TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES, 485BPOS, 2000-04-28

TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
485BPOS, 2000-04-28

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<PAGE> 1
Registration Statement No. 2-53757
811-2571

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post-Effective Amendment No. 47

and/or

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
Amendment No. 47

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
---------------------------------------------------------
(Exact name of Registrant)

THE TRAVELERS INSURANCE COMPANY
-------------------------------
(Name of Insurance Company)

ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183
-----------------------------------------------------------
(Address of Insurance Company's Principal Executive Offices)

Insurance Company's Telephone Number, including Area Code (860) 277-0111
--------------
ERNEST J. WRIGHT
Secretary to the Board of Managers
The Travelers Quality Bond Account for Variable Annuities
One Tower Square
Hartford, Connecticut 06183
---------------------------
(Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: ____________________

It is proposed that this filing will become effective (check appropriate box):

____ immediately upon filing pursuant to paragraph (b) of Rule 485.
__X_ on May 1, 2000 pursuant to paragraph (b) of Rule 485.
____ 60 days after filing pursuant to paragraph (a)(1) of Rule 485.
____ on __________ pursuant to paragraph (a)(1) of Rule 485.
____ 75 days after filing pursuant to paragraph (a)(2).
____ on __________ pursuant to paragraph (a)(2) of Rule 485.

If appropriate check the following box:

____ this post-effective amendment designates a new effective date for a
previously filed post-effective amendment.

<PAGE> 2

PART A

INFORMATION REQUIRED IN A PROSPECTUS

<PAGE> 3

UNIVERSAL ANNUITY
PROSPECTUS
- --------------------------------------------------------------------------------

This prospectus describes Universal Annuity, a flexible premium variable annuity
Contract (the "Contract") issued by The Travelers Insurance Company (the
"Company," "our", "us" or "we").

The Contract's value will vary daily to reflect the investment experience of the
funding options you select and the interest credited to the Fixed (Flexible
Annuity) Account. The variable funding options are:
MANAGED SEPARATE ACCOUNTS

Travelers Growth and Income Stock Account
("Account GIS")
Travelers Money Market Account
("Account MM")
Travelers Quality Bond Account
("Account QB")
Travelers Timed Aggressive Stock Account
("Account TAS")
Travelers Timed Growth and Income Stock Account ("Account TGIS")
Travelers Timed Short-Term Bond Account
("Account TSB")

TRAVELERS FUND U FOR VARIABLE ANNUITIES

Capital Appreciation Fund
Dreyfus Stock Index Fund
High Yield Bond Trust
Managed Assets Trust
AMERICAN ODYSSEY FUNDS, INC.
Core Equity Fund
Emerging Opportunities Fund
Global High-Yield Bond Fund
Intermediate-Term Bond Fund
International Equity Fund
Long-Term Bond Fund
DREYFUS VARIABLE INVESTMENT FUND
Small Cap Portfolio

FRANKLIN TEMPLETON VARIABLE INSURANCE

PRODUCTS TRUST(1)

Templeton Asset Strategy Fund (Class 1)(2)

Templeton Global Income Securities Fund

(Class 1)(3)

Templeton Growth Securities Fund

(Class 1)(4)

TRAVELERS SERIES FUND INC.

Alliance Growth Portfolio
MFS Total Return Portfolio
Putnam Diversified Income Portfolio
Smith Barney High Income Portfolio
Smith Barney International Equity Portfolio
Smith Barney Large Cap Value Portfolio
TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Portfolio
Social Awareness Stock Portfolio
U.S. Government Securities Portfolio
Utilities Portfolio

VARIABLE INSURANCE PRODUCTS FUND (FIDELITY)

Equity Income Portfolio -- Initial Class

Growth Portfolio -- Initial Class

High Income Portfolio -- Initial Class

VARIABLE INSURANCE PRODUCTS FUND II (FIDELITY)

Asset Manager Portfolio -- Initial Class

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

(1) Formerly Templeton Variable Products Series Fund

(2) Formerly offered as Templeton Asset Allocation Fund (Class 1)

(3) Formerly offered as Templeton Bond Fund (Class 1)

(4) Formerly offered as Templeton Stock Fund (Class 1)

The Fixed Account is described in Appendix B. Unless specified otherwise, this
prospectus refers to the variable funding options. The contracts and/or some of
the funding options may not be available in all states. THIS PROSPECTUS IS VALID
ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES FOR THE VARIABLE FUNDING
OPTIONS. READ AND RETAIN THEM FOR FUTURE REFERENCE.

This prospectus provides the information that you should know before investing
in the Contract. You can receive additional information about the Travelers Fund
U for Variable Annuities ("Separate Account") by requesting a copy of the
Statement of Additional Information ("SAI") dated May 1, 2000. The SAI has been
filed with the Securities and Exchange Commission ("SEC") and is incorporated by
reference into this prospectus. To request a copy, write to The Travelers
Insurance Company, Annuity Investor Services, One Tower Square, Hartford,
Connecticut 06183, call 1-800-842-8573 or access the SEC's website
(http://www.sec.gov). See Appendix C for the SAI's table of contents.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OF ANY BANK, AND ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.

PROSPECTUS DATED MAY 1, 2000

<PAGE> 4

TABLE OF CONTENTS

<TABLE>
<S> <C>
Summary......................................... 3
Fee Table....................................... 6
Condensed Financial Information................. 9
The Variable Annuity Contract................... 10
Contract Owner Inquiries...................... 10
Purchase Payments............................. 10
Accumulation Units............................ 10
The Funding Options........................... 11
Charges and Deductions........................ 13
General..................................... 13
Withdrawal Charge........................... 14
Free Withdrawal Allowance................... 15
Administrative Charge....................... 15
Mortality and Expense Risk Charge........... 16
Funding Option Expenses..................... 16
Premium Tax................................. 16
Tactical Asset Allocation Services Fees..... 16
Managed Separate Account: Management and
Fees...................................... 16
Transfers..................................... 17
Dollar-Cost Averaging....................... 18
Asset Allocation Advice..................... 19
Tactical Asset Allocation Services............ 19
Tactical Asset Allocation Risks............. 19
Access to your Money.......................... 20
Systematic Withdrawals...................... 20
Ownership Provisions.......................... 21
Types of Ownership.......................... 21
Contract Owner............................ 21
Beneficiary............................... 21
Annuitant................................. 21
Death Benefit................................. 22
Death Proceeds Before the Maturity Date..... 22
Payment of Proceeds......................... 22
Death Proceeds after the Maturity Date...... 24
The Annuity Period.............................. 24
Maturity Date............................... 24
Allocation of Annuity....................... 24
Variable Annuity............................ 25
Fixed Annuity............................... 25
Payment Options............................... 25
Election of Options......................... 25
Annuity Options............................. 26
Income Options.............................. 27
Miscellaneous Contract Provisions............... 27
Right to Return............................. 27
Termination of Individual Contract.......... 28
Termination of Group Contract or Account.... 28
Distribution from One Account to Another.... 29
Required Reports............................ 29
Change of Contract.......................... 29
Assignment.................................. 29
Suspension of Payments...................... 30
Other Information............................... 30
The Insurance Company....................... 30
Financial Statements........................ 30
IMSA........................................ 30
Distribution of Variable Annuity
Contracts................................. 30
Conformity with State and Federal Laws...... 30
Voting Rights............................... 31
Legal Proceedings and Opinions.............. 31
The Separate Accounts........................... 32
Performance Information..................... 33
Federal Tax Considerations...................... 33
General Taxation of Annuities............... 33
Types of Contracts: Qualified or
Nonqualified.............................. 34
Nonqualified Annuity Contracts.............. 34
Qualified Annuity Contracts................. 34
Penalty Tax for Premature Distributions..... 35
Diversification Requirements................ 35
Ownership of the Investments................ 35
Mandatory Distributions for Qualified
Plans..................................... 35
Taxation of Death Benefit Proceeds.......... 36
Managed Separate Accounts....................... 36
The Travelers Growth and Income Stock Account... 37
The Travelers Quality Bond Account.............. 38
The Travelers Money Market Account.............. 39
The Travelers Timed Growth and Income Stock
Account....................................... 41
The Travelers Timed Short-Term Bond Account..... 41
The Travelers Timed Aggressive Stock Account.... 43
The Travelers Timed Bond Account................ 44
Investments, Practices and Risks of the Managed
Separate Accounts............................. 45
Investments at a Glance......................... 48
Appendix A (Condensed Financial Information).... A-1
Appendix B (The Fixed Account).................. B-1
Appendix C (Contents of Statement of Additional
Information).................................. C-1
</TABLE>

INDEX OF SPECIAL TERMS

The following terms are italicized throughout the prospectus. Refer to the page
listed for an explanation of each term.

<TABLE>
<S> <C>
Accumulation Unit............................... 10
Accumulation Period............................. 10
Annuitant....................................... 21
Annuity Payments................................ 10
Annuity Unit.................................... 10
Cash Surrender Value............................ 20
Cash Value...................................... 10
Contingent Annuitant............................ 21
Contract Date................................... 10
Contract Owner (You, Your)...................... 10
Contract Value.................................. 10
Contract Year................................... 10
Fixed Account................................... B-1
Funding Option(s)............................... 11
Income Payments................................. 10
Individual Account.............................. 10
Joint Owner..................................... 21
Managed Separate Account........................ 16
Maturity Date................................... 24
Owner........................................... 21
Participant's Interest.......................... 10
Purchase Payment................................ 10
Underlying Fund................................. 11
Written Request................................. 10
</TABLE>

2
<PAGE> 5

SUMMARY:
TRAVELERS UNIVERSAL ANNUITY

THIS SUMMARY DETAILS SOME OF THE MORE IMPORTANT POINTS THAT YOU SHOULD KNOW AND
CONSIDER BEFORE PURCHASING THE CONTRACT. PLEASE READ THE ENTIRE PROSPECTUS
CAREFULLY.

CAN YOU GIVE ME A GENERAL DESCRIPTION OF THE VARIABLE ANNUITY CONTRACT? The
Contract offered by the Travelers Insurance Company is intended for retirement
savings or other long-term investment purposes. The Contract provides a death
benefit as well as guaranteed payout options. You direct your payment(s) to one
or more of the variable funding options and/or to the Fixed Account. We
guarantee money directed to the Fixed Account as to principal and interest. The
variable funding options are designed to produce a higher rate of return than
the Fixed Account; however, this is not guaranteed. You can also lose money in
the variable funding options.

The Contract, like all deferred variable annuity contracts, has two phases: the
accumulation phase and the payout phase. During the accumulation phase
generally, under a qualified contract, your pre-tax contributions accumulate on
a tax-deferred basis and are taxed as income when you make a withdrawal,
presumably when you are in a lower tax bracket. During the accumulation phase,
under a nonqualified contract, earnings on your after-tax contributions
accumulate on a tax-deferred basis and are taxed as income when you make a
withdrawal. The payout phase occurs when you begin receiving payments from your
Contract. The amount of money you accumulate in your Contract determines the
amount of income (annuity payments) you receive during the payout phase.

During the payout phase, you may choose to receive annuity payments from the
Fixed Account or the variable funding options. If you want to receive payments
from your annuity, you can choose one of a number of annuity options or income
options.

Once you choose one of the annuity options or income options and begin to
receive payments, it cannot be changed. During the payout phase, you have the
same investment choices you had during the accumulation phase. If amounts are
directed to the variable funding options, the dollar amount of your payments may
increase or decrease.

WHO SHOULD PURCHASE THIS CONTRACT? The Contract is currently available for use
in connection with (1) individual nonqualified purchases; (2) Individual
Retirement Annuities (IRA) or IRA Rollovers pursuant to Section 408 of the
Internal Revenue Code of 1986, as amended; and (3) qualified retirement plans
("Plan") (which include contracts qualifying under Section 401(a), 403(b),
408(b) or 457 of the Internal Revenue Code. Purchase of this Contract through a
Plan does not provide any additional tax deferral benefits beyond those provided
by the Plan. Accordingly, if you are purchasing this Contract through a Plan,
you should consider purchasing the Contract for its Death Benefit, Annuity
Option Benefits or other non-tax related benefits.

You may purchase a qualified Contract with an initial payment of at least $20,
except in the case of an IRA, for which the minimum initial payment is $1,000.
Under a qualified Contract, you may make additional payments of at least $20.
For nonqualified Contracts, the minimum initial purchase payment is $1,000, and
$100 thereafter.

WHO IS THE CONTRACT ISSUED TO? If you purchase an individual Contract, you are
the contract owner. If a group "allocated" contract is purchased, we issue
certificates to the individual participants. Where we refer to "you," we are
referring to the individual contract owner, or to the group participant, as
applicable. For convenience, we refer to both contracts and certificates as
"Contracts."

We issue group contracts in connection with retirement plans. Depending on your
retirement plan provisions, certain features and/or funding options described in
this prospectus may not be available to you (for example, dollar-cost averaging,
(the CHART program, etc.). Your retirement

3
<PAGE> 6

plan provisions supercede the prospectus. If you have any questions about your
specific retirement plan, contact your plan administrators.

IS THERE A RIGHT TO RETURN PERIOD? If you cancel the Contract within ten days
after you receive it, you will receive a full refund of the contract value
(including charges). Where state law requires a longer right to return period,
or the return of purchase payments, the Company will comply. You bear the
investment risk on the purchase payment during the right to return period;
therefore, the Contract value returned may be greater or less than your purchase
payment.

If the Contract is purchased as an Individual Retirement Annuity, and is
returned within the first seven days after delivery, your full purchase payment
will be refunded. During the remainder of the right to return period, the
Contract value (including charges) will be refunded. The Contract value will be
determined at the close of business on the day we receive a written request for
a refund.

WHAT TYPES OF INVESTMENT OPTIONS ARE AVAILABLE? You can direct your money into
the Fixed Account or any or all of the funding options shown on the cover page.
The funding options are described in the prospectuses for the funds. Depending
on market conditions, you may make or lose money in any of these options.

The value of the Contract will vary depending upon the investment performance of
the funding options you choose. Past performance is not a guarantee of future
results. Standard and Nonstandard performance is shown in the Statement of
Additional Information that you may request free of charge.

You can transfer between the funding options as frequently as you wish without
any current tax implications. Currently there is no charge for transfers, nor a
limit to the number of transfers allowed. We may, in the future, charge a fee
for any transfer request, or limit the number of transfers allowed. At a
minimum, we would always allow one transfer every six months. We reserve the
right to restrict transfers that we determine will disadvantage other contract
owners. You may transfer between the Fixed Account and the funding options twice
a year (during the 30 days after the six-month contract date anniversary),
provided the amount is not greater than 15% of the Fixed Account Value on that
date.

WHAT EXPENSES WILL BE ASSESSED UNDER THE CONTRACT? The Contract has insurance
features and investment features, and there are costs related to each. For each
contract we deduct a semiannual administrative charge of $15. The annual
insurance charge is 1.25% of the amounts you direct to the variable funding
options. Each funding option also charges for management, any applicable asset
allocation fee and other expenses. Please refer to the Fee Table for more
information about the charges.

If you withdraw amounts from the Contract, we may deduct a withdrawal charge.
The charge equals 5% of each purchase payment if withdrawn within 5 years of the
payment date. If you withdraw all amounts under the Contract, or if you begin
receiving annuity/income payments, the Company may be required by your state to
deduct a premium tax.

HOW WILL MY CONTRIBUTIONS AND WITHDRAWALS BE TAXED? Generally, the payments you
make to a qualified Contract during the accumulation phase are made with
before-tax dollars. You will be taxed on your purchase payments and on any
earnings when you make a withdrawal or begin receiving annuity or income
payments. Under a nonqualified Contract, payments to the contract are made with
after-tax dollars, and any credits and earnings will accumulate tax-deferred.
You will be taxed on these earnings when they are withdrawn from the Contract.

For owners of qualified Contracts, if you reach a certain age, you may be
required by federal tax laws to begin receiving payments from your annuity or
risk paying a penalty tax. In those cases, we can calculate and pay you the
minimum required distribution amounts. If you are younger than 59 1/2 when you
take money out, you may be charged a 10% federal penalty tax on the amount
withdrawn.

4
<PAGE> 7

HOW MAY I ACCESS MY MONEY? You can take withdrawals any time during the
accumulation phase. Withdrawal charges, income taxes, and/or a penalty tax may
apply to taxable amounts withdrawn.

WHAT IS THE DEATH BENEFIT UNDER THE CONTRACT? The death benefit applies upon
the first death of the owner, joint owner or annuitant. Assuming you are the
annuitant, if you die before you move to the income phase, the person you have
chosen as your beneficiary will receive a death benefit. The death benefit paid
depends on your age at the time of your death. The death benefit is calculated
as of the close of the business day on which the Company's Home Office receives
due proof of death.

Any amount paid will be reduced by any applicable premium tax, outstanding loans
or surrenders not previously deducted. Certain states may have varying age
requirements. Please refer to the Death Benefit section of the prospectus for
more details.

