers Asset Management International Corporation
("TAMIC") provides fixed income management and advisory
services for the following Travelers Variable Products
Separate Accounts contained in this report: The
Travelers Quality Bond Account for Variable Annuities
and The Travelers Money Market Account for Variable
Annuities.

<PAGE> 3

[LOGO]

THE TRAVELERS VARIABLE PRODUCT SEPARATE ACCOUNTS
INVESTMENT ADVISORY COMMENTARY AS OF DECEMBER 31, 1995

FINANCIAL MARKET REVIEW AND OUTLOOK

Financial markets had a great year in 1995 with the Standard & Poors 500 Stock
Index having its best year since 1958 (+37.6%) and the Lehman
Government/Corporate Bond Index having its best performance since 1985
(+19.2%). Beyond Wall Street, however, signs of economic stress are becoming
apparent. Consumer delinquencies and defaults are increasing. A number of
corporate defaults have already occurred, causing some negative fallout in the
high yield bond market. December retail sales came in even below already
pessimistic expectations. Cyclical industries such as paper, steel, and autos
are starting to see price declines, closing plants and laying off workers. In
Washington, many government workers are on furlough as the two parties debate
how much (not whether or not) the Federal deficit will be reduced. Against
this backdrop, the Federal Reserve Board ("Fed") dropped short-term interest
rates 25 basis points on December 19th, its first cut since July, 1995.

Looking towards 1996, the slowdown in economic growth combined with few sources
of upside surprises make lower money market rates our most confident forecast.
Current economic weakness will keep the Fed in an easing mode even if budget
talks remain in a stalemate. Theoretical policy rules for determining Federal
Funds targets argue that short-term interest rates should be between 4% and 5%,
not their current 5.5%. Unlike 1993, when growth had been slow for several
years, there is no pent-up demand for housing, autos, or even capital goods
that can cause an upside surprise in economic growth. The key question for the
bond market is whether slow economic growth causes short rates to go
significantly below 5%. We think they will because the economy continues to
weaken and any backup in rates caused by the budget negotiations in Washington
will further weaken the economy. We are focusing on intermediate maturities
because the yield curve is likely to steepen. We also continue to be
comfortable with an overweighting in corporate issues, although we need to be
diligent to protect against credit surprises. We also continue to think that
mortgaged-backed securities are cheap and have maintained our overweighting in
that area.

In the stock market, cyclical issues led by the railroad, aluminum, machinery,
and semiconductor groups rallied early in the third quarter on strong earnings
momentum, rising analyst estimates, and expectations for a rebound in economic
growth. Mergers in the banking, utility, and media industries also gave an
optimistic tone to the market. However by early September, investors turned
less optimistic about prospects for economic growth, earnings momentum, and
profit margins in late 1995 and 1996. During the fourth quarter, investors
continued to rotate out of cyclical and into defensive groups, such as drugs,
food, and beverages, which were expected to produce the best relative earnings
and gains in 1996. In the energy sector, rising prices for oil and natural
gas, as well as attractive relative yields, supported higher valuations.
Technology stocks declined dramatically on signs of weakening demand for
personal computers and softer prices for semiconductors and other PC
components.

The performance of the stock market in 1996 will be driven by corporate
earnings. The impetus for much of last year's advance to new record highs was
generated by positive earnings surprises. The weaker economic environment that
exists now makes it unlikely that the stock market will repeat its performance.
Generally, the U.S. stock market is fairly valued given the current level of
interest rates and should be able to muddle through with a "normal" 10% year as
long as we avoid a recession. If the economy does worsen, the extent of the
equity market decline will be a function of how quickly companies can adjust
their cost structure to changes in revenues. Judged by the ability of most
companies to sustain earnings growth even in the face of weakening demand in
1995, we think that the most negative "bears" on the outlook for the stock
market are too pessimistic, especially given the valuation support that will be
provided by lower interest rates.

-1-

<PAGE> 4

TABLE OF CONTENTS

PAGE
-----------------------------------------------------------------

<S> <C>
THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES ..................................... 3

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES .. 16

THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES .. 28
</TABLE>

-2-

<PAGE> 5

THE TRAVELERS
GROWTH AND INCOME
STOCK ACCOUNT
FOR VARIABLE ANNUITIES

For the twelve months ending December 31, 1995, the Travelers Growth and Income
Stock Account achieved a total return of 37.7% before fees and expenses,
slightly outperforming the S&P 500 return of 37.6%. Net of fees and expenses,
the portfolio's total return of 35.4% for the same period was well ahead of the
31.2% average total return for variable annuity stock accounts in the Lipper
Growth & Income category.

During the second half of 1995, the strongest contributions to relative
performance were achieved in the consumer discretionary, consumer staples and
finance sectors. In the consumer discretionary sector, performance was
bolstered in particular by our holdings in Nike (+66%) and Safeway (+36%). In
the consumer staples sector, the portfolio benefited from overweighted
positions in PepsiCo (+24%), Philip Morris (+21%) and Ralston-Purina (+21%).
Stock selection in the financial sector also contributed positively, through
holdings in NationsBank (+29%) and Chase Manhattan Bank (+27%). On the other
hand, performance in the technology sector was somewhat disappointing,
penalized by our holdings in Silicon Graphics (-32%), which experienced slower
than expected sales growth because of product transition problems, and by our
exposure to the weak semiconductor group, including Texas Instruments (-23%)
and Cypress Semiconductor (-24%).

Looking ahead, in light of the equity market's record-setting advance in 1995
and signs of an impending economic slowdown, we have placed increased emphasis
on diversifying our stock holdings, especially within sectors that are likely
to exhibit above-average cyclical earnings volatility. In the technology
sector, we have focused on stocks that are likely to maintain positive earnings
visibility in 1996, including 3Com in the enterprise networking group and
Oracle Systems in the software group. In the health care sector, we have
emphasized Johnson & Johnson and Medtronic in the medical devices group. In
the consumer discretionary sector, our major overweights include Nike and
Safeway. In the finance sector, we are emphasizing Green Tree Financial,
Citicorp and NationsBank.

-3-

<PAGE> 6

THE TRAVELERS
GROWTH AND INCOME
STOCK ACCOUNT
FOR VARIABLE ANNUITIES

<TABLE>
<CAPTION>
NON-TIMED 12/95 1 YEAR 3 YEAR 5 YEAR
- --------------- ------ ------ ------
<S> <C> <C> <C>
The Travelers Growth and Income Stock Account 35.44 12.92 13.16
Lipper Growth and Income Category Average 31.18 12.27 14.68
</TABLE>

This is a comparison of The Travelers Growth and Income Stock Account versus
Lipper Analytical Services' variable annuity composite index, which provides
the average performance of variable annuity funds with similar objectives as of
December 31, 1995. Lipper Analytical Services is a leading independent
Variable Insurance Product Performance Analysis Service. The performance of
the composite is net of all asset based fees such as mortality and expense
charges and portfolio management fees. Performance reflects the charges
associated with Universal Annuity, which became available on May 16, 1983.
Contracts issued prior to May 16, 1983, have different contract charges that
result in different performance than presented above.

Universal Annuity fund performance information is net of: 1) the 1.25% annual
mortality and expense risk charge, and 2) portfolio management fees. The
deduction of the $15 semi-annual administrative charge and the contingent
deferred sales charge (5% maximum) is not reflected. The deduction of those
charges would reduce any percentage increase or make greater any percentage
decrease. Performance data quoted represents past performance. Investment
return and principal value of an investment will fluctuate so that an
investor's units, when redeemed, may be worth more or less than their original
cost.

The following is the performance data required by SEC rules governing uniform
performance reporting: one year 30.08%, five year 12.20% and ten year 10.75%.
This performance is based on a $1,000 hypothetical investment and reflects
deductions of all fees and charges including the semi-annual administrative
charge and deferred sales charge.