ARE THERE ANY ADDITIONAL FEATURES? This Contract has other features you may be
interested in. These include:

- DOLLAR COST AVERAGING. This is a program that allows you to invest a
fixed amount of money in funding options each month, theoretically
giving you a lower average cost per unit over time than a single
one-time purchase. Dollar Cost Averaging requires regular investments
regardless of fluctuating price levels, and does not guarantee profits
or prevent losses in a declining market. Potential investors should
consider their financial ability to continue purchases through periods
of low price levels.

- TACTICAL ASSET ALLOCATION PROGRAM. If allowed, you may elect to enter
into a separate Tactical Asset Allocation services agreement with
registered investment advisers who provide Tactical Asset Allocation
services. These agreements permit the registered investment advisers
to act on your behalf by transferring all or a portion of the cash
value from one Market Timed Account to another. The registered
investment advisers can transfer funds only from one Market Timed
Account to another Market Timed Account. Purchase payments are
allocated to the following funding options when you participate in the
Tactical Asset Allocation Program: Travelers Timed Growth and Income
Stock Account; Travelers Timed Short-Term Bond Account and Travelers
Timed Aggressive Stock Account. The Tactical Asset Allocation Program
and applicable fees are fully described in a separate Disclosure
Statement.

- ASSET ALLOCATION ADVICE. If allowed, you may elect to enter into a
separate advisory agreement with Copeland Financial Services, LLC
("Copeland"), an affiliate of the Company, for the purpose of
receiving asset allocation advice under Copeland's CHART Program. The
CHART Program allocates all purchase payments among the American
Odyssey Funds. The CHART Program and applicable fees are fully
described in a separate disclosure statement.

5
<PAGE> 8

FEE TABLE
- --------------------------------------------------------------------------------
ACCOUNTS GIS, QB, MM, TGIS, TSB, TAS AND TB
FUND U AND ITS UNDERLYING FUNDS

CONTRACT CHARGES AND EXPENSES

<TABLE>
<S> <C>
CONTINGENT DEFERRED SALES CHARGE (as a percentage of
purchase payments withdrawn)
If withdrawn within 5 years after the purchase
payment is made...................................... 5.00%
If withdrawn 5 or more years after the purchase
payment is made...................................... 0%
SEMIANNUAL CONTRACT ADMINISTRATIVE CHARGE.............. $15
ANNUAL SEPARATE ACCOUNT EXPENSES
MORTALITY AND EXPENSE RISK CHARGE (as a percentage of
average net assets of
Managed Separate Accounts and Fund U)............... 1.25%
FUNDING OPTION EXPENSES:
(as a percentage of average daily net assets of the funding option
as of December 31, 1999, unless otherwise noted.)
</TABLE>

<TABLE>
<CAPTION>
MANAGEMENT MARKET ANNUAL
INVESTMENT ALTERNATIVE FEE TIMING FEE(1) EXPENSES(2)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
MANAGED SEPARATE ACCOUNTS
Travelers Growth and Income Stock Account for
Variable Annuities (GIS)....................... 0.60% 0.60%
Travelers Money Market Account for Variable
Annuities (MM)................................. 0.32% 0.32%
Travelers Quality Bond Account for Variable
Annuities (QB)................................. 0.32% 0.32%
Travelers Timed Aggressive Stock Account for
Variable Annuities (TAS)....................... 0.35% 1.25% 1.60%
Travelers Timed Bond Account for Variable
Annuities (TB)*................................ 0.50% 1.25% 1.75%
Travelers Timed Growth and Income Stock for
Variable Annuities (TGIS)...................... 0.32% 1.25% 1.57%
Travelers Timed Short-Term Bond Account for
Variable Annuities (TSB)....................... 0.32% 1.25% 1.57%
</TABLE>

<TABLE>
<CAPTION>
TOTAL
ANNUAL OPERATING
MANAGEMENT FEE OTHER EXPENSES EXPENSES
(AFTER EXPENSE (AFTER EXPENSE (AFTER EXPENSE
REIMBURSEMENT) REIMBURSEMENT) REIMBURSEMENT)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
UNDERLYING FUNDING OPTIONS
Capital Appreciation Fund............................ 0.75% 0.08% 0.83%
Dreyfus Stock Index Fund............................. 0.25% 0.01% 0.26%
High Yield Bond Trust................................ 0.50% 0.31% 0.81%
Managed Assets Trust................................. 0.50% 0.10% 0.60%
AMERICAN ODYSSEY FUNDS, INC.
Core Equity Fund................................. 0.56% 0.08% 0.64%
Emerging Opportunities Fund...................... 0.75% 0.12% 0.87%
Global High-Yield Bond Fund...................... 0.67% 0.16% 0.83%
Intermediate-Term Bond Fund...................... 0.49% 0.10% 0.59%
International Equity Fund........................ 0.59% 0.13% 0.72%
Long-Term Bond Fund.............................. 0.50% 0.10% 0.60%
AMERICAN ODYSSEY FUNDS, INC.**
Core Equity Fund................................. 0.56% 1.33% 1.89%
Emerging Opportunities Fund...................... 0.75% 1.37% 2.12%
Global High-Yield Bond Fund...................... 0.67% 1.41% 2.08%
Intermediate-Term Bond Fund...................... 0.49% 1.35% 1.84%
International Equity Fund........................ 0.59% 1.38% 1.97%
Long-Term Bond Fund.............................. 0.50% 1.35% 1.85%
DREYFUS VARIABLE INVESTMENT FUND
Small Cap Portfolio.............................. 0.75% 0.03% 0.78%
</TABLE>

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<PAGE> 9

<TABLE>
<CAPTION>
TOTAL
ANNUAL OPERATING
MANAGEMENT FEE OTHER EXPENSES EXPENSES
(AFTER EXPENSE (AFTER EXPENSE (AFTER EXPENSE
REIMBURSEMENT) REIMBURSEMENT) REIMBURSEMENT)
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST
Templeton Asset Strategy Fund - Class 1 (formerly
offered as Templeton Asset Allocation Fund).... 0.60% 0.18% 0.78%(3)
Templeton Global Income Securities Fund - Class 1
(formerly offered as Templeton Bond Fund)...... 0.60% 0.05% 0.65%(4)
Templeton Growth Securities Fund - Class 1
(formerly offered as Templeton Stock Fund)..... 0.83% 0.05% 0.88%(5)
TRAVELERS SERIES FUND INC.
Alliance Growth Portfolio........................ 0.80% 0.02% 0.82%(6)
INVESCO Strategic Income Portfolio* (formerly
G.T. Global Strategic Income Portfolio)........ 0.80% 0.33% 1.13%(6)
MFS Total Return Portfolio....................... 0.80% 0.04% 0.84%(6)
Putnam Diversified Income Portfolio.............. 0.75% 0.08% 0.83%(6)
Smith Barney High Income Portfolio............... 0.60% 0.06% 0.66%(6)
Smith Barney International Equity Portfolio...... 0.90% 0.10% 1.00%(6)
Smith Barney Large Cap Value Portfolio........... 0.65% 0.02% 0.67%(6)
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Portfolio.............. 0.70% 0.25% 0.95%(7)
Social Awareness Stock Portfolio................. 0.64% 0.16% 0.80%
U.S. Government Securities Portfolio............. 0.32% 0.16% 0.48%
Utilities Portfolio.............................. 0.65% 0.23% 0.88%
VARIABLE INSURANCE PRODUCTS FUND
Equity-Income Portfolio - Initial Class.......... 0.48% 0.08% 0.56%(8)
Growth Portfolio - Initial Class................. 0.58% 0.07% 0.65%(8)
High Income Portfolio - Initial Class............ 0.58% 0.11% 0.69%
VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Portfolio - Initial Class.......... 0.53% 0.09% 0.62%(8)
</TABLE>

NOTES:

The purpose of this Fee Table is to help you understand the various costs and
expenses that you will bear, directly or indirectly, under the Contract. The
information, except as noted, reflects expenses of the managed separate accounts
as well as Fund U and its funding options for the fiscal year ending December
31, 1999. For additional information, including possible waivers or reductions
of these expenses, see "Charges and Deductions." Expenses shown do not include
premium taxes, which may apply. "Other Expenses" include operating costs of the
separate account or fund. These expenses are reflected in each Fund's net asset
value and are not deducted from the account value under the Contract.

* Not available to new Contract Owners.

** Includes 1.25% CHART asset allocation fee.

(1) Contract Owners may discontinue tactical asset allocation services at any
time and thereby avoid any subsequent fees for those services by
transferring to a non-timed account.

(2) These figures do not include the mortality and expense risk fee which is
deducted from the daily unit values of the separate account.

(3) On 2/8/00, fund shareholders approved a merger and reorganization to merge
the assets of TEMPLETON GLOBAL ASSET ALLOCATION FUND into TEMPLETON ASSET
ALLOCATION FUND (which then changed its name to TEMPLETON ASSET STRATEGY
FUND), effective 5/1/00. The table shows restated total expenses based upon
the new fees and assets of Templeton Asset Allocation Fund as of 12/31/99,
and not the assets of the combined fund on 5/1/00. However if the table
reflected both the new fees and the combined assets, the fund's expenses
after 5/1/00 would be estimated as: Management Fees 0.60%, Other expenses
0.14% and Total Fund Operating Expenses 0.74%.

(4) On 2/8/00, a merger and reorganization was approved to merge the assets of
TEMPLETON BOND FUND into TEMPLETON GLOBAL INCOME SECURITIES FUND, effective
5/1/00. The above table shows restated total expenses based upon the fees
and assets of TEMPLETON GLOBAL INCOME SECURITIES FUND as of 12/31/99, and
not the assets of the combined fund on 5/1/00. However if the table
reflected the combined assets, the fund's expenses after 5/1/00 would be
estimated as: Management Fees 0.60%, Other expenses 0.04% and Total Fund
Operating Expenses 0.64%. The Fund's administration fee is paid indirectly
through the management fee.

(5) On 2/8/00, a merger and reorganization was approved to merge the assets of
TEMPLETON STOCK FUND into TEMPLETON GLOBAL GROWTH FUND (which then changed
its name to TEMPLETON GROWTH SECURITIES FUND), effective 5/1/00. The above
table shows restated total expenses based upon the fees and assets of
TEMPLETON GLOBAL GROWTH FUND as of 12/31/99, and not the assets of the
combined fund on 5/1/00. However if the table reflected the combined assets,
the fund's expenses after 5/1/00 would be estimated as: Management Fees
0.80%, Other expenses 0.05% and Total Fund Operating Expenses 0.85%. The
Fund's administration fee is paid indirectly through the management fee.

7
<PAGE> 10

(6) Expenses are as of October 31, 1999 (the Fund's fiscal year end). There were
no fees waived or expenses reimbursed for these funds in 1999.

(7) Other Expenses reflect the current expense reimbursement arrangement with
Travelers Insurance Company. Travelers has agreed to reimburse the Portfolio
for the amount by which their aggregate expenses (including management fees,
but excluding brokerage commissions, interest charges and taxes) exceeds
0.95%. Without such arrangements, the Total Annual Operating Expenses for
the Portfolio would have been 0.99% for the DISCIPLINED MID CAP STOCK
PORTFOLIO.

(8) A portion of the brokerage commissions that certain funds pay was used to
reduce fund expenses. In addition, through arrangements with certain funds,
or FMR on behalf of certain funds, custodian, credits realized as a result
of uninvested cash balances were used to reduce a portion of each applicable
fund 's expenses. Without these reductions, the total operating expenses
presented in the table would have been 0.57% for EQUITY-INCOME PORTFOLIO,
0.66% for GROWTH PORTFOLIO, and 0.63% for ASSET MANAGER PORTFOLIO.

8
<PAGE> 11

EXAMPLE*

Assuming a 5% annual return on assets, a $1,000 investment would be subject to
the following expenses:

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

<TABLE>
<CAPTION>
IF CONTRACT IS SURRENDERED AT THE IF CONTRACT IS NOT SURRENDERED OR
END OF PERIOD SHOWN ANNUITIZED AT END OF PERIOD SHOWN:
------------------------------------- -------------------------------------
INVESTMENT ALTERNATIVE 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MANAGED SEPARATE ACCOUNTS
Account GIS.......................... $70 $112 $156 $229 $20 $ 62 $106 $229
Account MM........................... 67 103 141 199 17 53 91 199
Account QB........................... 67 103 141 199 17 53 91 199
Account TAS.......................... 80 142 206 328 30 92 156 328
Account TB**......................... 81 146 213 342 31 96 163 342
Account TGIS......................... 80 141 204 325 30 91 154 325
Account TSB.......................... 80 141 204 325 30 91 154 325
UNDERLYING FUNDING OPTIONS
Capital Appreciation Fund............... 72 119 168 253 22 69 118 253
Dreyfus Stock Index Fund................ 66 101 138 192 16 51 88 192
High Yield Bond Trust................... 72 118 167 251 22 68 117 251
Managed Assets Trust.................... 70 112 156 229 20 62 106 229
AMERICAN ODYSSEY FUNDS, INC.(1)
Core Equity Fund..................... 70 113 158 233 20 63 108 233
Emerging Opportunities Fund.......... 73 120 170 257 23 70 120 257
Global High-Yield Bond Fund.......... 72 119 168 253 22 69 118 253
Intermediate-Term Bond Fund.......... 70 111 155 228 20 61 105 228
International Equity Fund............ 71 115 162 241 21 65 112 241
Long-Term Bond Fund.................. 70 112 156 229 20 62 106 229
AMERICAN ODYSSEY FUNDS, INC.(2)
Core Equity Fund..................... 83 150 220 355 33 100 170 355
Emerging Opportunities Fund.......... 85 157 231 376 35 107 181 376
Global High-Yield Bond Fund.......... 85 156 229 372 35 106 179 372
Intermediate-Term Bond Fund.......... 82 149 217 351 32 99 167 351
International Equity Fund............ 84 152 224 362 34 102 174 362
Long-Term Bond Fund.................. 82 149 218 351 32 99 168 351
DREYFUS VARIABLE INVESTMENT FUND
Small Cap Portfolio.................. 72 117 165 247 22 67 115 247
FRANKLIN TEMPLETON VARIABLE INSURANCE
PRODUCTS TRUST
Templeton Asset Strategy Fund - Class
1.................................. 72 117 165 247 22 67 115 247
Templeton Global Income Securities
Fund - Class 1..................... 70 113 158 234 20 63 108 233
Templeton Growth Securities Fund -
Class 1............................ 73 120 170 258 23 70 120 258
TRAVELERS SERIES FUND INC.
Alliance Growth Portfolio............ 72 118 167 252 22 68 117 252
INVESCO Strategic Income
Portfolio**........................ 75 128 183 283 25 78 133 283
MFS Total Return Portfolio........... 72 119 168 254 22 69 118 254
Putnam Diversified Income
Portfolio.......................... 72 119 168 253 22 69 118 253
Smith Barney High Income Portfolio... 71 113 159 235 21 63 109 235
Smith Barney International Equity
Portfolio.......................... 74 124 176 270 24 74 126 270
Smith Barney Large Cap Value
Portfolio.......................... 71 114 159 236 21 64 109 236
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock
Portfolio.......................... 73 122 174 265 23 72 124 265
Social Awareness Stock Portfolio..... 72 118 166 250 22 68 116 250
U.S. Government Securities
Portfolio.......................... 69 108 150 216 19 58 100 216
Utilities Portfolio.................. 73 120 170 258 23 70 120 258
VARIABLE INSURANCE PRODUCTS FUND
Equity-Income Portfolio - Initial
Class.............................. 70 110 154 225 20 60 104 225
Growth Portfolio - Initial Class..... 70 113 158 234 20 63 108 234
High Income Portfolio - Initial
Class.............................. 71 114 160 238 21 64 110 238
VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Portfolio - Initial
Class.............................. 70 112 157 231 20 62 107 231
</TABLE>

* THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. THE
EXAMPLE REFLECTS THE $15 SEMIANNUAL CONTRACT FEE AS AN ANNUAL CHARGE OF
0.1125% OF ASSETS.

** Not currently available to new Contract Owners.

(1) Reflects expenses that would be incurred for those Contract Owners who DO
NOT participate in the CHART Asset Allocation Program.

(2) Reflects expenses that would be incurred for those Contract Owners who DO
participate in the CHART Asset Allocation Program.

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

See Appendix A.

9
<PAGE> 12

THE ANNUITY CONTRACT
- --------------------------------------------------------------------------------

Travelers Universal Annuity is a contract between the contract owner ("you"),
and The Travelers Insurance Company (called "us" or the "Company"). You make
purchase payments to us and we credit them to your Contract. The Company
promises to pay you an income, in the form of annuity or income payments,
beginning on a future date that you choose, the maturity date. The purchase
payments accumulate tax deferred in the funding options of your choice. We offer
multiple variable funding options, and one fixed account option. The contract
owner assumes the risk of gain or loss according to the performance of the
variable funding options. The cash value is the amount of purchase payments,
plus or minus any investment experience or interest. The contract value also
reflects all surrenders made and charges deducted. There is generally no
guarantee that at the maturity date the cash value will equal or exceed the
total purchase payments made under the Contract. The date the contract and its
benefits become effective is referred to as the contract date. Each 12-month
period following the contract date is called a contract year. The record of
accumulation units credited to an owner is called the owner's account. The
record of accumulation units credited to an owner is called the individual
account or participant's interest.

Certain changes and elections must be made in writing to the Company. Where the
term "written request" is used, it means that written information must be sent
to the Company's Home Office in a form and content satisfactory to us.

CONTRACT OWNER INQUIRIES

Any questions you have about your Contract should be directed to the Company's
Home Office at 1-800-842-8573.

PURCHASE PAYMENTS

The initial purchase payment must be paid before the Contract becomes effective.

Minimum purchase payment amounts are:
- IRAs: $1,000
- Other tax-qualified retirement plans: $20 per participant (subject to plan
requirements)
- Nonqualified contracts: $1,000; minimum of $100 for subsequent payment

We will apply the initial purchase payment within two business days after we
receive it in good order at our Home Office. Subsequent purchase payments
received in good order will be credited within one business day, if received in
good order by our Home Office by 4:00 p.m. Eastern time. A business day is any
day that the New York Stock Exchange is open. Our business day ends at 4:00 p.m.
Eastern time, unless we need to close earlier due to an emergency.

ACCUMULATION UNITS

The period between the contract effective date and the maturity date is the
accumulation period. During the accumulation period, an accumulation unit is
used to calculate the value of a Contract. An accumulation unit works like a
share of a mutual fund. Each funding option has a corresponding accumulation
unit value. The accumulation units are valued each business day and their values
may increase or decrease from day to day. The number of accumulation units we
will credit to your Contract once we receive a purchase payment is determined by
dividing the amount directed to each funding option by the value of its
accumulation unit. We calculate the value of an accumulation unit for each
funding option each day the New York Stock Exchange is open. The values are
calculated as of 4:00 p.m. Eastern time. After the value is calculated, we
credit your Contract. During the annuity period (i.e., after the maturity date),
you are credited with annuity units.

10
<PAGE> 13

THE FUNDING OPTIONS

You choose which of the following variable funding options to have your purchase
payments allocated to. These include the managed separate accounts and the
subsections of the Separate Account, which invest in the underlying mutual funds
("underlying funds"). You will find detailed information about the options and
their inherent risks in the current prospectuses for the funding options which
must accompany this prospectus. You are not investing directly in the underlying
fund. Since each option has varying degrees of risk, please read the
prospectuses carefully before investing. Contact your registered representative
or call 1-800-842-8573 to request additional copies of the prospectuses.

If any of the funding options becomes unavailable for allocating purchase
payments, or if we believe that further investment in a funding option is
inappropriate for the purposes of the Contract, we may substitute another
funding option. However, we will not make any substitutions without notifying
you and obtaining any state and SEC approval, if necessary. From time to time we
may make new funding options available.

The current variable funding options are listed below, along with their
investment advisers and any subadviser:

11
<PAGE> 14

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
INVESTMENT INVESTMENT INVESTMENT
OPTIONS OBJECTIVE ADVISER/SUBADVISER
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
AMERICAN ODYSSEY FUNDS, INC.
Core Equity Fund Seeks maximum long-term total return by investing American Odyssey Funds
primarily in common stocks of well-established Management, Inc.
companies. Subadvisers: Equinox
Capital Management, LLC;
Putnam Investment
Management Inc.; and State
Street Global Advisors.
Emerging Opportunities Seeks maximum long-term total return by investing American Odyssey Funds
Fund primarily in common stocks of small, rapidly growing Management, Inc.
companies. Subadvisers: SG Cowen
Asset Management;
Chartwell Investment
Partners; and State Street
Global Advisors.
Global High-Yield Bond Seeks maximum long-term total return (capital American Odyssey Funds
Fund appreciation and income) by investing primarily in Management, Inc.
high-yield debt securities from the United States and Subadviser: Credit Suisse
abroad. Asset Management
Intermediate-Term Bond Seeks maximum long-term total return by investing American Odyssey Funds
Fund primarily in intermediate-term corporate debt Management, Inc.
securities, U.S. government securities, mortgage-related Subadviser: TAMIC
securities and asset-backed securities, as well as money
market instruments.
International Equity Fund Seeks maximum long-term total return by investing American Odyssey Funds
primarily in common stocks of established non-U.S. Management, Inc.
companies. Subadviser: Bank of
Ireland Asset Management
(U.S.) Limited
Long-Term Bond Fund Seeks maximum long-term total return by investing American Odyssey Funds
primarily in long-term corporate debt securities, U.S. Management, Inc.
government securities, mortgage-related securities, and Subadviser: Western Asset
asset-backed securities, as well as money market Management Company
instruments.
DREYFUS VARIABLE INVESTMENT FUND
Small Cap Portfolio Seeks to maximize capital appreciation. The Dreyfus Corporation
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST
Templeton Asset Strategy Seeks a high level of total return with reduced risk Templeton Investment
Fund (Class 1) over the long term through a flexible policy of Counsel, Inc.
investing in stocks of companies in any nation and debt
obligations of companies and governments of any nation.
Templeton Global Income Seeks high current income by investing primarily in debt Franklin Advisers, Inc.
Securities Fund (Class 1) securities of companies, governments and government Subadviser: Templeton
agencies of various nations throughout the world. Investment Counsel, Inc.
Templeton Growth Seeks capital growth by investing primarily in common Templeton Global Advisors
Securities Fund (Class 1) stocks issued by companies, large and small, in various Limited
nations throughout the world.
TRAVELERS SERIES FUND INC.
Alliance Growth Portfolio Seeks long-term growth of capital by investing Travelers Investment
predominantly in equity securities of companies with a Adviser ("TIA")
favorable outlook for earnings and whose rate of growth Subadviser: Alliance
is expected to exceed that of the U.S. economy over Capital Management L.P.
time. Current income is only an incidental
consideration.
MFS Total Return Seeks to obtain above-average income (compared to a TIA Subadviser:
Portfolio portfolio entirely invested in equity securities) Massachusetts Financial
consistent with the prudent employment of capital. Services Company ("MFS")
Generally, at least 40% of the Portfolio's assets will
be invested in equity securities.
Putnam Diversified Income Seeks high current income consistent with preservation TIA Subadviser: Putnam
Portfolio of capital. The Portfolio will allocate its investments Investment Management,
among the U.S. Government Sector, the High Yield Sector, Inc.
and the International Sector of the fixed income
securities markets.
</TABLE>

12
<PAGE> 15

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
INVESTMENT INVESTMENT INVESTMENT
OPTIONS OBJECTIVE ADVISER/SUBADVISER
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
TRAVELERS SERIES FUND INC.
Smith Barney High Income Seeks high current income. Capital appreciation is a SSB Citi Fund Management
Portfolio secondary objective. The Portfolio will invest at least LLC ("SSB Citi")
65% of its assets in high-yielding corporate debt
obligations and preferred stock.
Smith Barney Seeks total return on assets from growth of capital and SSB Citi
International Equity income by investing at least 65% of its assets in a
Portfolio diversified portfolio of equity securities of
established non-U.S. issuers.
Smith Barney Large Cap Seeks current income and long-term growth of income and SSB Citi
Value Portfolio capital by investing primarily, but not exclusively, in
common stocks.
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Seeks growth of capital by investing primarily in a TAMIC Subadvisor: TIMCO
Portfolio broadly diversified portfolio of common stocks.
Social Awareness Stock Seeks long-term capital appreciation and retention of SSB Citi
Portfolio net investment income by selecting investments,
primarily common stocks, which meet the social criteria
established for the Portfolio. Social criteria currently
excludes companies that derive a significant portion of
their revenues from the production of tobacco, tobacco
products, alcohol, or military defense systems, or in
the provision of military defense related services or
gambling services.
U.S. Government Seeks to select investments from the point of view of an TAMIC
Securities Portfolio investor concerned primarily with highest credit
quality, current income and total return. The assets of
the U.S. Government Securities Portfolio will be
invested in direct obligations of the United States, its
agencies and instrumentalities.
Utilities Portfolio Seeks to provide current income by investing in equity SSB Citi
and debt securities of companies in the utility
industries.
VARIABLE INSURANCE PRODUCTS
Equity Income Portfolio-- Seeks reasonable income by investing primarily in Fidelity Management &
Initial Class income- producing equity securities, in choosing these Research Company ("FMR")
securities, the portfolio manager will also consider the
potential for capital appreciation.
Growth Portfolio--Initial Seeks capital appreciation by purchasing common stocks FMR
Class of well-known, established companies, and small emerging
growth companies, although its investments are not
restricted to any one type of security. Capital
appreciation may also be found in other types of
securities, including bonds and preferred stocks.
High Income Portfolio-- Seeks to obtain a high level of current income by FMR
Initial Class investing primarily in high yielding, lower-rated,
fixed-income securities, while also considering growth
of capital.
VARIABLE INSURANCE PRODUCTS II
Asset Manager Portfolio-- Seeks high total return with reduced risk over the FMR
Initial Class long-term by allocating its assets among stocks, bonds
and short-term fixed-income instruments.
</TABLE>

CHARGES AND DEDUCTIONS
- --------------------------------------------------------------------------------

GENERAL

We deduct the charges described below. The charges are for the service and
benefits we provide, costs and expenses we incur, and risks we assume under the
Contracts. Services and benefits we provide include:

- the ability for you to make withdrawals and surrenders under the
Contracts;

- the death benefit paid on the death of the contract owner, annuitant, or
first of the joint owners,

- the available funding options and related programs (including dollar-cost
averaging, portfolio rebalancing, and systematic withdrawal programs);

13
<PAGE> 16

- administration of the annuity options available under the Contracts; and

- the distribution of various reports to contract owners.

Costs and expenses we incur include:

- losses associated with various overhead and other expenses associated
with providing the services and benefits provided by the Contracts,

- sales and marketing expenses including commission payments to your
Travelers sales agent, and

- other costs of doing business.

Risks we assume include:

- that annuitants may live longer than estimated when the annuity factors
under the Contracts were established;

- that the amount of the death benefit will be greater than the contract
value, and

- that the costs of providing the services and benefits under the Contracts
will exceed the charges deducted.

We may also deduct a charge for taxes.

Unless otherwise specified, charges are deducted proportionately from all
funding options in which you are invested.

We may reduce or eliminate the withdrawal charge, the administrative charges
and/or the mortality and expense risk charge under the Contract when certain
sales or administration of the Contract result in savings or reduced expenses
and/or risks. For certain trusts, we may change the order in which purchase
payments and earnings are withdrawn in order to determine the withdrawal charge.
We will not reduce or eliminate the withdrawal charge or the administrative
charge where such reduction or elimination would be unfairly discriminatory to
any person.

WITHDRAWAL CHARGE

We do not deduct a sales charge from purchase payments when they are made to the
Contract. However, a withdrawal charge (deferred sales charge) of 5% will apply
if a purchase payment is withdrawn within five years of its payment date. This
deferred sales charge is deducted only from purchase payments withdrawn, not on
growth. For this calculation, the five years is measured from the first day of
the month the payment is made.

In the case of a partial withdrawal, payments made first will be considered to
be withdrawn first ("first in, first out"). In no event may the withdrawal
charge exceed 5% of premiums paid in the five years immediately preceding the
withdrawal date, nor may the charge exceed 5% of the amount withdrawn. Unless
the Company receives instructions to the contrary, the withdrawal charge will be
deducted from the amount requested.

For purposes of the withdrawal charge calculation, withdrawals will be deemed to
be taken first from:

(a) any purchase payments to which no withdrawal charge applies; then

(b) from any remaining free withdrawal allowance (as described below)
after reduction by the amount of (a); then

(d) from any Contract earnings.

NOTE: Any free withdrawals taken will not reduce purchase payments still subject
to a withdrawal charge.

14
<PAGE> 17

We will not deduct a withdrawal charge (1) from the distribution of death
proceeds; or (2) after the first contract year, upon election of an annuity
payout (based upon life expectancy); or (3) made due to minimum distribution
requirements.

The withdrawal charge will be waived if:

- - an annuity payout is begun;

- - an income option of at least three years' duration (without right of
withdrawal) is begun after the first contract year;

- - the participant under a group Contract or annuitant under an individual
Contract dies;

- - the participant under a group Contract or annuitant under an individual
Contract becomes disabled (as defined by the Internal Revenue Service)
subsequent to purchase of the Contract;

- - the participant under a group Contract, or annuitant under an individual
Contract, under a tax-deferred annuity plan (403(b) plan) retires after age
55, provided the Contract has been in effect five years or more and provided
the payment is made to the contract owner or participant, as provided in the
plan;

- - the participant under a group Contract, or annuitant under an individual
Contract, under an IRA plan reaches age 70 1/2, provided the certificate, has
been in effect five years or more;

- - the participant under a group Contract, or annuitant under an individual
Contract, under a qualified pension or profit-sharing plan (including a 401(k)
plan) retires at or after age 59 1/2, provided the certificate or Contract, as
applicable has been in effect five years or more; or if refunds are made to
satisfy the anti-discrimination test. (For those under Certificates issued
before May 1, 1992, the withdrawal charge will also be waived if the
participant or annuitant retires at normal retirement age (as defined by the
Plan), provided the Certificate or Contract, as applicable has been in effect
one year or more);

- - the participant under a Section 457 deferred compensation plan retires and the
Certificate has been in effect five years or more, or if a financial hardship
or disability withdrawal has been allowed by the Plan administrator under
applicable Internal Revenue Service ("IRS") rules;

- - for group Contracts, the participant under a Section 457 deferred compensation
plan established by the Deferred Compensation Board of the state of New York
or a "public employer" in that state (as defined in Section 5 of the New York
State Finance Laws) terminates employment. The withdrawal charge will also be
waived for such a plan at the termination date specified in the Contract; or

- - for group Contracts, the participant under a pension or profit-sharing plan,
including a 401(k) plan, Section 457 deferred compensation plan, or a tax
deferred annuity plan (403(b) plan) that is subject to the Employee Retirement
Income Security Act of 1974 ("ERISA") retires at normal retirement age (as
defined by the plan) or terminates employment, provided that the contract
owner purchases this Contract in conjunction with a group unallocated flexible
annuity contract issued by the Company.

FREE WITHDRAWAL ALLOWANCE

Beginning in the second contract year, you may withdraw up to 10% of the cash
value annually. We calculate the available withdrawal amount as of the end of
the previous Contract year. The free withdrawal provision applies to all partial
withdrawals. We reserve the right to not permit the provision on a full
surrender. In Washington state, the free withdrawal provision applies to all
withdrawals.

ADMINISTRATIVE CHARGE

We deduct a semiannual administrative charge of $15 for each individual account
maintained. The administrative charge will be deducted from the account in June
and December of each year. The first charge will be prorated (i.e. calculated)
from the date of purchase. A prorated charge will also be made if the Contract
is completely withdrawn or terminated. This charge does not apply after

15
<PAGE> 18

an annuity payout has begun. The administrative charge will be deducted from the
cash value by canceling accumulation units in each funding option on a pro rata
basis. This charge will not be deducted from amounts held in the Fixed Account.

MORTALITY AND EXPENSE RISK CHARGE

Each business day, the Company deducts a mortality and expense risk ("M&E")
charge from amounts held in the Separate Accounts. This charge, on an annual
basis, is 1.25% of the Separate Account value. (This charge equals 0.003425% for
each business day.) We reserve the right to lower this charge at any time. This
charge compensates the Company for various risks assumed, benefits provided and
expenses incurred, including commission payments to Travelers sales agents.

FUNDING OPTION EXPENSES

The charges and expenses of the funding options are summarized in the fee table
and are described in the accompanying prospectuses.

PREMIUM TAX

Certain state and local governments charge premium taxes ranging from 0% to 5%
depending upon jurisdiction. The Company is responsible for paying these taxes
and will determine the method used to recover premium tax expenses incurred. We
will deduct any applicable premium taxes from the cash value either upon death,
surrender, annuitization, or at the time purchase payments are made to the
Contract, but no earlier than when we have a tax liability under state law.

TACTICAL ASSET ALLOCATION SERVICES FEES

In connection with the Tactical Asset Allocation services provided to
participants in Accounts TGIS, TSB and TAS, Copeland receives a fee equal on an
annual basis to 1.25% of the current value of the assets subject to the program.
The Company deducts this fee daily from the assets of the Market Timed Accounts.
Copeland also charges a $30 tactical asset allocation application fee.

Participants may discontinue Tactical Asset Allocation services at any time and
avoid any subsequent fees for those services by transferring to a non-timed
account. (See "Tactical Asset Allocation Services.")

MANAGED SEPARATE ACCOUNTS: MANAGEMENT AND FEES

The investments and administration of each managed separate account are under
the direction of a Board of Managers. Subject to the authority of each Board of
Managers, TIMCO and TAMIC furnish investment management and advisory services as
indicated in the Investment Option Chart. Additionally, the Board of Managers
for each managed separate account annually selects an independent public
accountant, reviews the terms of the management and investment advisory
agreements, recommends any changes in the fundamental investment policies (and
submits any such changes to contract owners at the annual meeting), and takes
any other actions necessary in connection with the operation and management of
the managed separate accounts.