-4-

<PAGE> 7

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995

<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (identified cost $335,934,204) $420,557,596
Cash................................................................. 425,287
Receivables:
Dividends........................................................... 804,793
Interest............................................................ 4,493
Investment securities sold.......................................... 4,606,975
Purchase payments and transfers from other Travelers accounts....... 208,254
Variation on futures margin......................................... 2,100
Other assets......................................................... 20,396
------------
Total Assets....................................................... 426,629,894
------------
LIABILITIES:
Payables:
Investment securities purchased..................................... 3,049,304
Contract surrenders and transfers to other Travelers accounts....... 372,754
Investment management and advisory fees............................. 26,012
Accrued liabilities.................................................. 71,571
------------
Total Liabilities.................................................. 3,519,641
------------
NET ASSETS............................................................ $423,110,253
============
</TABLE>

See Notes to Financial Statements

-5-

<PAGE> 8

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends........................................... $ 8,691,154
Interest ........................................... 639,038
-----------
Total income....................................... $ 9,330,192

EXPENSES:
Investment management and advisory fees............. 1,700,124
Insurance charges................................... 4,324,809
-----------
Total expenses..................................... 6,024,933
------------
Net investment income............................. 3,305,259
------------
REALIZED GAIN AND CHANGE IN UNREALIZED GAIN ON
INVESTMENT SECURITIES:
Realized gain from investment security transactions:
Proceeds from investment securities sold........... 387,628,072
Cost of investment securities sold................. 349,676,213
-----------
Net realized gain................................. 37,951,859

Change in unrealized gain on investment securities:
Unrealized gain at December 31, 1994............... 12,899,180
Unrealized gain at December 31, 1995............... 84,623,392
-----------
Net change in unrealized gain for the year........ 71,724,212
------------
Net realized gain and change in unrealized gain.. 109,676,071
------------
Net increase in net assets resulting from operations $112,981,330
============
</TABLE>

See Notes to Financial Statements

-6-

<PAGE> 9

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
1995 1994
------------ ------------
<S> <C> <C>
OPERATIONS:
Net investment income........................................... $ 3,305,259 $ 3,903,113
Net realized gain from investment security transactions......... 37,951,859 9,768,357
Net change in unrealized gain on investment securities.......... 71,724,212 (17,759,208)
------------ ------------
Net increase (decrease) in net assets resulting from operations 112,981,330 (4,087,738)
------------ ------------
UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 2,505,561 and 3,287,872 units, respectively).... 20,576,327 22,820,587
Participant transfers from other Travelers accounts
(applicable to 2,758,216 and 2,395,050 units, respectively).... 23,120,885 16,585,884
Administrative charges
(applicable to 39,010 and 52,573 units, respectively).......... (345,103) (356,909)
Contract surrenders
(applicable to 3,134,685 and 3,654,777 units, respectively).... (26,235,475) (25,688,114)
Participant transfers to other Travelers accounts
(applicable to 3,616,329 and 5,819,195 units, respectively).... (29,697,410) (40,465,786)
Other payments to participants
(applicable to 138,390 and 245,574 units, respectively)........ (1,142,807) (1,752,347)
------------ ------------
Net decrease in net assets resulting from unit transactions.... (13,723,583) (28,856,685)
------------ ------------
Net increase (decrease) in net assets......................... 99,257,747 (32,944,423)

NET ASSETS:
Beginning of year............................................... 323,852,506 356,796,929
------------ ------------
End of year..................................................... $423,110,253 $323,852,506
============ ============
</TABLE>

See Notes to Financial Statements

-7-

<PAGE> 10

NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The Travelers Growth and Income Stock Account for Variable Annuities
("Account GIS") is a separate account of The Travelers Insurance Company
("The Travelers"), an indirect wholly owned subsidiary of Travelers Group
Inc., and is available for funding certain variable annuity contracts issued
by The Travelers. Account GIS is registered under the Investment Company
Act of 1940, as amended, as a diversified, open-end management investment
company.

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

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

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

Short-term investments for which a quoted market price is available are
valued at market. Short-term investments for which there is no reliable
quoted market price are valued by computing a market value based upon
quotations from dealers or issuers for securities of a similar type, quality
and maturity.

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

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

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

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

-8-

<PAGE> 11

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

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

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

Security transactions are accounted for on the trade date. Dividend income
is recorded on the ex-dividend date. Interest income is recorded on the
accrual basis.

2. INVESTMENTS

Purchases and sales of securities other than short-term investments
aggregated $362,287,474 and $348,166,551 respectively, for the year ended
December 31, 1995. Realized gains and losses from security transactions are
reported on an identified cost basis.

At December 31, 1995, Account GIS held 6 open S&P 500 Stock Index futures
contracts with a maturity date of March 15, 1996. The underlying face
value, or notional value, of these contracts at December 31, 1995, amounted
to $1,855,350. In connection with these contracts, short-term investments
with a par value of $200,000 had been pledged as margin deposits.

Net realized gains (losses) resulting from futures contracts were $2,884,399
and ($190,085) for the years ended December 31, 1995 and 1994, respectively.
These gains (losses) are included in the net realized gain from investment
security transactions on both the Statement of Operations and the Statement
of Changes in Net Assets. The cash settlement for December 31, 1995 is
shown on the Statement of Assets and Liabilities as a receivable for
variation on futures margin.

3. CONTRACT CHARGES

Investment management and advisory fees are calculated daily at an annual
rate of 0.45% of Account GIS's average net assets. These fees are paid to
The Travelers Investment Management Company, an indirect wholly owned
subsidiary of Travelers Group Inc.

Insurance charges are paid to The Travelers for the mortality and expense
risks assumed by The Travelers. On contracts issued prior to May 16, 1983,
these charges are equivalent to 1.0017% of the average net assets of Account
GIS on an annual basis. On contracts issued on or after May 16, 1983, the
charges for mortality and expense risks are equivalent to 1.25% of the
average net assets of Account GIS on an annual basis. Additionally, for
certain contracts in the accumulation phase, a semi-annual charge of $15
(prorated for partial periods) is deducted from participant account balances
and paid to The Travelers to cover administrative charges.

On contracts issued prior to May 16, 1983, The Travelers retained from
Account GIS sales charges of $40,106 and $54,101 for the years ended
December 31, 1995 and 1994, respectively. The Travelers generally assesses
a 5% contingent deferred sales charge if a participant's purchase payment is
surrendered within five years of its payment date. Contract surrender
payments are stated prior to the deduction of $189,214 and $146,421 of
contingent deferred sales charges for the years ended December 31, 1995 and
1994, respectively.

-9-

<PAGE> 12

NOTES TO FINANCIAL STATEMENTS - CONTINUED

4. NET ASSETS HELD BY AFFILIATE

Approximately $10,733,000 and $8,001,000 of the net assets of Account GIS
were held on behalf of an affiliate of The Travelers as of December 31, 1995
and 1994, respectively. Transactions with this affiliate during the years
ended December 31, 1995 and 1994, were comprised of participant purchase
payments of approximately $427,000 and $356,000 and contract surrenders of
approximately $560,000 and $653,000, respectively.

5. NET CONTRACT OWNERS' EQUITY

DECEMBER 31, 1995
---------------------------------------------------------------
UNIT NET
UNITS VALUE ASSETS
----- ----- ------
<S> <C> <C> <C>
Contracts issued prior to May 16, 1983.............. 17,463,591 $ 9.668 $ 168,855,951
Annuity Contracts issued prior to May 16, 1983...... 432,651 9.668 4,183,314
Contracts issued on or after May 16, 1983........... 26,625,318 9.369 249,479,832
Annuity Contracts issued on or after May 16, 1983... 63,090 9.369 591,156
--------------
Net Contract Owners' Equity............................................................ $ 423,110,253
==============
</TABLE>

-10-

<PAGE> 13

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

Contracts issued prior to May 16, 1983

<TABLE>
<CAPTION> FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income............................... $ .208 $ .192 $ .189 $ .192 $ .201
Operating expenses.................................... .123 .100 .092 .085 .077
------ ------ ------ ------ ------
Net investment income................................. .085 .092 .097 .107 .124

Unit value at beginning of year....................... 7.120 7.194 6.664 6.587 5.145
Net realized and change in unrealized gains (losses).. 2.463 (.166) .433 (.030) 1.318
------ ------ ------ ------ ------
Unit value at end of year............................. $9.668 $7.120 $7.194 $6.664 $6.587
====== ====== ====== ====== ======
SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase (decrease) in unit value................. 2.55 (.07) .53 .08 1.44
Ratio of operating expenses to average net assets..... 1.45% 1.41% 1.33% 1.33% 1.33%
Ratio of net investment income to average net assets.. 1.02% 1.30% 1.40% 1.67% 2.11%
Number of units outstanding at end of year (thousands) 17,896 19,557 21,841 22,516 24,868
Portfolio turnover rate............................... 96% 103% 81% 189% 319%
</TABLE>

Contracts issued on or after May 16, 1983

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income............................... $ .205 $ .189 $ .184 $ .188 $ .198
Operating expenses.................................... .140 .115 .106 .098 .091
------ ------ ------ ------ ------
Net investment income................................. .065 .074 .078 .090 .107