The Travelers Investment Management Company ("TIMCO") is a registered investment
adviser that has provided investment advisory services since its incorporation
in 1967. Its principal offices are located at One Tower Square, Hartford,
Connecticut, and it is a wholly owned subsidiary of Salomon Smith Barney
Holdings Inc., which is a wholly owned subsidiary of Citigroup Inc., a bank
services holding company. TIMCO provides investment management and advisory
services to Accounts TAS, TGIS and TSB. The fees are as follows:

<TABLE>
<CAPTION>
ACCOUNT ANNUAL MANAGEMENT FEE
------- ---------------------
<S> <C>
Account TAS.......................... 0.35% of average daily net assets
Account TGIS......................... 0.3233% of average daily net assets
Account TSB.......................... 0.3233% of average daily net assets
</TABLE>

Travelers Asset Management International Company LLC ("TAMIC") is a registered
investment adviser that has provided investment advisory services since its
incorporation in 1978. Its principal

16
<PAGE> 19

offices are located at One Tower Square, Hartford, Connecticut, and it is an
indirect wholly owned subsidiary of Citigroup Inc., a bank holding company.
TAMIC provides investment and management and advisory services to Accounts GIS,
QB, MM and TB.

<TABLE>
<CAPTION>
ACCOUNT ANNUAL MANAGEMENT FEE
------- ---------------------
<S> <C>
0.65% of the first $500,000,000,
Account GIS.......................... plus
0.55% of the next $500,000,000, plus
0.50% of the next $500,000,000, plus
0.45% of the next $500,000,000, plus
0.40% of amounts over $2,000,000,000
(of Account GIS's aggregate net
asset value)
Account TB........................... 0.50% of the first $50,000,000, plus
0.40% of the next $100,000,000, plus
0.30% of the next $100,000,000, plus
0.25% of amounts over $250,000,000
(of Account TB's aggregate net
asset value)
Account QB........................... 0.3233% of average daily net assets
Account MM........................... 0.3233% of average daily net assets
</TABLE>

TAMIC also supervises the subadvisor of Account GIS, TIMCO. According to the
terms of this written subadvisory agreement, TAMIC will pay TIMCO a fee
equivalent on an annual basis to the following:

<TABLE>
<CAPTION>
AGGREGATE
ANNUAL NET ASSET
SUBADVISORY VALUE OF
FEE THE ACCOUNT
- ----------- -----------
<C> <S> <C>
0.45 % of the first $ 700,000,000plus
0.275% of the next $ 300,000,000plus
0.25 % of the next $ 500,000,000plus
0.225% of the next $ 500,000,000plus
0.20 % of amounts over $2,000,000,000
</TABLE>

TIMCO also acts as investment adviser or subadviser for:

- other investment companies used to fund variable products

- individual and pooled pension and profit-sharing accounts

- affiliated companies of The Travelers Insurance Company.

TAMIC also acts as investment adviser or subadviser for:

- other investment companies used to fund variable products

- individual and pooled pension and profit-sharing accounts and domestic
insurance companies affiliated with The Travelers Insurance Company

- nonaffiliated insurance companies.

TRANSFERS
- --------------------------------------------------------------------------------

Up to 30 days before the maturity date, you may transfer all or part of the
contract value between funding options. Transfers are made at the value(s) next
determined after we receive your request at the Home Office. There are no
charges or restrictions on the amount or frequency of transfers currently;
however, we reserve the right to charge a fee for any transfer request, and to
limit the number of transfers to one in any six-month period. We also reserve
the right to restrict transfers by any market timing firm or any other third
party authorized to initiate transfers on behalf of multiple contract owners. We
may, among other things, not accept: 1) the transfer instructions of any agent
acting under a power of attorney on behalf of more than one owner, or 2) the
transfer

17
<PAGE> 20

or exchange instructions of individual owners who have executed pre-authorized
transfer forms which are submitted by market timing firms or other third parties
on behalf of more than one owner. We further reserve the right to limit
transfers that we determine will disadvantage other contract owners.

Since different funding options have different expenses, a transfer of contract
values from one funding option to another could result in your investment
becoming subject to higher or lower expenses. After the maturity date, you may
make transfers between funding options only with our consent. Please refer to
Appendix B for information about transfers between the Fixed Account and the
funding options.

DOLLAR COST AVERAGING

Dollar cost averaging or the pre-authorized transfer program (the "DCA Program")
allows you to transfer a set dollar amount to other funding options on a monthly
or quarterly basis during the accumulation phase of the Contract. Using this
method, more accumulation units are purchased in a funding option if the value
per unit is low and fewer accumulation units are purchased if the value per unit
is high. Therefore, a lower-than-average cost per unit may be achieved over the
long run.

You may elect the DCA Program through written request or other method acceptable
to the Company. Certain minimums may apply to enroll in the program and to
amounts transferred.

You may establish pre-authorized transfers of contract values from the Fixed
Account, subject to certain restrictions. Under the DCA Program, automated
transfers from the Fixed Account may not deplete your Fixed Account Value in
less than twelve months from your enrollment in the DCA Program.

In addition to the DCA Program, Travelers may credit increased interest rates to
contract owners under an administrative Special DCA Program established at the
discretion of Travelers, depending on availability and state law. Under this
program, the contract owner may pre-authorize level transfers to any of the
funding options under either a 6 Month Program or 12 Month Program. The 6 Month
Program and the 12 Month Program will generally have different credited interest
rates. Under the 6 Month Program, the interest rate can accrue up to 6 months on
funds in the Special DCA Program and all purchase payments and accrued interest
must be transferred on a level basis to the selected funding option in 6 months.
Under the 12 Month Program, the interest rate can accrue up to 12 months on
funds in the Special DCA Program and all purchase payments and accrued interest
in this Program must be transferred on a level basis to the selected funding
options in 12 months.

The pre-authorized transfers will begin after the initial Program purchase
payment and complete enrollment instructions are received by Travelers. If
complete Program enrollment instructions are not received by the Company within
15 days of receipt of the initial Program purchase payment, the entire balance
in the Program will be credited with the non-Program interest rate then in
effect for the Fixed Account.

You may start or stop participation in the DCA Program at any time, but you must
give the Company at least 30 days' notice to change any automated transfer
instructions that are currently in place. If you stop the Special DCA Program
and elect to remain in the Fixed Account, your contract value will be credited
for the remainder of 6 or 12 months with the interest rate for non-Program
funds.

A contract owner may only have one DCA Program or Special DCA Program in place
at one time. Any subsequent purchase payments received by the Company within the
Program period selected will be allocated to the current funding options over
the remainder of that Program transfer period, unless otherwise directed by the
contract owner.

All provisions and terms of the Contract apply to the DCA and Special DCA
Programs, including provisions relating to the transfer of money between
investment options. We reserve the right to suspend or modify transfer
privileges at any time and to assess a processing fee for this service.

18
<PAGE> 21

ASSET ALLOCATION ADVICE

You may elect to enter into a separate advisory agreement with Copeland, an
affiliate of the Company. For a fee, Copeland provides asset allocation advice
under its CHART Program(R), which is fully described in a separate Disclosure
Statement. The CHART program may not be available in all marketing programs
through which this Contract is sold.

TACTICAL ASSET ALLOCATION SERVICES
- --------------------------------------------------------------------------------

Accounts TGIS, TSB and TAS ("Market Timed Accounts") are funding options
available to individuals who have entered into tactical asset allocation
services agreements ("Tactical Asset Allocation agreements") with registered
investment advisers who provide tactical asset allocation services ("registered
investment advisers"). These agreements allow the registered investment advisers
to act on your behalf by transferring all or a portion of your cash value units
from one Market Timed Account to another. The registered investment advisers can
transfer funds only from one Market Timed Account to another Market Timed
Account.

You may transfer account values from any of the Market Timed Accounts to any of
the other funding options. However, if you are in a Market Timed Account,
transfer all current account values and direct all future allocations to a
non-timed funding option, the Tactical Asset Allocation agreements with the
registered investment advisers automatically terminate. If this occurs, the
registered investment advisers no longer have the right to transfer funds on
your behalf. Partial withdrawals from the Market Timed Accounts do not affect
the tactical asset allocation agreements.

Copeland, a registered investment adviser and an affiliate of the Company,
provides Tactical Asset Allocation services for a fee. The fee equals 1.25%
annually of the current value of the assets subject to the program. Copeland
also charges a $30 program application fee. If you terminate your Tactical Asset
Allocation agreement and decide to reenter an agreement, the Tactical Asset
Allocation fees will be reassessed, and a new $30 application fee will be
charged by Copeland.

We deduct the tactical asset allocation fee from the assets of the Market Timed
Accounts. Although the Tactical Asset Allocation agreements are between you and
Copeland, we are solely responsible for payment of the fee to Copeland. On each
Valuation Date, we deduct the amount necessary to pay the fee from each Market
Timed Account and, in turn, pay that amount to Copeland. This is the only
payment method available to those who enter into Tactical Asset Allocation
agreements. Individuals in the Market Timed Accounts may use unaffiliated market
timing investment advisers with our approval and if such advisers agree to an
arrangement substantially identical to the asset charge payment method.

Because the tactical asset allocation services are provided according to
individual agreements between you and the registered investment advisers, the
Boards of Managers of the Market Timed Accounts do not exercise any supervisory
or oversight role for services or the related fees.

Under the asset charge payment method, the daily deductions for market timing
fees are not treated by the Company as taxable distributions. (See "Federal Tax
Considerations".)

TACTICAL ASSET ALLOCATION RISKS

If you invest in the Market Timed Accounts without a tactical asset allocation
agreement, you may bear a higher proportion of the expenses associated with
Separate Account portfolio turnover. In addition, those who allocate amounts to
these Accounts without a Tactical Asset Allocation agreement will still have the
Tactical Asset Allocation fees deducted on a daily basis. We intend to identify
any such individuals and restore to their accounts, no less frequently than
monthly, an amount equal to the deductions for the Tactical Asset Allocation
fees. However, this restored amount will not reflect any investment experience
of the fees deducted.

19
<PAGE> 22

If you participate in a Tactical Asset Allocation agreement, you may be subject
to the following additional risks: (1) higher transaction costs; (2) higher
portfolio turnover rate; (3) investment return goals not being achieved by the
registered investment advisers which provide Tactical Asset Allocation services;
and (4) higher account expenses for depleting and, then starting up the account.
Actions by the registered investment advisers which provide tactical asset
allocation services may also increase risks generally found in any investment,
i.e., the failure to achieve an investment objective, and possible lower yield.
In addition, if more than one Tactical Asset Allocation strategy uses a Market
Timed Account, those who invest in the Market Timed Account when others are
transferred into or out of that Account by the registered investment advisers
may bear part of the direct costs incurred by those individuals who were
transferred. For example, if 90% of a Market Timed Account is under one tactical
asset allocation strategy, and those funds are transferred into or out of that
Account, those constituting the other 10% of the Market Timed Account may bear a
higher portion of the expense for the transfer.

ACCESS TO YOUR MONEY
- --------------------------------------------------------------------------------

Under a group Contract, before a participant's maturity date, we will pay all or
any portion of that participant's cash surrender value, that is, the contract
value less any withdrawal charge and any premium tax not previously deducted to
the owner or participant, as provided in the plan. A group contract owner's
account may be surrendered for cash without the consent of any participant, as
provided in the plan.

Under an individual Contract, the contract owner may redeem all or any portion
of the cash surrender value any time before the maturity date. Unless you submit
a written request specifying the fixed or variable funding option(s) from which
amounts are to be withdrawn, the withdrawal will be made on a pro rata basis.
The cash surrender value will be determined as of the business day after we
receive the surrender request at our Home Office. The cash surrender value may
be more or less than the purchase payments made. Withdrawals during the annuity
period are not allowed.

We may defer payment of any cash surrender value for a period of up to seven
days after the written request is received, but it is our intent to pay as soon
as possible. We cannot process requests for withdrawal that are not in good
order. We will contact you if there is a deficiency causing a delay and will
advise what is needed to act upon the withdrawal request.

For those participating in the Texas Optional Retirement Program, withdrawals
may only be made upon termination of employment, retirement or death as provided
in the Texas Optional Retirement Program.

Participants in Section 403(b) tax deferred annuity plans may not withdraw
certain salary reduction amounts before reaching age 59 1/2, unless withdrawn
due to separation from service, death, disability or hardship. (See "Federal Tax
Considerations.")

SYSTEMATIC WITHDRAWALS

Each contract year, you may elect to take monthly, quarterly, semiannual or
annual systematic withdrawals of a specified dollar amount. Any applicable
premium taxes will be deducted. To elect this option, an election form provided
by the Company must be completed. Systematic withdrawals may be stopped at any
time, provided the Company receives at least 30 days' written notice.

We reserve the right to discontinue offering systematic withdrawals or to assess
a processing fee for this service upon 30 days' written notice to contract
owners (where permitted by law).

Each systematic withdrawal is subject to federal income tax on the taxable
portion. In addition, a 10% federal penalty tax may be assessed on systematic
withdrawals if the contract owner is under

20
<PAGE> 23

age 59 1/2. You should consult with your tax adviser regarding the tax
consequences of systematic withdrawal.

OWNERSHIP PROVISIONS

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

TYPES OF OWNERSHIP

Contract Owner (you). The Contract belongs to the contract owner named in the
Contract (on the Specifications page), or to any other person to whom the
contract is subsequently assigned. An assignment of ownership or a collateral
assignment may be made only for nonqualified contracts. You have sole power
during the annuitant's lifetime to exercise any rights and to receive all
benefits given in the contract provided you have not named an irrevocable
beneficiary and provided the Contract is not assigned.

You receive all payments while the annuitant is alive unless you direct them to
an alternate recipient. An alternate recipient does not become the contract
owner.

Joint Owner. For nonqualified contracts only, joint owners (e.g. spouses) may
be named in a written request before the contract is in effect. Joint owners may
independently exercise transfers allowed under the Contract. All other rights of
ownership must be exercised by both owners. Joint owners own equal shares of any
benefits accruing or payments made to them.

BENEFICIARY

You name the beneficiary in a written request. The beneficiary has the right to
receive any death benefit proceeds upon the death of the annuitant or a contract
owner. If more than one beneficiary survives the annuitant or contract owner,
they will share equally in benefits unless different shares are recorded with
the Company by written request before the death of the annuitant or contract
owner. In the case of a non-spousal beneficiary or a spousal beneficiary who has
chosen not to assume the contract, the death benefit proceeds will be held in a
fixed account until the beneficiary elects a Settlement Option or takes a
distribution.

Unless an irrevocable beneficiary has been named, you have the right to change
any beneficiary by written request during the lifetime of the annuitant and
while the Contract continues.

ANNUITANT

The annuitant is designated in the Contract (on the Specifications page), and is
the individual on whose life the maturity date and the amount of the monthly
annuity payments depend. The annuitant may not be changed after the contract is
in effect.

A contingent annuitant may not be changed, deleted or added after the Contract
becomes effective.

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<PAGE> 24

DEATH BENEFIT
- --------------------------------------------------------------------------------

DEATH PROCEEDS BEFORE THE MATURITY DATE

The following death benefit applies to all Contracts that include a death
benefit. We calculate the death benefit amount as of the date our Home Office
receives proof of death. All amounts will be reduced by any outstanding loans
and any premium taxes due.

<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------
INDIVIDUAL CONTRACT GROUP CONTRACT
- ------------------------------------------------------------------------------------------------------
IF ANNUITANT DIES ON OR AFTER AGE 75, AND BEFORE THE IF PARTICIPANT DIES ON OR AFTER AGE 75, AND
MATURITY DATE: BEFORE THE MATURITY DATE:
- ------------------------------------------------------------------------------------------------------
Amount paid: the cash value of the Contract Amount paid: the participant's interest
under the Contract
- ------------------------------------------------------------------------------------------------------
IF ANNUITANT DIES BEFORE AGE 75, AND BEFORE THE IF PARTICIPANT DIES BEFORE AGE 75, AND
MATURITY DATE: BEFORE THE MATURITY DATE:
- ------------------------------------------------------------------------------------------------------
Amount paid: the greater of (1),(2) or (3) below: Amount paid: the greatest of (1), (2) or (3)
below:
- ------------------------------------------------------------------------------------------------------
(1) the cash value (1) the participant's interest
- ------------------------------------------------------------------------------------------------------
(2) the total purchase payments made, less any prior (2) the total purchase payments made on
withdrawals or loans behalf of the participant, less any
prior withdrawals or loans
- ------------------------------------------------------------------------------------------------------
(3) the cash value on the 5(th) multiple contract (3) the participant's interest on the 5(th)
year anniversary (i.e., 5(th), 10(th), 15(th), multiple certificate year anniversary
etc.) less any withdrawals made since that (i.e., 5(th), 10(th), 15(th), etc.) less
anniversary before we receive proof of death any withdrawals made since that
anniversary before we receive proof of
death.
- ------------------------------------------------------------------------------------------------------
</TABLE>

PAYMENT OF PROCEEDS

The process of paying death benefit proceeds before the maturity date under
various situations for nonqualified contracts and qualified contracts is
summarized in the charts below. The charts do not encompass every situation and
are merely intended as a general guide. More detailed information is provided in
your Contract. Generally, the person(s) receiving the benefit may request that
the proceeds be paid in a lump sum, or be applied to one of the settlement
options available under the Contract.

NONQUALIFIED CONTRACTS

22
<PAGE> 25

<TABLE>
<S> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------
BEFORE THE MATURITY DATE, UPON THE COMPANY WILL PAY THE UNLESS... MANDATORY PAYOUT
THE DEATH OF THE PROCEEDS TO: RULES APPLY*
- --------------------------------------------------------------------------------------------------------------
Joint Owner (who is not the The surviving joint Unless the surviving joint Yes
annuitant) owner. owner is the spouse and
elects to assume and continue
the contract.
- --------------------------------------------------------------------------------------------------------------
Joint Owner (who is the The beneficiary (ies), Unless the beneficiary is the Yes
annuitant) or if none, to the contract owner's spouse and
contract owner's estate. the spouse elects to assume
and continue the contract.
Or, unless there is a
contingent annuitant the
contingent annuitant becomes
the annuitant and the
proceeds will be paid to the
surviving joint owner. If the
surviving joint owner is the
spouse, the spouse may elect
to assume and continue the
contract.
- --------------------------------------------------------------------------------------------------------------
Annuitant (who is not the The beneficiary (ies). Unless, there is a contingent No
contract owner) annuitant. Then, the
contingent annuitant becomes
the annuitant and the
Contract continues in effect
(generally using the original
maturity date). The proceeds
will then be paid upon the
death of the contingent
annuitant or owner.
- --------------------------------------------------------------------------------------------------------------
Annuitant (who is the contract See death of "owner who N/A
owner) is the annuitant" above.
- --------------------------------------------------------------------------------------------------------------
Annuitant (where owner is a The beneficiary (ies) Yes (Death of
nonnatural person/trust) (e.g. the trust). annuitant is
treated as death
of the owner in
these
circumstances.)
- --------------------------------------------------------------------------------------------------------------
Contingent Annuitant (assuming No death proceeds are N/A
annuitant is still alive) payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
Beneficiary No death proceeds are N/A
payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
Contingent Beneficiary No death proceeds are N/A
payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
</TABLE>

* Certain payout rules of the Internal Revenue Code (IRC) are triggered upon the
death of any Owner. Non-spousal Beneficiaries (as well as spousal
beneficiaries who choose not to assume the contract) must begin taking
distributions based on the Beneficiary's life expectancy within one year of
death or take a complete distribution of contract proceeds within 5 years of
death.

23
<PAGE> 26

QUALIFIED CONTRACTS

DEATH PROCEEDS AFTER THE MATURITY DATE

If any owner or the annuitant dies on or after the maturity date, the Company
will pay the beneficiary a death benefit consisting of any benefit remaining
under the annuity or income option then in effect.

THE ANNUITY PERIOD
- --------------------------------------------------------------------------------

MATURITY DATE

Under the Contract, you can receive scheduled annuity payments. You can choose
the month and the year in which those payments begin (maturity date). You can
also choose among payout plans (annuity or income options). While the annuitant
is alive, you can change your selection any time up to the maturity date.
Annuity payments will begin on the maturity date stated in the Contract/
Certificate unless it has been fully surrendered or the proceeds have been paid
to the beneficiary before that date. Annuity payments are a series of periodic
payments (a) for life; (b) for life with either a minimum number of payments or
a specific amount assured; or (c) for the joint lifetime of the annuitant and
another person, and thereafter during the lifetime of the survivor. Income
options that are not based on any lifetime are also available. We may require
proof that the annuitant is alive before annuity payments are made. Not all
options may be available in all states.

You may choose to annuitize at any time after you purchase the Contract. Under
nonqualified Contracts, unless you elect otherwise, the maturity date will be
the annuitant's 75th birthday or ten years after the effective date of the
Contract, if later. Under qualified Contracts, the maturity date must be before
the individual's 70th birthday, unless we consent to a later date.

At least 30 days before the original maturity date, you may extend the maturity
date to any time prior to the annuitant's 85th birthday or to a later date with
our consent. Certain annuity options taken at the maturity date may be used to
meet the minimum required distribution requirements of federal tax law, or a
program of partial surrenders may be used instead. These mandatory distribution
requirements take effect generally upon the death of the contract owner, or with
qualified Contracts upon either the later of the contract owner's attainment of
age 70 1/2 or year of retirement; or the death of the contract owner. You should
seek independent tax advice regarding the election of minimum required
distributions.

ALLOCATION OF ANNUITY

When an annuity option is elected, it may be elected as a variable annuity, a
fixed annuity, or a combination of both. If, at the time annuity payments begin,
no election has been made to the contrary, the contract value will be applied to
provide an annuity funded by the same investment options as you have selected
during the accumulation period. At least 30 days before the maturity

24
<PAGE> 27

date, you may transfer the contract value among the funding options in order to
change the basis on which annuity payments will be determined. (See
"Transfers.")

VARIABLE ANNUITY

You may choose an annuity payout that fluctuates depending on the investment
experience of the variable funding options. The number of annuity units credited
to the Contract is determined by dividing the first monthly annuity payment
attributable to each funding option by the corresponding accumulation unit value
as of 14 days before the date annuity payments begin. An annuity unit is used to
measure the dollar value of an annuity payment. The number of annuity units (but
not their value) remains fixed during the annuity period.

DETERMINATION OF FIRST ANNUITY PAYMENT. The Contract contains tables used to
determine the first monthly annuity payment. If a variable annuity is elected,
the amount applied to it will be the value of the funding options as of 14 days
before the date annuity payments begin less any applicable premium taxes not
previously deducted.

The amount of the first monthly payment depends on the annuity option elected
and the annuitant's adjusted age. A formula for determining the adjusted age is
contained in the Contract. The total first monthly annuity payment is determined
by multiplying the benefit per $1,000 of value shown in the Contract tables by
the number of thousands of dollars of contract value applied to that annuity
option and factors in an assumed daily net investment factor. The Assumed Daily
Net Investment factor corresponds to an annual interest rate of 3%, used to
determine the guaranteed payout rates shown. If investment rates are higher at
the time annuitization is selected, payout rates will be higher than those
shown. The Company reserves the right to require satisfactory proof of age of
any person on whose life annuity payments are based before making the first
payment under any of the payment options.

DETERMINATION OF SECOND AND SUBSEQUENT ANNUITY PAYMENTS. The dollar amount of
all subsequent annuity payments changes from month to month based on the
investment experience of the applicable funding options. The total amount of
each annuity payment will be equal to the sum of the basic payments in each
funding option. The actual amounts of these payments are determined by
multiplying the number of annuity units credited to each funding option by the
corresponding annuity unit value as of the date 14 days before the date the
payment is due.

FIXED ANNUITY

You may choose a fixed annuity that provides payments which do not vary during
the annuity period. We will calculate the dollar amount of the first fixed
annuity payment as described under "Variable Annuity," except that the amount
applied to begin the annuity will be the contract value, determined as of the
date annuity payments begin. Payout rates will not be lower than those shown in
the Contract. If it would produce a larger payment, the first fixed annuity
payment will be determined using the Life Annuity Tables in effect on the
maturity date.

PAYMENT OPTIONS
- --------------------------------------------------------------------------------

ELECTION OF OPTIONS

On the maturity date, we will pay the amount due under the Contract in one lump
sum, or in accordance with the payment option selected by the contract owner.
Election of an annuity option or an income option must be made in writing in a
form satisfactory to the Company. Any election made during the lifetime of the
group Contract participant, or the annuitant under an individual Contract, must
be made by the participant, as provided in the plan or the contract owner, as
applicable. The terms of options elected may be restricted to meet the contract
qualification requirements of Section 401(a)(9) of the Internal Revenue Code.

Income options differ from annuity options in that the amount of the payments
made under income options are unrelated to the length of life of any person.
Thus, the participant may outlive

25
<PAGE> 28

the payment period. Although the Company continues to deduct the charge for
mortality and expense risks, it assumes no mortality risks for amounts applied
under any income option.

The minimum amount that can be placed under an annuity option or income option,
is $2,000 unless we agree to a lesser amount. If any monthly periodic payment
due is less than $20, we reserve the right to make payments at less frequent
intervals. Annuity options and income options may be elected on a monthly,
quarterly, semiannual or annual basis.

AUTOMATIC OPTION -- Unless we are directed otherwise by the owner, if the
participant is living and has a spouse and no election has been made, the
Company will, on that participant's maturity date, pay to the participant the
first of a series of annuity payments based on the life of the participant as
the primary payee and the participant's spouse in accordance with Option 5
below.

Unless the plan provides otherwise, if the participant has no spouse, the
Company will, on the maturity date, pay to the participant the first of a series
of annuity payments based on the life of the participant, in accordance with
Option 2 with 120 monthly payments assured.

ANNUITY OPTIONS

OPTION 1 -- LIFE ANNUITY -- NO REFUND: The Company will make annuity payments
during the lifetime of the person on whose life the payments are based,
terminating with the last payment preceding death. While this option offers the
maximum periodic payment, there is no assurance of a minimum number of payments,
nor is there a provision for a death benefit for beneficiaries.

OPTION 2 -- LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS ASSURED: The
Company will make monthly annuity payments during the lifetime of the person on
whose life payments are based, with the agreement that if, at the death of that
person, payments have been made for less than 120, 180 or 240 months, as
selected, payments will be continued during the remainder of the period to the
beneficiary designated. The beneficiary may instead receive a single sum
settlement equal to the discounted value of the future payments with the
interest rate equivalent to the assumption originally used when the annuity
began.

OPTION 3 -- UNIT REFUND LIFE ANNUITY: The Company will make annuity payments
during the lifetime of the person on whose life payments are based, terminating
with the last payment due before the death of that person, provided that, at
death, the beneficiary will receive in one sum the current dollar value of the
number of annuity units equal to (a) minus (b) (if that difference is positive)
where: (a) is the total amount applied under the option divided by the annuity
unit value on the due date of the first annuity payment, and (b) is the product
of the number of the annuity units represented by each payment and the number of
payments made.

OPTION 4 -- JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND: The Company will
make annuity payments during the joint lifetime of the two persons on whose
lives payments are based, and during the lifetime of the survivor. No further
payments will be made following the death of the survivor. There is no assurance
of a minimum number of payments, nor is there a provision for a death benefit
upon the survivor's death.

OPTION 5 -- JOINT AND LAST SURVIVOR LIFE ANNUITY -- ANNUITY REDUCES ON DEATH OF
PRIMARY PAYEE: The Company will make annuity payments during the lifetime of the
two persons on whose lives payments are based. One of the two persons will be
designated as the primary payee. The other will be designated as the secondary
payee. On the death of the secondary payee, if survived by the primary payee,
the Company will continue to make monthly annuity payments to the primary payee
in the same amount that would have been payable during the joint lifetime of the
two persons. On the death of the primary payee, if survived by the secondary
payee, the Company will continue to make annuity payments to the secondary payee
in an amount equal to 50% of the payments which would have been made during the
lifetime of the primary payee. No further payments will be made following the
death of the survivor.

OPTION 6 -- OTHER ANNUITY OPTIONS: The Company will make any other arrangements
for annuity payments as may be mutually agreed upon.

26
<PAGE> 29

INCOME OPTIONS

Income payments are periodic payments made by the Company which are not based on
the life of the participant.

The cash surrender value used to determine the amount of any income payment will
be calculated as of 14 days before the date an income payment is due and will be
determined on the same basis as the cash surrender value during the Accumulation
Phase, including the deduction for mortality and expense risks.

While income options do not directly involve mortality risks for the Company, an
individual may elect to apply the remaining cash surrender value to provide an
annuity at the guaranteed rates even though income payments have been received
under an income option. Before an owner or participant makes any income option
election, he or she should consult a tax adviser as to any adverse tax
consequences the election might have.

OPTION 1 -- PAYMENTS OF A FIXED AMOUNT: The Company will make equal payments of
the amount elected until the cash surrender value applied under this option has
been exhausted. The final payment will include any amount insufficient to make
another full payment.

OPTION 2 -- PAYMENTS FOR A FIXED PERIOD: The Company will make payments for the
number of years selected. The amount of each payment will be equal to the
remaining cash surrender value applied under this option divided by the number
of remaining payments.

OPTION 3 -- INVESTMENT INCOME: The Company will make payments for the period
agreed on. The amount payable will be equal to the excess, if any, of the cash
surrender value under this option over the amount applied under this option. No
payment will be made if the cash surrender value is less than the amount
applied, and it is possible that no payments would be made for a period of time.
Payments under this option are not considered to be annuity payments and are
taxable in full as ordinary income. (See "Federal Tax Considerations.") This
option will generally be inappropriate under federal tax law for periods that
exceed the participant's attainment of age 70 1/2.

MISCELLANEOUS CONTRACT PROVISIONS
- --------------------------------------------------------------------------------

RIGHT TO RETURN

For individual contracts, you may return the Contract for a full refund of the
cash value (including charges) within ten days after you receive it (the "right
to return period"). You bear the investment risk on the purchase payment during
the right to return period; therefore, the cash value returned may be greater or
less than your purchase payment.

If the Contract is purchased as an Individual Retirement Annuity, and is
returned within the first seven days after delivery, your purchase payment will
be refunded in full; during the remainder of the right to return period, the
cash value (including charges) will be refunded.

For group Contracts issued in the state of New York, during the 20 days after
receiving a certificate, the participant may return it to us, by mail or in
person, if for any reason the participant has changed his or her mind. Upon
return of the certificate, the Company will refund to the contract owner the sum
of all purchase payments made under the Contract, and will make the separate
accounts whole if the accumulation value has declined.

The cash value will be determined following the close of the business day on
which we receive the Contract and a written request for a refund. Where state
law requires a longer period, or the return of purchase payments or other
variations of this provision, the Company will comply. Refer to your Contract
for any state-specific information.

The right to return is not available to participants of the Texas Optional
Retirement Program.

27
<PAGE> 30

TERMINATION OF INDIVIDUAL CONTRACT

You do not need to make any purchase payments after the first to keep the
Contract in effect. However, unless otherwise specified by state law, we reserve
the right to terminate the Contract on any business day if the cash value as of
that date is less than $500 and no purchase payments have been made for at least
three years. Termination will not occur until 31 days after the Company has
mailed notice of termination to the contract owner's last known address and to
any assignee of record. If the Contract is terminated, we will pay you the cash
value less any applicable premium tax, and less any applicable administrative
charge.

TERMINATION OF GROUP CONTRACT OR ACCOUNT

TERMINATION BY OWNER -- If an owner or a participant terminates an account, in
whole or in part, while the Contract remains in effect; and the value of the
terminated account is to be either paid in cash to you or to a participant; or
transferred to any other funding vehicle, the Company will pay or transfer the
cash surrender value of the terminated account.

If this Contract is terminated, whether or not the plan is terminated; and the
owner or the participant, as provided in the plan, elect that values are not to
be paid out in cash or transferred, the Company reserves the right to agree to
apply a participant's interest either as instructed by the owner or the
participant, or under one of the options described under "Options in the Event
of Termination of a Participant."

TERMINATION BY PARTICIPANT -- If a participant terminates an individual account,
in whole or in part, while the Contract remains in effect; and the value of the
terminated individual account is to be either paid in cash to the participant,
or transferred to any other funding vehicle, the Company will pay or transfer
the cash surrender value of the terminated account.

TERMINATION BY THE COMPANY AND TERMINATION AMOUNT -- If the cash value in a
participant's individual account is less than the termination amount stated in
the Contract, and no premium has been applied to the account for at least three
years, the Company reserves the right to terminate that account, and to move the
cash value of that participant's individual account to the owner's account.

If the plan does not allow for this movement to the owner's account, the cash
value, less any applicable premium tax not previously deducted, will be paid to
that participant or to the owner, as provided in the plan.

We reserve the right to terminate this Contract on any valuation date if:

1. there is no cash value in any participant's individual account, and

2. the cash value of the owner's account, if any, is less than $500, and

3. the premium has not been paid for at least three years.

If this Contract is terminated, the cash value of the owner's account, if any,
less any applicable premium tax not previously deducted will be paid to you.

Termination will not occur until 31 days after the Company has mailed notice of
termination to the group contract owner or the participant, as provided in the
plan, at the last known address; and to any assignee of record.

OPTIONS IN THE EVENT OF TERMINATION OF A PARTICIPANT -- In the event that,
before a participant's maturity date, that participant terminates participation
in the plan, the owner or that participant, as provided in the plan, with
respect to that participant's interest may elect:

1. If that participant is at least 50 years of age, to have that
participant's interest applied to provide an annuity option or an income
option.

2. If the Contract is continued, to have that participant's interest
applied to continue as a paid-up deferred annuity for that participant,
(i.e., the cash value remains in the Contract and the annuity becomes
payable under the same terms and conditions as the annuity that would
have otherwise been payable at the maturity date).

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3. To have the owner or that participant, as provided in the plan, receive
that participant's interest in cash.

4. If that participant becomes a participant under another group contract
of this same type which is in effect with us, to transfer that
participant's interest to that group contract.