Unit value at beginning of year....................... 6.917 7.007 6.507 6.447 5.048
Net realized and change in unrealized gains (losses).. 2.387 (.164) .422 (.030) 1.292
------ ------ ------ ------ ------
Unit value at end of year............................. $9.369 $6.917 $7.007 $6.507 $6.447
====== ====== ====== ====== ======
SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase (decrease) in unit value................. 2.45 (.09) .50 .06 1.40
Ratio of operating expenses to average net assets..... 1.70% 1.65% 1.57% 1.58% 1.58%
Ratio of net investment income to average net assets.. .79% 1.05% 1.15% 1.43% 1.86%
Number of units outstanding at end of year (thousands) 26,688 26,692 28,497 29,661 26,235
Portfolio turnover rate............................... 96% 103% 81% 189% 319%
</TABLE>

-11-

<PAGE> 14

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF INVESTMENTS
DECEMBER 31, 1995

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
------- -----------
<S> <C> <C>
COMMON STOCKS (99.2%)
AMUSEMENTS (1.3%)
Harrah's Entertainment, Inc. 60,000 $ 1,455,000
Walt Disney Co. 69,900 4,124,100
-----------
5,579,100
-----------
BANKING (6.5%)
Banc One Corp. 69,537 2,625,022
Bank of Boston Corp. 10,500 485,625
Bank of New York, Inc. 17,000 828,750
BankAmerica Corp. 59,800 3,872,050
Barnett Banks, Inc. 29,500 1,740,500
Chase Manhattan Corp. 16,700 1,012,437
Chemical Banking Corp. 23,300 1,368,875
Citicorp 66,800 4,492,300
First Interstate Bancorp 7,300 996,450
First Union Corp. 16,300 906,688
Golden West Financial Corp. 23,200 1,281,800
Mellon Bank Corp. 11,900 639,625
NationsBank Corp. 52,500 3,655,312
Norwest Corp. 58,000 1,914,000
SunTrust Banks, Inc. 10,400 712,400
Wells Fargo & Co. 4,200 907,200
-----------
27,439,034
-----------
CHEMICALS, PHARMACEUTICALS AND
ALLIED PRODUCTS (14.4%)
Abbott Laboratories 91,900 3,836,825
Air Products & Chemicals, Inc. 38,700 2,041,425
American Home Products Corp. 27,100 2,628,700
Amgen (A) 48,800 2,894,450
Bristol-Myers Squibb Co. 30,300 2,602,013
Cabot Corp. 11,800 635,725
Clorox Co. 22,100 1,582,912
Colgate-Palmolive Co. 13,100 920,275
Dow Chemical Co. 24,500 1,724,188
E.I. Dupont de Nemours & Co. 49,700 3,472,787
Eastman Chemical Company 25,300 1,584,413
Eli Lilly & Co. 48,200 2,711,250
International Flavors & Fragrances 34,100 1,636,800
Johnson & Johnson 59,700 5,111,812
Merck & Co., Inc. 111,200 7,311,400
Monsanto Co. 10,800 1,323,000
Morton International, Inc. 47,400 1,700,475
Pfizer, Inc. 81,700 5,147,100
Pharmacia & Upjohn, Inc. (A) 46,400 1,798,000
Procter & Gamble Co. 79,400 6,590,200
Schering-Plough Corp. 57,800 3,164,550
-----------
60,418,300
-----------
</TABLE>

NO. OF MARKET
SHARES VALUE
------- -----------
<S> <C> <C>
COMMUNICATION (10.0%)
Ameritech Corp. 56,600 $ 3,339,400
AT&T Corp. 172,700 11,182,325
Bell Atlantic Corp. 41,000 2,741,875
Bellsouth Corp. 100,000 4,350,000
Capital Cities ABC, Inc. 14,600 1,801,275
GTE Corp. 76,500 3,366,000
ITT Industries, Inc. (A) 24,500 588,000
MCI Communications Corp. 55,700 1,458,644
NYNEX Corp. 58,300 3,148,200
Sprint Corp. 31,200 1,244,100
SBC Communications., Inc. 75,400 4,335,500
Tele-Communications, Inc. (A) 29,400 586,163
U S West Communications Group 16,800 600,600
U S West Media Group(A) 17,100 324,900
Viacom International, Inc. (A) 62,600 2,965,675
-----------
42,032,657
-----------
CONSTRUCTION (0.3%)
Pulte Corp. 34,600 1,163,425
-----------
CONTRACTORS (0.5%)
Fluor Corp. 30,200 1,993,200
-----------
ELECTRICAL AND
ELECTRONIC MACHINERY (6.2%)
Alliance Semiconductor (A) 11,400 131,100
Amphenol Corp. (A) 85,500 2,073,375
Andrew Corp. (A) 41,500 1,602,938
Cypress Semiconductor (A) 110,700 1,411,425
General Electric Co. 151,800 10,929,600
Intel Corp. 64,600 3,670,087
LSI Logic Corp. (A) 12,000 393,000
Micron Technology 35,100 1,390,838
Motorola, Inc. 40,700 2,319,900
Tellabs, Inc. (A) 10,500 389,812
Texas Instruments, Inc. 16,000 828,000
Time Warner, Inc. 27,300 1,033,988
-----------
26,174,063
-----------
FINANCE (3.6%)
American Express Co. 44,800 1,853,600
Dean Witter Discover & Co. 39,800 1,870,600
Federal Home Loan Corp. 17,200 1,436,200
Federal National Mortgage Assoc. 25,000 3,103,125
Green Tree Financial Corp. 67,300 1,775,037
Household International 28,500 1,685,063
Lehman Brothers Holding, Inc. 44,600 947,750
Merrill Lynch & Co., Inc. 38,800 1,978,800
Morgan Stanley Group, Inc. 7,300 588,562
-----------
15,238,737
-----------
</TABLE>

-12-

<PAGE> 15

STATEMENT OF INVESTMENTS - CONTINUED

NO. OF MARKET
SHARES VALUE
------- ----------
<S> <C> <C>
FOOD (9.0%)
Anheuser-Busch Cos. 12,400 $ 829,250
Campbell Soup Co. 19,400 1,164,000
Coca-Cola Co. 112,400 8,345,700
CONAGRA, Inc. 53,500 2,206,875
CPC International, Inc. 24,800 1,701,900
General Mills, Inc. 14,800 854,700
H.J. Heinz Co. 69,150 2,290,594
IBP, Inc. 13,600 686,800
Kellogg Co. 21,200 1,637,700
PepsiCo, Inc. 94,500 5,280,188
Philip Morris, Inc. 90,300 8,172,150
Ralston-Purina Group 28,700 1,790,162
Seagram Co. Ltd. 28,900 1,000,663
Unilever NV 12,400 1,745,300
-----------
37,705,982
-----------
INSURANCE (3.7%)
Aetna Life & Casualty Co. 9,700 671,725
Allstate Corp. 29,875 1,228,609
American International Group 54,450 5,036,625
Chubb Corp. 16,700 1,615,725
General Reinsurance Corp. 14,200 2,201,000
HealthCare COMPARE (A) 32,300 1,411,106
ITT Corp. (A) 24,500 1,298,500
ITT Hartford Group, Inc. (A) 24,500 1,185,187
United Healthcare Corp. 16,100 1,054,550
-----------
15,703,027
-----------
LUMBER AND WOOD PRODUCTS (0.1%)
Georgia-Pacific Corp. 8,600 590,175
-----------
MACHINERY (5.5%)
Apple Computer, Inc. 10,200 324,487
Applied Materials (A) 44,900 1,765,131
Baker Hughes, Inc. 66,000 1,608,750
Black & Decker Corp. 33,000 1,163,250
Cabletron Systems, Inc. (A) 7,100 575,100
Caterpillar, Inc. 18,400 1,081,000
Cisco Systems, Inc. (A) 27,100 2,024,031
Compaq Computer Corp. (A) 12,800 614,400
Duriron, Inc. 13,600 314,500
Harnischfeger Industries 44,900 1,492,925
Hewlett Packard Co. 45,400 3,802,250
International Business Machines Corp. 41,900 3,844,325
Silicon Graphics, Inc. (A) 61,900 1,702,250
Sun Microsystems (A) 19,200 877,200
3Com Corp. (A) 44,300 2,068,256
-----------
23,257,855
-----------
METAL PRODUCTS (2.0%)
Ball Corp. 35,200 968,000
Danaher Corp. 40,600 1,289,050
Gillette Co. 25,500 1,329,188
Inland Steel Industries, Inc. 31,300 786,413
Parker-Hannifin Corp. 41,900 1,435,075
Phelps Dodge Corp. 19,800 1,232,550
Reynolds Metals Co. 20,100 1,138,162
-----------
8,178,438
-----------
MINING (0.5%)
Freeport-McMoRan Copper & Gold 25,500 717,188
Homestake Mining Co. 88,100 1,376,562
-----------
2,093,750
-----------
</TABLE>