5. To make any other arrangements as may be mutually agreed on.

If this Contract is continued, any cash value to which a terminating participant
is not entitled under the plan, will be moved to the owner's account.

AUTOMATIC BENEFIT -- In the event of termination, unless otherwise provided in
the Plan, a participant's interest will continue as a paid-up deferred annuity
in accordance with option 2. above, if this Contract is continued. Or, if this
Contract is terminated, will be paid in cash to the owner or to that
participant, as provided in the plan.

ANNUITY PAYMENTS -- Termination of this Contract or the plan will not affect
payments being made under any annuity option which began before the date of
termination.

DISTRIBUTION FROM ONE ACCOUNT TO ANOTHER ACCOUNT

Under a group Contract, the owner may, as provided for in the plan, distribute
the cash value from the owner's account to one or more individual accounts. No
distribution will be allowed between individual accounts.

The owner may, as required by and provided for in the plan, move the cash value
from any or all individual accounts to the owner's account without a charge.

REQUIRED REPORTS

As often as required by law, but at least once in each contract year before the
due date of the first annuity payment, we will furnish a report showing the
number of accumulation units credited to the Contract and the corresponding
accumulation unit value(s) as of the report date for each funding option to
which the contract owner has allocated amounts during the applicable period. The
Company will keep all records required under federal and state laws.

CHANGE OF CONTRACT

For group Contracts, the Company may, at any time, make any changes, including
retroactive changes, in the Contract to the extent that the change is required
to meet the requirements of any federal law or regulation to which the Company
is subject.

Except as provided in the paragraph immediately above, no change may be made in
the Contract before the fifth anniversary of the contract date, and in no event
will changes be made with respect to payments being made by the Company under
any annuity option which has commenced prior to the date of change. On and after
the fifth anniversary of the contract date, the Company reserves the right to
change the termination amount (see "Termination of Contract or Account"), the
calculation of the net investment rate and the unit values, and the annuity
tables. Any change in the annuity tables will be applicable only to premiums
received under the Contract after the change. The ability to make such change
lessens the value of mortality and expense guarantees. Other changes (including
changes to the administrative charge) may be applicable to all owners' accounts
and individual accounts under the Contract, to only the owners' accounts and
individual accounts established after the change, or to only premiums received
under the Contract after the date of change as the Company declares at the time
of change. The Company will give notice to the owner at least 90 days before the
date the change is to take effect.

ASSIGNMENT

The participant may not assign his or her rights under a group Contract. The
owner may assign his or her rights under an individual or a group Contract if
allowed by the plan.

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SUSPENSION OF PAYMENTS

The Company reserves the right to suspend or postpone the date of any payment or
determination of values on any business day (1) when the New York Stock Exchange
("the Exchange") is closed; (2) when trading on the Exchange is restricted; (3)
when an emergency exists as determined by the SEC so that the sale of securities
held in the Separate Account may not reasonably occur or so that the Company may
not reasonably determine the value the Separate Account's net assets; or (4)
during any other period when the SEC, by order, so permits for the protection of
security holders.

OTHER INFORMATION
- --------------------------------------------------------------------------------

THE INSURANCE COMPANY

The Travelers Insurance Company is a stock insurance company chartered in 1864
in Connecticut and continuously engaged in the insurance business since that
time. It is licensed to conduct life insurance business in all states of the
United States, the District of Columbia, Puerto Rico, Guam, the U.S. and British
Virgin Islands and the Bahamas. The Company is an indirect wholly owned
subsidiary of Citigroup Inc. The Company's Home Office is located at One Tower
Square, Hartford, Connecticut 06183.

FINANCIAL STATEMENTS

The financial statements for the insurance company and for the separate accounts
are located in the Statement of Additional Information.

IMSA

The Company is a member of the Insurance Marketplace Standards Association
("IMSA"), and as such may use the IMSA logo and IMSA membership in its
advertisements. Companies that belong to IMSA subscribe to a set of ethical
standards covering the various aspects of sales and service for individually
sold life insurance and annuities. IMSA members have adopted policies and
procedures that demonstrate a commitment to honesty, fairness and integrity in
all customer contacts involving the sale and service of individual life
insurance and annuity products.

DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS

The Company intends to sell the Contracts in all jurisdictions where it is
licensed to do business and where the Contract is approved. Any sales
representative or employee who sells the Contracts will be qualified to sell
variable annuities under applicable federal and state laws. Each broker-dealer
is registered with the SEC under the Securities Exchange Act of 1934, and all
are members of the NASD. The principal underwriter of the Contracts is CFBDS,
Inc., 21 Milk St., Boston, MA. CFBDS, Inc. is not affiliated with the Company or
the Separate Account. However, it is currently anticipated that Travelers
Distribution LLC, an affiliated broker-dealer, may become the principal
underwriter for the Contracts during the year 2000.

Up-front compensation paid to sales representatives will not exceed 7% of the
purchase payments made under the Contracts. If asset based compensation is paid,
it will not exceed 2% of the average account value annually. From time to time,
the Company may pay or permit other promotional incentives, in cash, credit or
other compensation.

CONFORMITY WITH STATE AND FEDERAL LAWS

The Contract is governed by the laws of the state in which it is delivered.
Where a state has not approved a contract feature or funding option, it will not
be available in that state. Any paid-up annuity, contract value or death
benefits that are available under the Contract are not less than the minimum
benefits required by the statutes of the state in which the Contract is
delivered. We reserve the right to make any changes, including retroactive
changes, in the Contract to the extent

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<PAGE> 33

that the change is required to meet the requirements of any law or regulation
issued by any governmental agency to which the Company, the Contract or the
contract owner is subject.

VOTING RIGHTS

The contract owner or participant, as applicable, has certain voting rights in
the funding options. The number of votes which an owner or participant, as
provided in the plan, may cast in the accumulation period is equal to the number
of accumulation units credited to the account under the Contract. During the
annuity period, the group participant or the individual contract owner may cast
the number of votes equal to (i) the reserve related to the Contract divided by
(ii) the value of an accumulation unit. During the annuity period, the voting
rights of a participant or, under an individual Contract, an annuitant, will
decline as the reserve for the Contract declines.

Upon the death of the person authorized to vote under the Contract, all voting
rights will vest in the beneficiary of the Contract, except in the case of
nonqualified individual Contracts, where the surviving spouse may succeed to the
ownership.

FUND U. In accordance with its view of present applicable law, the Company will
vote shares of the underlying funds at regular and special meetings of the
shareholders of the funds in accordance with instructions received from persons
having a voting interest in Fund U. The Company will vote shares for which it
has not received instructions in the same proportion as it votes shares for
which it has received instructions. However, if the 1940 Act or any regulation
thereunder should be amended, or if the present interpretation thereof should
change, and as a result the Company determines that it is permitted to vote
shares of the mutual funds in its own right, it may elect to do so.

The number of shares which a person has a right to vote will be determined as of
the date concurrent with the date established by the respective mutual fund for
determining shareholders eligible to vote at the meeting of the fund, and voting
instructions will be solicited by written communication before the meeting in
accordance with the procedures established by the mutual fund.

Each person having a voting interest in Fund U will receive periodic reports
relating to the fund(s) in which he or she has an interest, proxy material and a
form with which to give such instructions with respect to the proportion of the
fund shares held in Fund U corresponding to his or her interest in Fund U.

ACCOUNTS GIS, QB, MM, TGIS, TSB, TAS AND TB. Contract owners participating in
Accounts GIS, QB, MM, TGIS, TSB, TAS or TB will be entitled to vote at their
meetings on (i) any change in the fundamental investment policies of or other
policies related to the accounts requiring the owners' approval; (ii) amendment
of the investment advisory agreements; (iii) election of the members of the
Board of Managers of the accounts; (iv) ratification of the selection of an
independent public accountant for the accounts; (v) any other matters which, in
the future, under the 1940 Act require the owners' approval; and (vi) any other
business which may properly come before the meeting. The number of votes which
each contract owner or a participant may cast, including fractional votes, shall
be determined as of the date to be chosen by the Board of Managers within 75
days of the date of the meeting, and at least 20 days' written notice of the
meeting will be given.

Votes for which participants under a group Contract are entitled to instruct the
owner, but for which the owner has received no instructions, will be cast by the
owner for or against each proposal to be voted on only in the same proportion as
votes for which instructions have been received.

LEGAL PROCEEDINGS AND OPINIONS

Legal matters in connection with the federal laws and regulations affecting the
issue and sale of the contract described in this prospectus, as well as the
organization of the Company, its authority to issue variable annuity contracts
under Connecticut law and the validity of the forms of the variable

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<PAGE> 34

annuity contracts under Connecticut law, have been passed on by the General
Counsel of the Companies.

In March 1997, a purported class action entitled Patterman v. The Travelers,
Inc., et al. was commenced in the Superior Court of Richmond County, Georgia,
alleging, among other things, violations of the Georgia RICO statute and other
state laws by an affiliate of the Company, Primerica Financial Services, Inc.
and certain of its affiliates. Plaintiffs seek unspecified compensatory and
punitive damages and other relief. In October 1997, defendants answered the
complaint, denied liability and asserted numerous affirmative defenses. In
February 1998, on defendants' motion, the Superior Court of Richmond County
transferred the lawsuit to the Superior Court of Gwinnett County, Georgia.
Plaintiffs appealed the transfer order, and in December 1998 the Court of
Appeals of the State of Georgia reversed the lower court's decision. Defendants
petitioned the Georgia Supreme Court to hear an appeal from the decision of the
Court of Appeals, and the petition was granted in May 1998. In September 1999,
oral argument on defendants' petition was heard and, on February 28, 2000, the
Georgia Supreme Court affirmed the Georgia County Appeals and remanded the
matter to the Superior Court of Richmond County. In March 2000, defendants moved
the Georgia Supreme Court to reconsider its February 28, 2000 decision, and that
motion remains pending. Proceedings in the trial court have been stayed pending
appeal. Defendants intend to vigorously contest the litigation.

THE SEPARATE ACCOUNTS
- --------------------------------------------------------------------------------

THE SEPARATE ACCOUNTS

Two different types of separate accounts are available to Fund the Contracts
described in this prospectus. The first type, Fund U, is a unit investment trust
registered with the SEC under the 1940 Act. Fund U's assets are invested
exclusively in the shares of the underlying funds.

The second type of separate account available under the Contract, the "managed
separate accounts," (Accounts GIS, QB, MM, TGIS, TSB, TAS and TB) are
diversified, open-end management investment companies registered with the SEC
under the 1940 Act. The assets of the managed separate accounts are invested
directly in securities such as stocks, bonds or money market instruments which
are compatible with the stated investment policies of each separate account.
Each of the separate accounts available in connection with the Contract has
different investment objectives and fundamental investment policies.

The separate accounts were established on the following dates: Fund U -- May 16,
1983; Account GIS -- September 22, 1967; Account QB -- July 29, 1974; Account
MM -- December 29, 1981; Accounts TGIS and TSB -- October 30, 1986; and Accounts
TAS and TB -- January 2, 1987.

Under Connecticut law, the assets of the separate accounts will be held for the
exclusive benefit of its owners. Income, gains and losses, whether or not
realized, for assets allocated to the separate accounts, are in accordance with
the applicable annuity contracts, credited to or charged against the separate
accounts without regard to other income, gains or losses of the Company. The
assets in the separate accounts are not chargeable with liabilities arising out
of any other business which the Company may conduct. The obligations arising
under the variable annuity contracts are obligations of the Company.

For each managed separate account, neither the investment objective nor the
fundamental investment restrictions, as described in the SAI, can be changed
without a vote of the majority of the outstanding voting securities of the
Accounts, as defined by the 1940 Act.

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PERFORMANCE INFORMATION

From time to time, the Company may advertise several types of historical
performance for the funding options of Fund U. The Company may also advertise
the standardized average annual total returns of Accounts GIS, QB, MM, TGIS,
TSB, TAS, TB and Fund U, calculated in a manner prescribed by the SEC, as well
as the nonstandardized total returns, as described below.

STANDARDIZED METHOD. Quotations of average annual total returns are computed
according to a formula in which a hypothetical initial investment of $1,000 is
applied to the funding option, and then related to ending redeemable values over
one-, five-, and ten-year periods, or for a period covering the time during
which the funding option has been in existence, if less. These quotations
reflect the deduction of all recurring charges during each period (on a pro rata
basis in the case of fractional periods). The deduction for the annual
administrative charge is converted to a percentage of assets based on the actual
fee collected, divided by the average net assets for Contracts sold. Each
quotation assumes a total redemption at the end of each period with the
applicable withdrawal charge deducted at that time.

NONSTANDARDIZED METHOD. Nonstandardized "total returns" will be calculated in a
similar manner based on the performance of the funding options over a period of
time, usually for the calendar year-to-date, and for the past one-, three-,
five- and ten-year periods. Nonstandardized total returns will not reflect the
deduction of the annual contract administrative charge, which, if reflected,
would decrease the level of performance shown. The withdrawal charge is not
reflected because the Contract is designed for long-term investment.

For funding options that were in existence before they became available under
the Separate Account, the nonstandardized average annual total returns will
reflect the investment performance that such funding options would have achieved
(reduced by the applicable charges) had they been held under the Contract for
the period quoted. The total return quotations are based upon historical
earnings and are not necessarily representative of future performance.

GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including but not limited to, the Dow Jones Industrial
Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman
Brothers Long T-Bond Index, the Russell 1000, 2000, and 3000 Indices, the Value
Line Index, and the Morgan Stanley Capital International's EAFE Index).
Advertisements may also include published editorial comments and performance
rankings compiled by independent organizations (including, but not limited to,
Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that
monitor the performance of the Separate Account and the variable funding
options.

FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------

The following general discussion of the federal income tax consequences under
this Contract is not intended to cover all situations, and is not meant to
provide tax advice. Because of the complexity of the law and the fact that the
tax results will vary depending on many factors, you should consult your tax
adviser regarding your personal situation. For your information, a more detailed
tax discussion is contained in the SAI.

GENERAL TAXATION OF ANNUITIES

Congress has recognized the value of saving for retirement by providing certain
tax benefits, in the form of tax deferral, for money put into an annuity. The
Internal Revenue Code (Code) governs how this money is ultimately taxed,
depending upon the type of contract, qualified or non-qualified, and the manner
in which the money is distributed, as briefly described below.

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<PAGE> 36

TAX-FREE EXCHANGES. The Internal Revenue Code provides that, generally, no gain
or loss is recognized when an annuity contract is received in exchange for a
life, endowment, or annuity contract. Since different annuity contracts have
different expenses, fees and benefits, a tax-free exchange could result in your
investment becoming subject to higher or lower fees and/or expenses.

TYPES OF CONTRACTS: QUALIFIED OR NONQUALIFIED

If you purchase an annuity contract with proceeds of an eligible rollover
distribution from any pension plan, specially sponsored program, or individual
retirement annuity (IRA) with pre-tax dollars, your contract is referred to as a
qualified contract. Some examples of qualified contracts are: IRAs, 403(b)
annuities, pension and profit-sharing plans (including 401(k) plans), Keogh
Plans, and certain other qualified deferred compensation plans. If you purchase
the contract on an individual basis with after-tax dollars and not under one of
the programs described above, your contract is referred to as nonqualified.

NONQUALIFIED ANNUITY CONTRACTS

As the owner of a nonqualified annuity, you do not receive any tax benefit
(deduction or deferral of income) on purchase payments, but you will not be
taxed on increases in the value of your contract until a distribution
occurs -- either as a withdrawal (distribution made prior to the maturity date),
or as annuity payments. When a withdrawal is made, you are taxed on the amount
of the withdrawal that is considered earnings. Similarly, when you receive an
annuity payment, part of each payment is considered a return of your purchase
payments and will not be taxed. The remaining portion of the annuity payment
(i.e., any earnings) will be considered ordinary income for tax purposes.

If a nonqualified annuity is owned by other than an individual, however, (e.g.,
by a corporation), increases in the value of the contract attributable to
purchase payments made after February 28, 1986 are includible in income
annually. Furthermore, for contracts issued after April 22, 1987, if you
transfer the contract without adequate consideration all deferred increases in
value will be includible in your income at the time of the transfer.

If you make a partial withdrawal, this money will generally be taxed as first
coming from earnings, (income in the contract), and then from your purchase
payments. These withdrawn earnings are includible in your income. (See "Penalty
Tax for Premature Distributions" below.) There is income in the contract to the
extent the contract value exceeds your investment in the contract. The
investment in the contract equals the total purchase payments you paid less any
amount received previously which was excludible from gross income. Any direct or
indirect borrowing against the value of the contract or pledging of the contract
as security for a loan will be treated as a cash distribution under the tax law.

Federal tax law requires that nonqualified annuity contracts meet minimum
mandatory distribution requirements upon the death of the contract owner,
including the first of joint owners. If these requirements are not met, the
surviving joint owner, or the beneficiary, will have to pay taxes prior to
distribution. The distribution required depends, among other things, upon
whether an annuity option is elected or whether the new contract owner is the
surviving spouse. We will administer Contracts in accordance with these rules
and we will notify you when you should begin receiving payments.