NO. OF MARKET
SHARES VALUE
------- ----------
<S> <C> <C>
MISCELLANEOUS MANUFACTURING (3.6%)
Baxter International, Inc. 10,600 $ 443,875
Eastman Kodak Co. 29,500 1,976,500
Emerson Electric Co. 37,000 3,024,750
Heart Technology, Inc. (A) 42,600 1,392,488
Honeywell, Inc. 38,300 1,862,337
Mattel, Inc. 58,900 1,811,175
Medtronic, Inc. 60,000 3,352,500
Xerox Corp. 9,200 1,260,400
-----------
15,124,025
-----------
OIL & GAS (0.6%)
Anadarko Petroleum 14,200 768,575
Schlumberger Ltd. 22,500 1,558,125
-----------
2,326,700
-----------
PAPER AND ALLIED PRODUCTS (1.0%)
Bowater, Inc. 23,700 841,350
Champion International Corp. 30,400 1,276,800
International Paper Co. 22,500 852,188
Kimberly Clark Corp. 10,530 871,357
-----------
3,841,695
-----------
PETROLEUM REFINING AND
RELATED INDUSTRIES (7.9%)
Amoco Corp. 60,500 4,348,437
Atlantic Richfield, Inc. 14,800 1,639,100
Chevron Corp. 57,800 3,034,500
Exxon Corp. 110,000 8,813,750
Mobil Corp. 48,100 5,387,200
Phillips Petroleum Co. 22,700 774,638
Royal Dutch Petroleum Co. 58,800 8,298,150
Texaco, Inc. 10,000 785,000
-----------
33,080,775
-----------
PRINTING, PUBLISHING AND
ALLIED INDUSTRIES (0.8%)
Gannett Co. 32,100 1,970,138
New York Times Co. 50,800 1,504,950
-----------
3,475,088
-----------
RETAIL (5.7%)
Federated Department Stores, Inc. (A) 64,000 1,760,000
General Nutrition Cos., Inc. (A) 2,900 64,525
Home Depot, Inc. 75,166 3,598,572
J.C. Penney Co. 46,000 2,190,750
May Department Stores 51,600 2,180,100
McDonalds Corp. 57,000 2,572,125
OfficeMax, Inc. (A) 56,000 1,253,000
Price/Costco, Inc. (A) 92,100 1,416,037
Safeway, Inc. (A) 30,000 1,545,000
Tandy Corp. 29,300 1,215,950
The GAP, Inc. 13,500 567,000
Wal-Mart Stores, Inc. 158,500 3,546,438
Walgreen Co. 65,100 1,944,862
-----------
23,854,359
-----------
RUBBER AND PLASTIC PRODUCTS (0.6%)
Nike, Inc. 38,000 2,645,750
-----------
SERVICES (2.7%)
Autodesk, Inc. 28,000 959,000
Columbia/HCA Healthcare Corp. 40,300 2,045,225
Computer Associates International 18,650 1,060,719
Microsoft (A) 48,400 4,250,125
Oracle Systems Corp. (A) 75,450 3,197,193
-----------
11,512,262
-----------
</TABLE>

-13-

<PAGE> 16

STATEMENT OF INVESTMENTS-CONTINUED

NO. OF MARKET
SHARES VALUE
---------- ------------
<S> <C> <C>
STONE, CLAY, GLASS AND
CONCRETE PRODUCTS (0.6%)
Minnesota Mining & Manufacturing Co. 38,200 $ 2,530,750
------------
TRANSPORTATION (1.7%)
AMR, Inc. (A) 21,400 1,588,950
Conrail, Inc. 23,100 1,617,000
CSX Corp. 43,800 1,998,375
Norfolk Southern Corp. 25,100 1,992,313
------------
7,196,638
------------
TRANSPORTATION MANUFACTURING (4.8%)
Boeing Co. 48,100 3,769,837
Chrysler Corp. 43,100 2,386,663
Eaton Corp. 25,100 1,345,987
Ford Motor Co. 103,300 2,995,700
General Motors Corp. 62,800 3,320,550
Lockheed Martin Corp. 18,039 1,425,081
McDonnell Douglas Corp. 23,600 2,171,200
United Technologies Corp. 17,800 1,688,775
Varity Corp. (A) 32,000 1,188,000
------------
20,291,793
------------
UTILITIES (4.7%)
Baltimore Gas & Electric Co. 69,600 1,983,600
Browning-Ferris Industries. 52,300 1,542,850
Duquesne Light Co. 51,300 1,577,475
Florida Power & Light Co. 53,100 2,462,513
Houston Industries 80,200 1,944,850
Pacific Enterprises 20,700 584,775
Panhandle Eastern Corp. 52,800 1,471,800
Public Service Enterprises Group 66,200 2,027,375
Southern Co. 113,700 2,799,862
Texas Utilities Co. 53,900 2,216,638
WMX Technologies, Inc. 44,500 1,329,437
------------
19,941,175
------------
WHOLESALE TRADE (0.9%)
Crane Co. 39,700 1,463,938
Enron Corp. 56,500 2,154,063
------------
3,618,001
------------
TOTAL COMMON STOCKS
(COST $332,383,742) 417,006,754
------------
</TABLE>

<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- -----------
<S> <C> <C>
SHORT-TERM INVESTMENTS (0.8%)
U.S. GOVERNMENT SECURITIES (0.0%)
United States of America Treasury,
5.49% due September 19, 1996 (C) $50,000 $47,462
United States of America Treasury,
5.51% due September 19, 1996 (C) 150,000 142,380
------------
189,842
------------
REPURCHASE AGREEMENTS (0.8%)
Merrill Lynch Government
Securities, Inc., 5.50% Repurchase
Agreement dated December 29,
1995, due January 2, 1996,
collateralized by: United States of
America Treasury, $3,375,000,
5.63% due October 31, 1997 3,361,000 3,361,000
------------

TOTAL SHORT-TERM
INVESTMENTS (COST $3,550,462) 3,550,842
------------
NOTIONAL
VALUE
----------
FUTURES CONTRACTS (0.0%)
S&P 500 Stock Index,
Exp. March, 1996 (D) $1,855,350 -
------------
TOTAL INVESTMENTS (100%)
(COST $335,934,204) (B) $420,557,596
------------
------------
</TABLE>

NOTES

(A) Non-income Producing Security.

(B) At December 31, 1995, net unrealized appreciation for all securities was
$84,623,392. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over cost of
$90,547,890 and aggregate gross unrealized depreciation for all securities
in which there was an excess of cost over market value of $5,924,498.

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

See Notes to Financial Statements

-14-
<PAGE> 17

REPORT OF INDEPENDENT ACCOUNTANTS

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

We have audited the accompanying statement of assets and liabilities of The
Travelers Growth and Income Stock Account for Variable Annuities including the
statement of investments as of December 31, 1995, and the related statement of
operations for the year then ended, the statement of changes in net assets for
each of the two years in the period then ended, and the per unit data for each
of the five years in the period then ended. These financial statements and per
unit data are the responsibility of management. Our responsibility is to
express an opinion on these financial statements and per unit data based on our
audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and per unit
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the financial statements and per unit data referred to above
present fairly, in all material respects, the financial position of The
Travelers Growth and Income Stock Account for Variable Annuities as of December
31, 1995, the results of its operations for the year then ended, the changes in
its net assets for each of the two years in the period then ended, and the per
unit data for each of the five years in the period then ended, in conformity
with generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Hartford, Connecticut
February 16, 1996

-15-

<PAGE> 18

THE TRAVELERS
QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES

Bond markets rallied significantly in 1995 with yields falling 254 basis points
in the two year treasury to 193 for the thirty year. The Federal Reserve Board
("Fed") punctuated this with their second cut in Funds to 5.50% in December.
In 1995, the fund had a gross return of 16.17% versus 15.31% for the Lehman
Intermediate Government/Corporate Index. This quarter's outperformance in the
portfolio can be attributed to a slightly longer duration than the index and
item selection that avoided sectors that widened significantly. Retailers (the
fund had no exposure here), for instance, were generally wider on continued
poor retail sales numbers and the potential for a bankruptcy filing by Kmart.

The curve exposure for the portfolio is generally neutral to our Lehman
benchmark except for a slight over-weighting in the five year area. We also
maintain an over allocation to corporate product as we expect spreads to
slightly tighten in the first quarter as investors seek spread product. An
effort has also been made to consolidate the portfolio's corporate positions to
enhance the liquidity and help improve performance going forward.

As the new year unfolds we expect the Fed to continue to reduce short term
rates as sluggish growth persists. We will stay flat to slightly long our
benchmark until we perceive either economic rebound or inflationary pressures
developing. Vigilance will be maintained with respect to corporates yet we
expect to maintain our long-run strategy to overweight this area. At this
juncture we are emphasizing the media and utility sectors.

-16-

<PAGE> 19

THE TRAVELERS
QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES

<TABLE>
<CAPTION>
NON-TIMED 12/95 1 YEAR 3 YEAR 5 YEAR
- --------------- ------ ------ ------
<S> <C> <C> <C>
The Travelers Quality Bond Account 14.49 6.5 7.83
Lipper Short Intermediate Investment Grade Debt Categ 12.8 5.45 6.95
</TABLE>

This is a comparison of The Travelers Quality Bond Account versus Lipper
Analytical Services' variable annuity composite index, which provides the
average performance of variable annuity funds with similar objectives as of
December 31, 1995. Lipper Analytical Services is a leading independent
Variable Insurance Product Performance Analysis Service. The performance of
the composite is net of all asset based fees such as mortality and expense
charges and portfolio management fees. Performance reflects the charges
associated with Universal Annuity, which became available on May 16, 1983.
Contracts issued prior to May 16, 1983, have different contract charges that
result in different performance than presented above.

The following is the performance data required by SEC rules governing uniform
performance reporting: one year 9.17%, five year 6.74% and ten year 7.19%.
This performance is based on a $1,000 hypothetical investment and reflects
deductions of all fees and charges including the semi-annual administrative
charge and deferred sales charge.

-17-

<PAGE> 20

THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995

<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (identified cost $171,465,906) $177,553,579
Cash................................................................. 37,260
Receivables:
Interest............................................................ 2,005,670
Purchase payments and transfers from other Travelers accounts....... 95,800
Other assets......................................................... 732
------------
Total Assets....................................................... 179,693,041
------------
LIABILITIES:
Payables:
Contract surrenders and transfers to other Travelers accounts....... 53,512
Investment management and advisory fees............................. 7,967
Accrued liabilities.................................................. 30,012
------------
Total Liabilities.................................................. 91,491
------------
NET ASSETS............................................................ $179,601,550
============
</TABLE>

See Notes to Financial Statements

-18-

<PAGE> 21

THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest.................................................. $11,561,622
EXPENSES:
Investment management and advisory fees................... $ 547,715
Insurance charges......................................... 1,990,477
-----------
Total expenses........................................... 2,538,192
-----------
Net investment income................................... 9,023,430
-----------
REALIZED GAIN AND CHANGE IN UNREALIZED GAIN (LOSS) ON
INVESTMENT SECURITIES:
Realized gain from investment security transactions:
Proceeds from investment securities sold................. 239,670,130
Cost of investment securities sold....................... 238,650,952
-----------
Net realized gain....................................... 1,019,178
Change in unrealized gain (loss) on investment securities:
Unrealized loss at December 31, 1994..................... (6,629,315)
Unrealized gain at December 31, 1995.................... 6,087,673
-----------
Net change in unrealized gain (loss) for the year....... 12,716,988
-----------
Net realized gain and change in unrealized gain (loss). 13,736,166
-----------
Net increase in net assets resulting from operations...... $22,759,596
===========
</TABLE>

See Notes to Financial Statements

-19-

<PAGE> 22

THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income........................................... $ 9,023,430 $ 10,078,150
Net realized gain (loss) from investment security transactions.. 1,019,178 (1,194,328)
Net change in unrealized gain (loss) on investment securities... 12,716,988 (13,194,301)
------------ ------------
Net increase (decrease) in net assets resulting from operations 22,759,596 (4,310,479)
------------ ------------
UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 3,283,550 and 6,301,055 units, respectively).... 15,219,291 27,333,447
Participant transfers from other Travelers accounts
(applicable to 4,374,714 and 5,749,483 units, respectively).... 20,342,504 24,892,067
Administrative charges
(applicable to 30,577 and 36,754 units, respectively).......... (146,591) (157,847)
Contract surrenders
(applicable to 3,514,833 and 4,071,409 units, respectively).... (16,280,761) (17,682,850)
Participant transfers to other Travelers accounts
(applicable to 5,302,454 and 11,082,480 units, respectively)... (24,324,600) (47,893,070)
Other payments to participants
(applicable to 146,460 and 93,315 units, respectively)......... (686,680) (408,660)
------------ ------------
Net decrease in net assets resulting from unit transactions.... (5,876,837) (13,916,913)
------------ ------------
Net increase (decrease) in net assets......................... 16,882,759 (18,227,392)

NET ASSETS:
Beginning of year............................................... 162,718,791 180,946,183
------------ ------------
End of year..................................................... $179,601,550 $162,718,791
============ ============
</TABLE>

See Notes to Financial Statements

-20-

<PAGE> 23

NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The Travelers Quality Bond Account for Variable Annuities ("Account QB") is
a separate account of The Travelers Insurance Company ("The Travelers"), an
indirect wholly owned subsidiary of Travelers Group Inc., and is available
for funding certain variable annuity contracts issued by The Travelers.
Account QB is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company.

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

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

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

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

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

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

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

-21-

<PAGE> 24

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

Security transactions are accounted for on the trade date. Interest income
is recorded on the accrual basis.

2. INVESTMENTS

Purchases and sales of securities other than short-term investments
aggregated $226,088,270 and $214,619,503, respectively, for the year ended
December 31, 1995. Realized gains and losses from security transactions are
reported on an identified cost basis.

Net realized losses resulting from futures contracts were $132,050 for the
year ended December 31, 1994. These losses are included in the net realized
loss from investment security transactions on the Statement of Changes in
Net Assets.

3. CONTRACT CHARGES

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

Insurance charges are paid to The Travelers for the mortality and
expense risks assumed by The Travelers. On contracts issued prior to May
16, 1983, these charges are equivalent to 1.0017% of the average net assets
of Account QB on an annual basis. On contracts issued on or after May 16,
1983, the charges for mortality and expense risks are equivalent to 1.25% of
the average net assets of Account QB on an annual basis. Additionally, for
certain contracts in the accumulation phase, a semi-annual charge of $15
(prorated for partial periods and level of participation in other separate
accounts of The Travelers) is deducted from participant account balances and
paid to The Travelers to cover administrative charges.

On contracts issued prior to May 16, 1983, The Travelers retained from
Account QB sales charges of $20,292 and $30,136 for the years ended December
31, 1995 and 1994, respectively. The Travelers generally assesses a 5%
contingent deferred sales charge if a participant's purchase payment is
surrendered within five years of its payment date. Contract surrender
payments are stated prior to the deduction of $108,615 and $67,230 of
contingent deferred sales charges for the years ended December 31, 1995 and
1994, respectively.

-22-

<PAGE> 25

NOTES TO FINANCIAL STATEMENTS - CONTINUED

4. NET ASSETS HELD BY AFFILIATE

Approximately $755,000 and $722,000 of the net assets of Account QB were
held on behalf of an affiliate of The Travelers as of December 31, 1995
and 1994, respectively. Transactions with this affiliate during the years
ended December 31, 1995 and 1994, were comprised of participant purchase
payments of approximately $17,000 and $50,000, and contract surrenders of
approximately $86,000 and $115,000, respectively.

5. NET CONTRACT OWNERS' EQUITY

DECEMBER 31, 1995
---------------------------------
UNIT NET
UNITS VALUE ASSETS
---------- ------- ------------
<S> <C> <C> <C>
Contracts issued prior to May 16, 1983.............. 9,267,182 $5.050 $ 46,812,722
Annuity Contracts issued prior to May 16, 1983...... 58,236 5.050 294,175
Contracts issued on or after May 16, 1983........... 27,057,043 4.894 132,451,179
Annuity Contracts issued on or after May 16, 1983... 8,881 4.894 43,474
------------
Net Contract Owners' Equity.............................................. $179,601,550
============
</TABLE>

-23-

<PAGE> 26

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

Contracts issued prior to May 16, 1983

FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income............................... $ .328 $ .318 $ .306 $ .317 $ .304
Operating expenses.................................... .063 .059 .058 .050 .048
------- ------- ------- ------- -------
Net investment income................................. .265 .259 .248 .267 .256
Unit value at beginning of year....................... 4.400 4.498 4.150 3.880 3.421
Net realized and change in unrealized gains (losses).. .385 (.357) .100 .003 .203
------- ------- ------- ------- -------
Unit value at end of year............................. $ 5.050 $ 4.400 $ 4.498 $ 4.150 $ 3.880
======= ======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase (decrease) in unit value................. .65 (.10) .35 .27 .46
Ratio of operating expenses to average net assets..... 1.33% 1.33% 1.33% 1.33% 1.33%
Ratio of net investment income to average net assets.. 5.54% 5.87% 5.66% 6.61% 7.09%
Number of units outstanding at end of year (thousands) 9,325 10,694 12,489 13,416 14,629
Portfolio turnover rate............................... 138% 27% 24% 23% 21%
</TABLE>