QUALIFIED ANNUITY CONTRACTS

Under a qualified annuity, since amounts paid into the contract have not yet
been taxed, the full amount of all distributions, including lump-sum withdrawals
and annuity payments, are taxed at the ordinary income tax rate unless the
distribution is transferred to an eligible rollover account or contract. The
Contract is available as a vehicle for IRA rollovers and for other qualified
contracts. There are special rules which govern the taxation of qualified
contracts, including withdrawal

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restrictions, requirements for mandatory distributions, and contribution limits.
We have provided a more complete discussion in the SAI.

PENALTY TAX FOR PREMATURE DISTRIBUTIONS

Taxable distributions taken before the contract owner has reached the age of
59 1/2 will be subject to a 10% additional tax penalty unless the distribution
is taken in a series of periodic distributions, for life or life expectancy, or
unless the distribution follows the death or disability of the contract owner.
Other exceptions may be available in certain qualified plans.

DIVERSIFICATION REQUIREMENTS FOR VARIABLE ANNUITIES

The Code requires that any nonqualified variable annuity contracts based on a
separate account shall not be treated as an annuity for any period if
investments made in the account are not adequately diversified. Final tax
regulations define how separate accounts must be diversified. The Company
monitors the diversification of investments constantly and believes that its
accounts are adequately diversified. The consequence of any failure to diversify
is essentially the loss to the Contract Owner of tax deferred treatment. The
Company intends to administer all contracts subject to this provision of law in
a manner that will maintain adequate diversification.

OWNERSHIP OF THE INVESTMENTS

Assets in the separate accounts, also referred to as segregated asset accounts,
must be owned by the Company and not by the Contract Owner for federal income
tax purposes. Otherwise, the deferral of taxes is lost and income and gains from
the accounts would be includable annually in the Contract Owner's gross income.

The Internal Revenue Service has stated in published rulings that a variable
contract owner will be considered the owner of the assets of a segregated asset
account if the owner possesses an incident of ownership in those assets, such as
the ability to exercise investment control over the assets. The Treasury
Department announced, in connection with the issuance of temporary regulations
concerning investment diversification, that those regulations "do not provide
guidance concerning the circumstances in which investor control of the
investments of a segregated asset account may cause the investor, rather than
the insurance company, to be treated as the owner of the assets of the account."
This announcement, dated September 15, 1986, also stated that the guidance would
be issued by way of regulations or rulings on the "extent to which policyholders
may direct their investments to particular subaccounts [of a segregated asset
account] without being treated as owners of the underlying assets." As of the
date of this prospectus, no such guidance has been issued.

The Company does not know if such guidance will be issued, or if it is, what
standards it may set. Furthermore, the Company does not know if such guidance
may be issued with retroactive effect. New regulations are generally issued with
a prospective-only effect as to future sales or as to future voluntary
transactions in existing contracts. The Company therefore reserves the right to
modify the contract as necessary to attempt to prevent Contract Owners from
being considered the owner of the assets of the separate account.

MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS

Federal tax law requires that minimum annual distributions begin by April 1st of
the calendar year following the calendar year in which an IRA owner attains age
70 1/2. Participants in qualified plans and 403(b) annuities may defer minimum
distributions until the later of April 1st of the calendar year following the
calendar year in which they attain age 70 1/2 or the year of retirement.
Distributions must begin or be continued according to required patterns
following the death of the contract owner or annuitant of both qualified and
nonqualified annuities.

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TAXATION OF DEATH BENEFIT PROCEEDS

Amounts may be distributed from a Contract because of the death of an owner or
annuitant. Generally, such amounts are includible in the income of the recipient
as follows: (i) if distributed in a lump sum, they are taxed in the same manner
as a full surrender of the contract; or (ii) if distributed under a payment
option, they are taxed in the same way as annuity payments.

MANAGED SEPARATE ACCOUNTS
- --------------------------------------------------------------------------------

As described earlier in this prospectus, there are various funding options
available to you under your Universal Annuity Contract. You may select from
several underlying funding options, which are described in detail in separate
prospectuses. In addition, you may choose to invest in one or more of the
managed separate accounts (the "Accounts") also offered through your Contract.
Detailed information regarding these Accounts such as investment objectives,
investment techniques, risk factors and management of the Accounts, is provided
below. Not all funding options or Accounts may be available to you. Please refer
to your Contract. There can be no assurance that the Accounts' investment
objectives will be achieved.

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THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT GIS)
- --------------------------------------------------------------------------------

INVESTMENT ADVISER: TIMCO

PORTFOLIO MANAGER: Sandip Bhagat

INVESTMENT OBJECTIVE: Long-term accumulation of principal through capital
appreciation and retention of net investment income.

KEY INVESTMENTS: Common stock of large U.S. companies.

SELECTION PROCESS: Account GIS invests primarily in stocks of large U.S.
companies representing a wide range of industries. Stock selection is based on a
quantitative screening process which favors companies that achieve earnings
growth above consensus expectations, and whose stocks offer attractive relative
value. In order to achieve consistent performance, TIMCO manages Account GIS to
mirror the overall risk, sector weightings and growth value style
characteristics of the Standard & Poor's 500 Stock Index ("S&P 500"). The S&P
500 is a value-weighted equity index comprised mainly of large-company stocks.

ADDITIONAL INVESTMENTS, INVESTMENT STRATEGIES AND TECHNIQUES: Account GIS, to a
lesser extent, will invest in other securities. A complete description of all
investments, and their associated risks, is contained in the SAI. These
additional investments include, but are not limited to, the following:

- fixed-income securities such as bonds and notes, including U.S.
Government securities;

- exchange-traded stock index futures

- covered call options, put options

- foreign securities

For a complete list of all investments available to Account GIS, please refer to
the "Investments at a Glance" table at the end of this section and in the SAI.

PRINCIPAL RISK FACTORS: Account GIS is most subject to equities risk. For a
complete discussion of equities risk and other risks carried by the investments
of Account GIS, please refer to the "Investments, Practices and Risks" section
of this prospectus. Please see the SAI for a detailed description of all
investments, and their associated risks, available to Account GIS.

FUNDAMENTAL INVESTMENT POLICIES

The fundamental investment policies of Account GIS permit it to:

1. invest up to 5% of its assets in the securities of any one issuer
(exclusive of securities issued or guaranteed by the United States
government, its agencies or instrumentalities;

2. borrow from banks in amounts of up to 5% of its assets, but only for
emergency purposes;

3. purchase interests in real estate represented by securities for which
there is an established market;

4. make loans through the acquisition of a portion of a privately placed
issue of bonds, debentures or other evidences of indebtedness of a type
customarily purchased by institutional investors;

5. acquire up to 10% of the voting securities of any one issuer (it is the
present practice of Account GIS not to exceed 5% of the voting
securities of any one issuer);

6. make purchases on margin in the form of short-term credits which are
necessary for the clearance of transactions; and place up to 5% of its
net asset value in total margin deposits for positions in futures
contracts; and

7. invest up to 5% of its assets in restricted securities (securities which
may not be publicly offered without registration under the Securities
Act of 1933).

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THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT QB)
- --------------------------------------------------------------------------------

INVESTMENT ADVISER: TAMIC

PORTFOLIO MANAGER: F. Denney Voss

INVESTMENT OBJECTIVE: Current income, moderate capital volatility and total
return.

KEY INVESTMENTS: Investment grade debt securities and money market instruments.

SELECTION PROCESS: The adviser expects that the Fund's investments generally
will maintain an average duration of 5 years or less. Investment in longer term
obligations may be made if the manager decides that the investment yields
justify a longer term commitment. No more than 25% of the value of the Account's
total assets will be invested in any one industry. The portfolio will be
actively managed and, under certain market conditions, investments may be sold
prior to maturity.

ADDITIONAL INVESTMENTS, INVESTMENT STRATEGIES AND TECHNIQUES: Account QB may
invest in many types of fixed-income securities and employ various types of
strategies. A complete description of all investments, and their associated
risks, is contained in the SAI. These additional investments include, but are
not limited to, the following:

- treasury bills

- repurchase agreements

- commercial paper

- certificates of deposit

- banker's acceptances
- bonds, notes, debentures

- convertible securities

- when-issued securities

- interest rate future contracts

For a complete list of all investments available to Account QB, please refer to
the "Investments at a Glance" table at the end of this section and in the SAI.

PRINCIPAL RISK FACTORS: Account QB is most subject to fixed-income securities
risk. For a complete discussion of fixed-income securities risk and other risks
carried by the investments of Account QB, please refer to the "Investments,
Practices and Risks" section of this prospectus.

FUNDAMENTAL INVESTMENT POLICIES

The fundamental investment policies of Account QB permit it to:

1. invest up to 15% of the value of its assets in the securities of any one
issuer (exclusive of obligations of the United States government and its
instrumentalities, for which there is no limit);

2. borrow from banks in amounts of up to 5% of its assets, but only for
emergency purposes;

3. purchase interests in real estate represented by securities for which
there is an established market;

4. make loans through the acquisition of a portion of a privately placed
issue of bonds, debentures or other evidences of indebtedness of a type
customarily purchased by institutional investors;

5. acquire up to 10% of the voting securities of any one issuer (it is the
present practice of Account QB not to exceed 5% of the voting securities
of any one issuer); and

38
<PAGE> 41

THE TRAVELERS MONEY MARKET ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT MM)
- --------------------------------------------------------------------------------

INVESTMENT ADVISER: TAMIC

PORTFOLIO MANAGER: Emil J. Molinaro, Jr.

INVESTMENT OBJECTIVE: Preservation of capital, a high degree of liquidity and
high current income.

KEY INVESTMENTS: Money market instruments.

SELECTION PROCESS: The Account is a "money market" Account that invests in high
quality U.S. dollar denominated money market instruments. High quality
instruments generally are rated in the highest rating category by national
rating agencies or are deemed comparable. Eligible securities must have a
remaining maturity of 13 months or less (subject to certain exceptions). The
Account's manager selects from the following or other similar investments, as
described in the "Investments at a Glance" table at the end of this section and
in the SAI.

COMMERCIAL PAPER AND
SHORT-TERM CORPORATE DEBT Commercial paper is short-term unsecured
promissory notes issued by corporations to
finance their short-term credit needs. Commercial
paper is usually sold at a discount and is issued
with a maturity of not more than 9 months.
Short-term corporate debt that the Fund may
purchase includes notes and bonds issued by
corporations to finance longer-term credit needs.
These debt securities are issued with maturities
of more than 9 months. The Account may purchase
short-term corporate debt with a remaining
maturity of 397 days or less at the time of
purchase.

U.S. GOVERNMENT MONEY MARKET
SECURITIES These are short-term debt instruments issued or
guaranteed by the U.S. Government or its
agencies, instrumentalities or
government-sponsored enterprises. The full faith
and credit of the United States does not back all
U.S. Government securities. For example,
securities issued by Fannie Mae are supported by
that agency's right to borrow from the U.S.
Treasury under certain circumstances. Other U.S.
government securities, such as those issued by
the Federal Farm Credit Banks Funding
Corporation, are supported only by the credit of
the entity that issued them.

CREDIT AND LIQUIDITY
ENHANCEMENTS Enhancements include letters of credit,
guarantees, puts and demand features, and
insurance provided by domestic or foreign
entities such as banks and other financial
institutions. Credit and liquidity enhancements
are designed to enhance the credit quality of an
instrument to eligible security status. However,
they expose the Fund to the credit risk of the
entity providing the credit or liquidity
enhancement. Changes in the credit quality of the
provider could affect the value of the security
and the Fund's share price.

PUT FEATURES Entitle the holder to put or sell a security back
to the issuer or another party who issued the
put. Demand features, standby commitments, and
tender options are types of put features. In
exchange for getting the put, the Fund may accept
a lower rate of interest. The Fund evaluates the
credit quality of the put provider as well as the
issuer, if a different party. The put provider's
creditworthiness affects the credit quality of
the investment.

39
<PAGE> 42

VARIABLE AND FLOATING RATE
SECURITIES Have interest rates that adjust periodically,
which may be either at specific intervals or
whenever an external benchmark rate changes.
Interest-rate adjustments are designed to help
maintain a stable price for the security.

REPURCHASE AGREEMENTS These agreements permit the Account to buy a
security at one price and, at the same time,
agree to sell it back at a higher price. Delays
or losses to the Account could result if the
other party to the agreement defaults or becomes
insolvent.

RISK FACTORS

Corporate debt securities held by the Account may be subject to several types of
investment risk, including market or interest-rate risk. This risk relates to
the change in market value caused by fluctuations in prevailing interest rates
and credit risk, which, in turn, relates to the ability of the issuer to make
timely interest payments and to repay the principal at maturity. Short-term
corporate debt is less subject to market or interest-rate risk than longer-term
corporate debt. Certain corporate debt securities may be subject to call or
income risk. This risk appears during periods of falling interest rates and
involves the possibility that securities with high interest rates will be
prepaid or "called" by the issuer prior to maturity.

Because interest rates on money market instruments fluctuate in response to
economic factors, rates on the Account's short-term investments and the daily
dividends paid to its shareholders will vary, rising or falling with short-term
interest rates generally. Yields from short-term securities may be lower than
yields from longer-term securities. Also, the value of the Account's securities
generally varies inversely with interest rates, the amount of outstanding debt
and other factors. This means that the value of the Account's investments
usually increases as short-term interest rates fall and decreases as short-term
interest rates rise.

Account investments may be unprofitable in a time of sustained high inflation.
In addition, the Account's investments in certificates of deposit issued by U.S.
branches of foreign banks and foreign branches of U.S. banks involve somewhat
more risk, but also more potential reward, than investments in comparable
domestic obligations.

FUNDAMENTAL INVESTMENT POLICIES

The fundamental investment policies of Account MM permit it to:

1. invest up to 25% of its assets in the securities of issuers in any
single industry (exclusive of securities issued by domestic banks and
savings and loan associations, or securities issued or guaranteed by the
United States government, its agencies, authorities or
instrumentalities); neither all finance companies, as a group, nor all
utility companies, as a group, are considered a single industry for the
purpose of this restriction;

2. invest up to 5% of its assets in the securities of any one issuer, other
than securities issued or guaranteed by the United States Government.
However, Account MM may invest up to 25% of its total assets in first
tier securities, as defined in Rule 2a-7, of a single issuer for a
period of up to three business days after the purchase thereof;

3. acquire up to 10% of the outstanding securities of any one issuer
(exclusive of securities issued or guaranteed by the United States
government, its agencies or instrumentalities);

4. borrow money from banks on a temporary basis in an aggregate amount not
to exceed one third of Account MM's assets (including the amount
borrowed); and

5. pledge, hypothecate or transfer, as security for indebtedness, any
securities owned or held by Account MM as may be necessary in connection
with any borrowing mentioned above and in an aggregate amount of up to
5% of Account MM's assets.

40
<PAGE> 43

THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT TGIS)
- --------------------------------------------------------------------------------

INVESTMENT ADVISER: TIMCO

PORTFOLIO MANAGERS: Sandip Bhagat

INVESTMENT OBJECTIVE: Long-term accumulation of principal through capital
appreciation and retention of net investment income.

KEY INVESTMENTS: Common stock of large U.S. companies.

SELECTION PROCESS: Account TGIS invests primarily in stocks of large U.S.
companies representing a wide range of industries, while maintaining a highly
marketable portfolio in order to accommodate cash flows associated with
market-timing moves. Stock selection is based on a quantitative screening
process which favors companies that achieve earnings growth above consensus
expectations, and whose stocks offer attractive relative value. In order to
achieve consistent performance, TIMCO manages Account TGIS to mirror the overall
risk, sector weightings and growth value style characteristics of the Standard &
Poor's 500 Stock Index ("S&P 500"). The S&P 500 is a value-weighted equity index
comprised mainly of large-company stocks.

ADDITIONAL INVESTMENTS, INVESTMENT STRATEGIES AND TECHNIQUES: Account TGIS will
also use exchange-traded financial futures contracts to facilitate market-timed
moves, and as a hedge to protect against changes in stock prices or interest
rates. Account TGIS, to a lesser extent, may invest in other securities. These
additional investments include, but are not limited to, the following:

- fixed-income securities such as bonds and notes;

- including U.S. Government securities

- covered call options, put options

- foreign securities

For a complete list of all investments available to Account TGIS, please refer
to the "Investments at a Glance" table at the end of this section and in the
SAI.

PRINCIPAL RISK FACTORS: Account TGIS is most subject to equities risk and
market-timing risk. For a complete discussion of these and other risks carried
by the investments of Account GIS, please refer to the "Investments, Practices
and Risks" section of this prospectus. Please see the SAI for a detailed
description of all investments, and their associated risks, available to Account
TGIS.

FUNDAMENTAL INVESTMENT POLICIES

The fundamental investment policies of Account TGIS are the same as Account GIS.
(See "Account GIS -- Fundamental Investment Policies.")

THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT TSB)
- --------------------------------------------------------------------------------

INVESTMENT ADVISER: TIMCO

PORTFOLIO MANAGER: Emil Molinaro, Jr.