Contracts issued on or after May 16, 1983

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------------------------------------
1995 1994 1993 1992 1991
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income............................... $ .319 $ .310 $ .299 $ .311 $ .299
Operating expenses.................................... .073 .069 .067 .061 .056
------- ------- ------- ------- -------
Net investment income................................. .246 .241 .232 .250 .243
Unit value at beginning of year....................... 4.274 4.381 4.052 3.799 3.357
Net realized and change in unrealized gains (losses).. .374 (.348) .097 .003 .199
------- ------- ------- ------- -------
Unit value at end of year............................. $ 4.894 $ 4.274 $ 4.381 $ 4.052 $ 3.799
======= ======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase (decrease) in unit value................. .62 (.11) .33 .25 .44
Ratio of operating expenses to average net assets..... 1.57% 1.57% 1.57% 1.58% 1.57%
Ratio of net investment income to average net assets.. 5.29% 5.62% 5.41% 6.38% 6.84%
Number of units outstanding at end of year (thousands) 27,066 27,033 28,472 20,250 17,211
Portfolio turnover rate............................... 138% 27% 24% 23% 21%
</TABLE>

-24-

<PAGE> 27

THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF INVESTMENTS
DECEMBER 31, 1995

<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
----------- -----------
<S> <C> <C>
BONDS (85.9%)
AMUSEMENTS (8.3%)
ITT Corp.,
6.25% Notes, 2000 $ 7,100,000 $ 7,146,683
Six Flags Entertainment,
0.00% Notes, 1999 7,000,000 5,302,500
Time Warner Entertainment, Inc.,
9.625% Notes, 2002 2,000,000 2,317,932
-----------
14,767,115
-----------
AUTO RECEIVABLES (1.1%)
Premier Auto Trust 1995-3,
6.25% Pass Through, 2001 2,000,000 2,035,998
-----------
BANKING (9.4%)
Banponce Financial Corp.,
6.69% Notes, 2000 6,500,000 6,658,535
Fleet Financial Group,
9.90% Notes, 2001 7,000,000 8,239,217
J.P. Morgan & Co.,
0.00% Notes, 1998 2,000,000 1,761,712
-----------
16,659,464
-----------
COMMUNICATION (4.8%)
Tele-Communications, Inc.,
7.31% Notes, 2001 6,500,000 6,763,913
Tele-Communications, Inc.,
9.65% Debentures, 2003 1,500,000 1,696,141
-----------
8,460,054
-----------
COLLATERALIZED MORTGAGE OBLIGATIONS (13.7%)
American Southwest Financial
Corp., 9.00% Pass Through, 2018 683,033 706,693
CFAT,1995-A Certificates,
6.45% Pass Through, 1998 3,000,000 3,027,180
FNMA Remic Trust 1993-13,
6.50% Pass Through, 2000 2,403,238 2,391,291
FNMA Remic Trust 1994-39,
6.35% Pass Through, 2023 2,000,000 2,001,418
FNMA Remic Trust 1994-42,
5.75% Pass Through, 2018 2,500,000 2,472,173
GNMA Backed Trust II,
8.50% Pass Through, 2018 692,607 716,757
Grand Met Investment Corp.,
0.00% Notes, 2004 10,000,000 6,175,560
GS Trust 3D,
8.00% Pass Through, 2014 308,187 313,848
Kidder Peabody Mortgage
Assets Trust 23,
9.88% Pass Through, 2019 816,216 837,543
Oxford Acceptance Corp.,
9.70% Pass Through, 2017 227,192 234,589
PB CMO Trust II,
9.20% Pass Through, 2018 537,394 551,699
Prudential Home Mortgage 1992-17,
8.00% Pass Through, 2007 2,000,000 2,053,278
Residential Funding Mortgage
Securities 1993-MZ3,
6.97% Pass Through, 2023 (A) 2,367,301 2,312,379
Ryland Acceptance Corp.,
9.00% Pass Through, 2015 561,206 578,372
-----------
24,372,780
-----------
</TABLE>

PRINCIPAL MARKET
AMOUNT VALUE
----------- -----------
<S> <C> <C>
CREDIT CARD RECEIVABLES (6.0%)
Chase Manhattan Credit Card
Master Trust,
8.75% Pass Through, 1996 $ 2,100,000 $ 2,129,335
First Chicago Master Trust II,
6.25% Pass Through, 1999 1,650,000 1,670,177
Household Private Label
CC MT 1994-2 B Certificate,
8.00% Pass Through, 2003 3,500,000 3,736,387
MBNA Master
Credit Card Trust, 1992-1,
7.25% Pass Through, 1997 1,000,000 1,024,909
Signet Credit Card
Master Trust,1993-4 B,
5.80% Pass Through, 1999 2,000,000 2,004,218
-----------
10,565,026
-----------
FINANCE (10.7%)
AT&T Capital Corp.,
6.10% Notes, 1998 7,200,000 7,283,124
Equitable Life,
6.95% Notes, 2005 5,000,000 5,062,500
General Motors Acceptance Corp.,
6.625% Notes, 2002 3,500,000 3,604,261
General Motors Acceptance Corp.,
7.75% Notes, 1999 2,000,000 2,112,354
Xerox Credit Corp.,
10.125% Notes, 1999 1,000,000 1,010,575
-----------
19,072,814
-----------
FOOD (2.0%)
Bacardi Martini,
5.75% Notes, 1998 3,620,000 3,615,475
-----------
MISCELLANEOUS MANUFACTURING (2.2%)
Becton Dickinson & Co.,
8.80% Notes, 2001 3,500,000 3,947,528
-----------
PAPER AND
ALLIED PRODUCTS (3.2%)
Champion International Corp.,
9.875% Debentures, 2000 5,000,000 5,757,395
-----------
PETROLEUM REFINING AND
RELATED INDUSTRIES (4.4%)
Hydro Quebec,
8.625% Notes, 2002 3,100,000 3,464,250
Hydro Quebec,
7.375% Debentures, 2003 4,000,000 4,272,436
-----------
7,736,686
-----------
SERVICES (1.8%)
Electronic Data System,
7.125% Notes, 2005 3,000,000 3,200,190
-----------
TRANSPORTATION (2.3%)
American Airlines, Inc. 1993-A4,
6.50% Notes, 1997 1,896,000 1,909,949
Delta Airlines, Inc.,
9.25% Sinking Fund, 2007 (A) 1,910,243 2,125,755
-----------
4,035,704
-----------
</TABLE>

-25-

<PAGE> 28

STATEMENT OF INVESTMENTS - CONTINUED

<TABLE>
<CAPTION>
PRINCIPAL MARKET
AMOUNT VALUE
---------- -------------
<S> <C> <C>
TRANSPORTATION
MANUFACTURING (1.6%)
Ford Motor Co.,
6.27% Notes, 2000 $ 2,863,011 $ 2,863,944
------------
UTILITIES (14.4%)
Boston Edison Co.,
5.95% Debentures, 1998 1,000,000 995,370
DQU II Funding,
7.23% Bonds, 1999 8,272,000 8,543,644
Florida Gas Transmission,
7.75% Notes, 1997 2,500,000 2,586,025
Long Island Lighting Co.,
8.75% Bonds, 1996 1,500,000 1,511,963
NIPSCO Capital Market, Inc.,
0.00% Bonds, 1997 4,500,000 4,045,338
Transco Energy Co.,
9.125% Notes, 1998 4,000,000 4,295,216
United Illuminating Company.,
7.375% Debentures, 1998 3,500,000 3,581,788
------------
25,559,344
------------
TOTAL BONDS
(COST $147,038,183) 152,649,517
------------
U.S. GOVERNMENT
AGENCY SECURITIES (11.2%)

Federal Home Loan
Mortgage Corp., G24 ZC,
5.15% Pass Through, 2012 4,452,013 4,347,387
Federal National
Mortgage Association,
7.55% Notes, 2004 2,500,000 2,611,428
FNMA 30yr Conventional
Long Term,
7.50% Pass Through, 2025 10,670,307 10,943,734
GNMA 30yr Single Family Issue,
7.50% Pass Through, 2023 1,960,001 2,017,576
------------
TOTAL U.S. GOVERNMENT
AGENCY SECURITIES
(COST $19,521,129) 19,920,125
------------
</TABLE>

PRINCIPAL MARKET
AMOUNT VALUE
---------- -------------
<S> <C> <C>
U.S. GOVERNMENT
SECURITIES (2.6%)

United States of America Treasury,
5.50% Notes, 1999 $ 4,500,000 $ 4,530,937
------------
TOTAL U.S. GOVERNMENT
SECURITIES (COST $4,453,594) 4,530,937
------------
SHORT-TERM INVESTMENTS (0.3%)

REPURCHASE AGREEMENTS (0.3%)
Merrill Lynch Government
Securities, Inc., 5.50% Repurchase
Agreement dated December 29,
1995 due January 2, 1996,
collateralized by: United States of
America Treasury, $455,000,
5.63% due October 31, 1997 453,000 453,000
------------
TOTAL SHORT-TERM
INVESTMENTS
(COST $ 453,000) 453,000
------------
TOTAL INVESTMENTS (100%)
(COST $171,465,906) (B) $177,553,579
============
</TABLE>

NOTES

(A) Management Priced Security.

(B) At December 31, 1995, net unrealized appreciation for all securities was
$6,087,673. This consisted of aggregate gross unrealized appreciation for
all securities in which there was an excess of market value over cost of
$6,300,641 and aggregate gross unrealized depreciation for all securities
in which there was an excess of cost over market value of $212,968.

See Notes to Financial Statements

-26-

<PAGE> 29

REPORT OF INDEPENDENT ACCOUNTANTS

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

We have audited the accompanying statement of assets and liabilities of The
Travelers Quality Bond Account for Variable Annuities including the statement
of investments as of December 31, 1995, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and the per unit data for each of the five
years in the period then ended. These financial statements and per unit data
are the responsibility of management. Our responsibility is to express an
opinion on these financial statements and per unit data based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and per unit
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and per unit data referred to above
present fairly, in all material respects, the financial position of The
Travelers Quality Bond Account for Variable Annuities as of December 31, 1995,
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the per unit
data for each of the five years in the period then ended, in conformity with
generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Hartford, Connecticut
February 16, 1996

-27-

<PAGE> 30

THE TRAVELERS
MONEY MARKET ACCOUNT
FOR VARIABLE ANNUITIES

At the outset of 1995, The Federal Reserve's economic theme was declining
inflation and moderate economic growth. Despite no net change in The Federal
Reserve's policy there was a dramatic improvement in market sentiment. The
steady flow of favorable economic data, shifted Federal Reserve policy nearly
180 degrees. Fears of an overheating economy along with an aggressive Federal
Reserve tightening strategy turned into an easing of monetary policy due to
muted price pressures and subdued growth. The Federal Reserve did manage to
stay on course with its policy of moderate growth and low inflation. The
fourth quarter was marked by a 25 basis point reduction in the Federal funds
rate to 5.50%. The Federal Reserve still has more latitude to lower short-term
rates, but the pace of easing will be relatively cautious.

Management's priority is diversification, protection of principal, and
liquidity. Given this objective, we found 30 day maturities provided the best
returns for the Money Market account versus the 45 to 60 day alternatives.
Throughout 1995, the Money Market Account's asset size remained stable at
approximately $76 million with a slight decrease from $83 million at year-end
1994. The average life of the portfolio assets increased slightly from 1994 to
26 days.

Election year 1996 and the possible re-appointment of the current Federal
Reserve Chairman Alan Greenspan should provide the market with some
intangibles. We do maintain that low inflation and moderate growth will be the
cornerstone for a stable and growing economy in 1996.

-28-

<PAGE> 31

THE TRAVELERS
MONEY MARKET ACCOUNT
FOR VARIABLE ANNUITIES

<TABLE>
<CAPTION>
NON-TIMED 12/95 1 YEAR 3 YEAR 5 YEAR
- --------------- ------ ------ ------
<S> <C> <C> <C>
The Travelers Money Market Account 4.44 2.96 3.18
Lipper Money Market Category Average 4.35 2.82 3.14
</TABLE>

This is a comparison of The Travelers Money Market Account versus Lipper
Analytical Services' variable annuity composite index, which provides the
average performance of variable annuity funds with similar objectives as of
December 31, 1995. Lipper Analytical Services is a leading independent
Variable Insurance Product Performance Analysis Service. The performance of
the composite is net of all asset based fees such as mortality and expense
charges and portfolio management fees. Performance reflects the charges
associated with Universal Annuity, which became available on May 16, 1983.
Contracts issued prior to May 16, 1983, have different contract charges that
result in different performance than presented above.

The following is the performance data required by SEC rules governing uniform
performance reporting: one year -0.86%, five year 1.95% and ten year 4.44%.
This performance is based on a $1,000 hypothetical investment and reflects
deductions of all fees and charges including the semi-annual administrative
charge and deferred sales charge.

-29-

<PAGE> 32

THE TRAVELERS MONEY MARKET ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1995

<TABLE>
<S> <C>
ASSETS:
Investment securities, at market value (identified cost $78,016,334) $78,010,508
Receivables:
Interest........................................................... 506,982
Purchase payments and transfers from other Travelers accounts...... 287,249
Other assets........................................................ 222
-----------
Total Assets...................................................... 78,804,961
-----------
LIABILITIES:
Cash overdraft...................................................... 289,043
Payables:
Contract surrenders and transfers to other Travelers accounts...... 247,635
Investment management and advisory fees............................ 3,483
Accrued liabilities................................................. 13,389
-----------
Total Liabilities................................................. 553,550
-----------
NET ASSETS........................................................... $78,251,411
===========
</TABLE>

See Notes to Financial Statements

-30-

<PAGE> 33

THE TRAVELERS MONEY MARKET ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1995

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Interest............................................ $4,662,482

EXPENSES:
Investment management and advisory fees............. $254,985
Insurance charges................................... 980,050
--------
Total expenses..................................... 1,235,035
----------
Net investment income............................. 3,427,447
----------
Net increase in net assets resulting from operations $3,427,447
==========
</TABLE>

See Notes to Financial Statements

-31-

<PAGE> 34

THE TRAVELERS MONEY MARKET ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1994

<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
OPERATIONS:
Net investment income.................................................. $ 3,427,447 $ 2,248,581
----------- -----------
Net increase in net assets resulting from operations.................. 3,427,447 2,248,581
----------- -----------
UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 6,970,794 and 14,485,166 units, respectively).......... 14,864,399 29,698,901
Participant transfers from other Travelers accounts
(applicable to 39,907,908 and 45,192,925 units, respectively)......... 85,226,642 92,615,492
Administrative charges
(applicable to 44,021 and 49,034 units, respectively)................. (94,696) (101,345)
Contract surrenders
(applicable to 5,220,626 and 5,130,779 units, respectively)........... (11,137,360) (10,532,362)
Participant transfers to other Travelers accounts
(applicable to 45,205,495 and 48,771,566 units, respectively)......... (96,405,902) (100,065,788)
Other payments to participants
(applicable to 363,303 and 290,664 units, respectively)............... (782,623) (598,655)
----------- -----------
Net increase (decrease) in net assets resulting from unit transactions (8,329,540) 11,016,243
----------- -----------
Net increase (decrease) in net assets................................ (4,902,093) 13,264,824

NET ASSETS:
Beginning of year...................................................... 83,153,504 69,888,680
----------- -----------
End of year............................................................ $78,251,411 $83,153,504
=========== ===========
</TABLE>

See Notes to Financial Statements

-32-

<PAGE> 35

NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The Travelers Money Market Account for Variable Annuities ("Account MM") is
a separate account of The Travelers Insurance Company ("The Travelers"), an
indirect wholly owned subsidiary of Travelers Group Inc., and is available
for funding certain variable annuity contracts issued by The Travelers.
Account MM is registered under the Investment Company Act of 1940, as
amended, as a diversified, open-end management investment company.

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

SECURITY VALUATION. Short-term investments for which a quoted market price
is available are valued at market. Short-term investments for which there
is no reliable quoted market price are valued by computing a market value
based upon quotations from dealers or issuers for securities of a similar
type, quality and maturity.

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

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

Security transactions are accounted for on the trade date. Interest income
is recorded on the accrual basis.

2. CONTRACT CHARGES

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

Insurance charges are paid to The Travelers for the mortality and expense
risks assumed by The Travelers. On contracts issued prior to May 16, 1983,
these charges are equivalent to 1.0017% of the average net assets of Account
MM on an annual basis. On contracts issued on or after May 16, 1983, the
charges for mortality and expense risks are equivalent to 1.25% of the
average net assets of Account MM on an annual basis. Additionally, for
certain contracts in the accumulation phase, a semi-annual charge of $15
(prorated for partial periods) is deducted from participant account balances
and paid to The Travelers to cover administrative charges.

The Travelers assesses a 5% contingent deferred sales charge if a
participant's purchase payment is surrendered within five years of its
payment date. Contract surrender payments are stated prior to the deduction
of $142,783 and $98,960 of contingent deferred sales charges for the years
ended December, 31 1995 and 1994, respectively.

-33-

<PAGE> 36

NOTES TO FINANCIAL STATEMENTS - CONTINUED

3. NET ASSETS HELD BY AFFILIATE

Approximately $1,816,000 and $485,000 of the net assets of Account MM were
held on behalf of an affiliate of The Travelers as of December 31, 1995 and
1994, respectively. Transactions with this affiliate during the years ended
December 31, 1995 and 1994, were comprised of contract surrenders of
approximately $72,000 and $800,000, respectively. Participant purchase
payments were approximately $965,000 for the year ended December 31, 1995.

4. NET CONTRACT OWNERS' EQUITY

DECEMBER 31, 1995
-----------------------------------------
NET
UNITS UNIT VALUE ASSETS
----- ---------- ------
<S> <C> <C> <C>
Contracts issued prior to May 16, 1983........... 205,781 $2.246 $ 462,401
Contracts issued on or after May 16, 1983........ 35,666,813 2.177 77,671,585
Annuity Contracts issued on or after May 16, 1983 53,922 2.177 117,425
-------------
Net Contract Owners' Equity.............................................. $ 78,251,411
=============
</TABLE>

-34-

<PAGE> 37

NOTES TO FINANCIAL STATEMENTS - CONTINUED

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

Contracts issued prior to May 16, 1983

FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income............................... $.130 $.091 $.067 $.079 $.120
Operating expenses.................................... .030 .028 .027 .027 .026
------ ------ ------ ------ ------
Net investment income................................. .100 .063 .040 .052 .094

Unit value at beginning of year....................... 2.146 2.083 2.043 1.991 1.897
------ ------ ------ ------ ------
Unit value at end of year............................. $2.246 $2.146 $2.083 $2.043 $1.991
====== ====== ====== ====== ======
SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase in unit value............................ .10 .06 .04 .05 .09
Ratio of operating expenses to average net assets..... 1.33 % 1.33 % 1.33 % 1.33 % 1.33 %
Ratio of net investment income to average net assets.. 4.61 % 2.98 % 1.93 % 2.58 % 4.90 %
Number of units outstanding at end of year (thousands) 206 206 218 227 262
</TABLE>

Contracts issued on or after May 16, 1983

<TABLE>
<CAPTION>
FOR THE YEARS ENDED DECEMBER 31,
--------------------------------------------------------------
1995 1994 1993 1992 1991
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA:
Total investment income............................... $.127 $.087 $.065 $.077 $.118
Operating expenses.................................... .034 .032 .031 .031 .030
------ ------ ------ ------ ------
Net investment income................................. .093 .055 .034 .046 .088

Unit value at beginning of year....................... 2.084 2.029 1.995 1.949 1.861
------ ------ ------ ------ ------
Unit value at end of year............................. $2.177 $2.084 $2.029 $1.995 $1.949
====== ====== ====== ====== ======
SIGNIFICANT RATIOS AND ADDITIONAL DATA:
Net increase in unit value............................ .09 .06 .03 .05 .09
Ratio of operating expenses to average net assets..... 1.57 % 1.57 % 1.57 % 1.57 % 1.57 %
Ratio of net investment income to average net assets.. 4.36 % 2.72 % 1.68 % 2.33 % 4.66 %
Number of units outstanding at end of year (thousands) 35,721 39,675 34,227 42,115 55,013
</TABLE>

-35-

<PAGE> 38

THE TRAVELERS MONEY MARKET ACCOUNT
FOR VARIABLE ANNUITIES

STATEMENT OF INVESTMENTS
DECEMBER 31, 1995

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

COMMERCIAL PAPER (97.6%)
ABN AMRO Holdings NV,
5.55% due April 30, 1996 $ 3,000,000 $ 2,999,542
Associates Corp. of North America,
5.87% due February 15, 1996 3,000,000 2,995,647
Bank of Montreal,
5.70% due March 22, 1996 3,000,000 2,948,256
Ciesco LP,
5.61% due February 27, 1996 3,500,000 3,461,480
CIT Group Holdings, Inc.,
5.68% due June 15, 1996 2,000,000 2,029,353
Corp. Receives Corp.,
5.78% due January 17, 1996 3,500,000 3,453,693
Daimler Benz North America Corp.,
5.76% due February 2, 1996 3,500,000 3,464,527
Dresdner U.S. Financial, Inc.,
5.80% due January 22, 1996 3,500,000 3,449,583
General Electric Capital Corp.,
5.54% due May 3, 1996 3,500,000 3,421,583
Hanson PLC,
6.52% due January 15, 1996 3,500,000 3,499,671
J.P. Morgan & Co. Inc.,
5.80% due January 8, 1996 3,500,000 3,481,868
Kingdom of Sweden,
5.71% due March 8, 1996 3,500,000 3,445,737
Morgan Stanley Group, Inc.,
5.81% due January 24, 1996 3,500,000 3,449,482
National Rural Utilities
Cooperative Financial Corp.,
5.72% due February 9,1996 3,500,000 3,462,297
PACCAR Financial Corp.,
5.90% due September 20, 1996 3,500,000 3,497,987
Pearson, Inc.,
5.79% due January 17, 1996 3,600,000 3,579,616
Pitney Bowes Credit Corp.,
5.70% due February 7, 1996 3,500,000 3,463,495
Potomac Electric Power Co.,
5.78% due January 11, 1996 875,000 870,747
Progress Capital Holdings, Inc.,
5.84% due January 18, 1996 3,500,000 3,476,715
PHH Corp.,
5.78% due January 19, 1996 3,900,000 3,871,084
Siemens Corp.,
5.74% due January 22, 1996 1,500,000 1,489,138
Southern California Edison Co.,
5.44% due May 31, 1996 3,500,000 3,417,922
Teco Financial, Inc.,
5.81% due February 9, 1996 3,500,000 3,442,670
Wachovia Bank of North Carolina NA,
5.83% due May 13, 1996 3,500,000 3,503,415
-----------
76,175,508
-----------
<CAPTION>

PRINCIPAL MARKET
AMOUNT VALUE
---------- -----------
<S> <C> <C>
REPURCHASE AGREEMENTS (2.4%)
Merrill Lynch Government
Securities, Inc., 5.50% Repurchase
Agreement dated December 29,
1995 due January 2, 1996,
collateralized by: United States of
America Treasury, $1,845,000,
5.63% due October 31, 1997 $ 1,835,000 $ 1,835,000
-----------

TOTAL INVESTMENTS (100%) $78,010,508
(COST $78,016,334) ===========
</TABLE>

See Notes to Financial Statements

-36-

<PAGE> 39

REPORT OF INDEPENDENT ACCOUNTANTS

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

We have audited the accompanying statement of assets and liabilities of The
Travelers Money Market Account for Variable Annuities including the statement
of investments as of December 31, 1995, and the related statement of operations
for the year then ended, the statement of changes in net assets for each of the
two years in the period then ended, and the per unit data for each of the five
years in the period then ended. These financial statements and per unit data
are the responsibility of management. Our responsibility is to express an
opinion on these financial statements and per unit data based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and per unit
data are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of
December 31, 1995, by correspondence with the custodian. An audit also
includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements and per unit data referred to above
present fairly, in all material respects, the financial position of The
Travelers Money Market Account for Variable Annuities as of December 31, 1995,
the results of its operations for the year then ended, the changes in its net
assets for each of the two years in the period then ended, and the per unit
data for each of the five years in the period then ended, in conformity with
generally accepted accounting principles.

COOPERS & LYBRAND L.L.P.

Hartford, Connecticut
February 16, 1996

-37-

<PAGE> 40

Investment Advisers

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
THE TRAVELERS INVESTMENT MANAGEMENT COMPANY
Hartford, Connecticut

THE TRAVELERS QUALITY BOND AND MONEY MARKET ACCOUNTS
TRAVELERS ASSET MANAGEMENT INTERNATIONAL CORPORATION
Hartford, Connecticut

Independent Accountants

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

Custodian

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

This report is prepared for the general information of contract owners and is
not an offer of shares of The Travelers Growth and Income Stock, Quality Bond
and Money Market Accounts. It should not be used in connection with any offer
except in conjunction with the Universal Annuity Prospectus which contains all
pertinent information, including the applicable sales commissions.

VG-137 (Annual) (12-95) Printed in U.S.A.