INVESTMENT OBJECTIVE: High current income with limited price volatility while
maintaining a high degree of liquidity.

KEY INVESTMENTS: High quality fixed-income securities.

41
<PAGE> 44

SELECTION PROCESS: The Account invests in high quality U.S. dollar denominated
instruments. High quality instruments generally are rated in the highest rating
category by national rating agencies or are deemed comparable. The weighted
average maturity of the portfolio is not expected to exceed 9 months. The
Account's manager selects from the following or other similar investments, as
described in the "Investments at a Glance" table at the end of this section and
in the SAI.

COMMERCIAL PAPER AND
SHORT-TERM CORPORATE DEBT Commercial paper is short-term unsecured
promissory notes issued by corporations to
finance their short-term credit needs. Commercial
Paper is usually sold at a discount and is issued
with a maturity of not more than 9 months.
Short-term corporate debt that the Fund may
purchase includes notes and bonds rated at least
AA with final maturities of 18 months or less at
time of purchase.

U.S. GOVERNMENT SECURITIES These are short-term debt instruments issued or
guaranteed by the U.S. Government or its
agencies, instrumentalities or
government-sponsored enterprises. The full faith
and credit of the United States does not back all
U.S. Government securities. For example,
securities issued by Fannie Mae are supported by
that agency's right to borrow from the U.S.
Treasury under certain circumstances. Other U.S.
Government securities, such as those issued by
the Federal Farm Credit Banks Funding
Corporation, are supported only by the credit of
the entity that issued them.

REPURCHASE AGREEMENTS Permit the Account to buy a security at one price
and, at the same time, agree to sell it back at a
higher price. Delays or losses to the Account
could result if the other party to the agreement
defaults or becomes insolvent.

RISK FACTORS

FUNDAMENTAL INVESTMENT POLICIES

The fundamental investment policies of Account TSB permit it to:

42
<PAGE> 45

2. invest up to 10% of its assets in the securities of any one issuer,
including repurchase agreements with any one bank or dealer (exclusive
of securities issued or guaranteed by the United States government, its
agencies or instrumentalities);

3. acquire up to 10% of the outstanding securities of any one issuer
(exclusive of securities issued or guaranteed by the United States
government, its agencies or instrumentalities);

4. borrow money from banks on a temporary basis in an aggregate amount not
to exceed one third of Account TSB's assets (including the amount
borrowed); and

5. pledge, hypothecate or transfer, as security for indebtedness, any
securities owned or held by Account TSB as may be necessary in
connection with any borrowing mentioned above and in an aggregate amount
of up to 5% of Account TSB's assets.

THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT TAS)
- --------------------------------------------------------------------------------

INVESTMENT ADVISER: TIMCO

PORTFOLIO MANAGER: Sandip Bhagat

INVESTMENT OBJECTIVE: Growth of capital.

KEY INVESTMENTS: Common stock of mid-size U.S. companies.

SELECTION PROCESS: In selecting investments for the portfolio, TIMCO identifies
stocks which appear to be undervalued. A computer model reviews over one
thousand stocks using fundamental and technical criteria such as price relative
to book value, earnings growth and momentum, and the change in price relative to
a broad composite stock index.

Computer-aided analysis may also be used to match certain characteristics of the
portfolio, such as industry sector representation, to the characteristics of a
market index, or to impose a tilt toward certain attributes. Account TAS
currently focuses on mid-sized domestic companies with market capitalizations
that fall between $500 million and $10 billion.

ADDITIONAL INVESTMENTS, INVESTMENT STRATEGIES AND TECHNIQUES: Account TAS may
invest in smaller or larger companies without limitation. A complete description
of all investments, and their associated risks, is contained in the SAI. These
additional investments include, but are not limited to, the following:

<TABLE>
<S> <C>
- - convertible securities - illiquid securities
- - rights and warrants - money market instruments
- - foreign securities - call or put options
</TABLE>

In addition, Account TAS will use exchange-traded futures contracts to
facilitate market-timed moves. For a complete list of all investments available
to Account TAS, please refer to the "Investments at a Glance" table at the end
of this section and in the SAI.

PRINCIPAL RISK FACTORS: Account TAS is most subject to equities risk, including
smaller companies risk, and market-timing risk. For a complete discussion of
these types of risk as well as other risks carried by the investments of Account
TAS, please refer to the "Investments, Practices and Risks" Section of this
prospectus. Please see the SAI for a detailed description of all investments,
and their associated risks, available to Account TAS.

FUNDAMENTAL INVESTMENT POLICIES

The fundamental investment policies of Account TAS permit it to:

1. invest up to 5% of its assets in the securities of any one issuer;

2. borrow money from banks in amounts of up to 10% of its assets, but only
as a temporary measure for emergency or extraordinary purposes;

43
<PAGE> 46

3. pledge up to 10% of its assets to secure borrowings;

4. invest up to 25% of its assets in the securities of issuers in the same
industry; and

5. invest up to 10% of its assets in repurchase agreements maturing in more
than seven days and securities for which market quotations are not
readily available.

THE TRAVELERS TIMED BOND ACCOUNT FOR VARIABLE ANNUITIES
(ACCOUNT TB)
- --------------------------------------------------------------------------------

NOTE: The Travelers Timed Bond Account is not currently available to new
contract owners.

INVESTMENT ADVISER: TAMIC

PORTFOLIO MANAGER: Richard John

INVESTMENT OBJECTIVE: Current income and total return.

KEY INVESTMENTS: Highest credit quality debt securities.

SELECTION PROCESS: Account TB invests primarily in direct or indirect
obligations of the United States and its instrumentalities, and in obligations
of independent Federal Agencies. These debt securities include, but are not
limited to Treasury Bills, Treasury Notes and Treasury Bonds. Some examples of
the U.S. instrumentalities, enterprises or agencies in whose Securities the
Account may invest are:

<TABLE>
<S> <C>
- - Government National Mortgage Association - Farm Credit System
- - Small Business Administration - Federal Home Loan Mortgage Corporation
- - Federal Housing Association - Student Loan Marketing Association
- - Export -- Import Bank of the U.S.
</TABLE>

For a complete list of all investments available to Account TB, please refer to
the "Investments at a Glance" at the end of this section and in the SAI.

ADDITIONAL INVESTMENTS, INVESTMENT STRATEGIES AND TECHNIQUES: In addition,
Account TB may use exchange-traded futures contracts to facilitate market timed
moves, and as a hedge to protect against changes in interest rates. A complete
description of all investments and associated risks is contained in the SAI.
These additional investments include, but are not limited to :

- money market investments

- when-issued securities

- covered call options

PRINCIPAL RISK FACTORS: Account TB is most subject to fixed-income securities
risk and market timing risk. For a complete discussion of these and other risks
carried by the investments of Account TB, please refer to the "Investments,
Practices and Risks" section of this prospectus. Please see the SAI for a
detailed description of all investments, and their associated risks, available
to Account TB.

FUNDAMENTAL INVESTMENT POLICIES

The fundamental investment policies of Account TB permit it to:

1. invest up to 5% of its assets in the securities of any one issuer
(exclusive of securities of the United States government, its agencies
or instrumentalities, for which there is no limit);

2. borrow money from banks in amounts of up to 10% of its assets, but only
as a temporary measure for emergency or extraordinary purposes;

3. pledge up to 10% of its assets to secure borrowings;

44
<PAGE> 47

4. invest up to 25% of its assets in the securities of issuers in the same
industry (exclusive of securities of the U.S. government, its agencies
or instrumentalities, for which there is no limit); and

5. invest up to 10% of its assets in repurchase agreements maturing in more
than seven days.

INVESTMENTS, PRACTICES AND RISKS OF THE
MANAGED SEPARATE ACCOUNTS
- --------------------------------------------------------------------------------
Each Account invests in various instruments subject to its particular investment
policy. The Accounts invest in some or all of the following, as indicated below
and in the Statement of Additional Information. For a free copy of the Statement
of Additional Information, see the front cover of this prospectus.

EQUITIES
(GIS, QB, TAS, TGIS) Equity securities include common and preferred
stock, warrants, rights, depository receipts and
shares, trust certificates, and real estate
instruments.

Equities are subject to market risk. Many factors
affect the stock market prices and dividend
payouts of equity investments. These factors
include general business conditions, investor
confidence in the economy, and current conditions
in a particular industry or company. Each company
determines whether or not to pay dividends on
common stock. Equity securities are subject to
financial risks relating to the issuer's earning
stability and overall financial soundness.
Smaller and emerging growth companies are
particularly sensitive to these factors.

Equity securities that are traded
over-the-counter may be more volatile than
exchange-listed stocks, and the Fund may
experience difficulty in purchasing or selling
these securities at a fair price.

When you sell your shares, they may be worth more
or less than what you paid for them.

FIXED INCOME INVESTMENTS
(All Accounts) Each Account may invest in fixed income
securities. Fixed income securities include U.S.
government securities, certificates of deposit,
and short-term money market instruments. Fixed
income securities may have all types of interest
rate payment and reset terms, including fixed
rate, adjustable rate, zero coupon, contingent,
deferred, payment in kind and auction rate
features.

The value of debt securities varies inversely
with interest rates. This means generally that
the value of these investments increases as
short-term interest rates fall and decreases as
short-term interest rates rise. Yields from
short-term securities normally may be lower than
yields from longer-term securities. A bond's
price is affected by its issuer's credit quality.
An issuer may not always make payments on a fixed
income security. Some fixed income securities,
such as mortgage-backed securities are subject to
prepayment risk, which occurs when an issuer can
prepay the principal owed on a security before
its maturity.

High-yield, high-risk securities, commonly called
"junk bonds," are considered speculative. While
generally providing

45
<PAGE> 48

greater income than investments in higher-quality
securities, these securities will involve greater
risk of principal and income (including the
possibility of default or bankruptcy of the
issuers of the security).

TACTICAL ASSET ALLOCATION
RISKS
(TAS, TGIS, TG, TSB) If you participate in a tactical asset allocation
agreement, you may be subject to the following
additional risks: (1) higher transaction costs;
(2) higher portfolio turnover rate; (3)
investment return goals not being achieved by the
registered investment advisers which provide
tactical asset allocation services; and (4)
higher account expenses for depleting and, then
starting up the account. Actions by the
registered investment advisers which provide
tactical asset allocation services may also
increase risks generally found in any investment,
i.e., the failure to achieve an investment
objective, and possible lower yield. In addition,
if more than one tactical asset allocation
strategy uses a Market Timed Account, those who
invest in the Market Timed Account when others
are transferred into or out of that Account by
the registered investment advisers may bear part
of the direct costs incurred by those individuals
who were transferred. For example, if 90% of a
Market Timed Account is under one tactical asset
allocation strategy, and those funds are
transferred into or out of that Account, those
constituting the other 10% of the Market Timed
Account may bear a higher portion of the expense
for the transfer.

FOREIGN SECURITIES
(GIS, QB, TAS, TGIS) An investment in foreign securities involves risk
in addition to those of U.S. securities,
including possible political and economic
instability and the possible imposition of
exchange controls or other restrictions on
investments. The Account also bears an
"information" risk associated with the different
accounting, auditing, and financial reporting
standards in many foreign countries. If an
Account invests in securities denominated or
quoted in currencies other than the U.S. dollar,
changes in foreign currency rates relative to the
U.S. dollar will affect the U.S. dollar value of
the Account's assets.

DERIVATIVES AND HEDGING
TECHNIQUES
(GIS, QB, TAS, TGIS, TB) An Account may use derivative contracts, such as
futures and options on securities, for any of the
following purposes:

- To hedge against the economic impact of adverse
changes in the market value of its securities,
due to changes in stock market prices, currency
exchange rates or interest rates;

- As a substitute for buying or selling
securities

- To enhance return

Even a small investment in derivative contracts
can have a big impact on an Account's stock
market, currency and interest rate exposure.
Therefore, using derivatives can
disproportionately increase losses and reduce
opportunities for gain when stock prices,
currency rates or interest rates are changing.

For a more complete description of derivative and
hedging techniques and their associated risks,
please refer to the Statement of Additional
Information.

46
<PAGE> 49

OTHER RISK FACTORS

SELECTION RISK
(GIS, QB, TAS, TGIS) Account investors are subject to selection risk
in that a strategy used, or stock selected, may
fail to have the desired effect. Specifically,
stocks believed to show potential for capital
growth may not achieve that growth. Strategies or
instruments used to hedge against a possible risk
or loss may fail to protect against the
particular risk or loss.

TEMPORARY DEFENSIVE POSITIONS
(All Accounts) The Accounts may depart from principal investment
strategies in response to adverse market,
economic or political conditions by taking
temporary defensive positions in various types of
money market and short-term debt securities. If
an Account takes a temporary defensive position,
it is not pursuing its investment goal.

47
<PAGE> 50

INVESTMENTS AT A GLANCE
- --------------------------------------------------------------------------------

Each Account invests in various instruments subject to its particular investment
policies. The Accounts invest in some or all of the following, as indicated
below. These techniques and practices are described together with their risks,
in the SAI.

- ---------------------------------------------------------------------------------------------------------------------------------
INVESTMENT TECHNIQUES GIS MM QB TAS TGIS TSB TB
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Affiliated Bank Transactions
- ---------------------------------------------------------------------------------------------------------------------------------
American Depositary Receipts X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Asset-Backed Mortgage Securities X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Bankers Acceptances X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Buying Put and Call Options X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Certificates of Deposit X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Commercial Paper X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Convertible Securities X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Corporate Asset-Backed Securities X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Debt Securities X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Emerging Market Securities
- ---------------------------------------------------------------------------------------------------------------------------------
Equity Securities X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Floating & Variable Rate Instruments X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Foreign Securities X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Forward Contracts on Foreign Currency
- ---------------------------------------------------------------------------------------------------------------------------------
Futures Contracts X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Illiquid Securities X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Indexed Securities X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Index Futures Contracts X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Investment Company Securities
- ---------------------------------------------------------------------------------------------------------------------------------
Investment in Unseasoned Companies X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Lending Portfolio Securities
- ---------------------------------------------------------------------------------------------------------------------------------
Letters of Credit X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Loan Participations
- ---------------------------------------------------------------------------------------------------------------------------------
Money Market Instruments X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Options on Foreign Currencies
- ---------------------------------------------------------------------------------------------------------------------------------
Options on Index Futures Contracts X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Options on Stock Indices X X
- ---------------------------------------------------------------------------------------------------------------------------------
Other Direct Indebtedness X X
- ---------------------------------------------------------------------------------------------------------------------------------
Real Estate-Related Instruments X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Repurchase Agreements X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Reverse Repurchase Agreements X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Short Sales "Against the Box"
- ---------------------------------------------------------------------------------------------------------------------------------
Short-Term Money Market Instruments X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Swap Agreements
- ---------------------------------------------------------------------------------------------------------------------------------
Temporary Bank Borrowing X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
U.S. Government Securities X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Variable Amount Master Demand Notes X X X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
When-Issued and Delayed Delivery Securities X X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
Writing Covered Call Options X X X X
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>

48
<PAGE> 51

APPENDIX
A
CONDENSED FINANCIAL INFORMATION
- -------------------------------------------------------------------------

THE TRAVELERS FUND U FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES

<TABLE>
<CAPTION>
1999 1998 1997 1996
------------------- ------------------- ----------------- -----------------
Q NQ Q NQ Q NQ Q NQ
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
CAPITAL APPRECIATION FUND*
Unit Value at beginning of year... $ 6.033 $ 6.257 $ 3.779 $ 3.920 $ 3.034 $3.146 $ 2.396 $2.485
Unit Value at end of year......... 9.148 9.487 6.033 6.257 3.779 3.920 3.034 3.146
Number of units outstanding at end
of year (thousands)............. 131,075 11,805 104,732 11,574 84,250 9,791 64,294 7,828
HIGH YIELD BOND TRUST
Unit Value at beginning of year... $ 3.432 $ 3.468 $ 3.261 $ 3.295 $ 2.833 $2.863 $ 2.472 $2.498
Unit Value at end of year......... 3.539 3.576 3.432 3.468 3.261 3.295 2.833 2.863
Number of units outstanding at end
of year (thousands)............. 6,319 898 6,959 1,011 6,673 973 5,312 657
MANAGED ASSETS TRUST
Unit Value at beginning of year... $ 4.462 $ 4.802 $ 3.720 $ 4.004 $ 3.105 $3.342 $ 2.763 $2.975
Unit Value at end of year......... 5.033 5.417 4.462 4.802 3.720 4.004 3.105 3.342
Number of units outstanding at end
of year (thousands)............. 54,963 6,248 53,900 5,958 53,841 5,164 55,055 4,632

<CAPTION>
1995
-----------------
Q NQ
- ----------------------------------- -----------------
<S> <C> <C>
CAPITAL APPRECIATION FUND*
Unit Value at beginning of year... $ 1.779 $1.845
Unit Value at end of year......... 2.396 2.485
Number of units outstanding at end
of year (thousands)............. 45,979 4,415
HIGH YIELD BOND TRUST
Unit Value at beginning of year... $ 2.167 $2.189
Unit Value at end of year......... 2.472 2.498
Number of units outstanding at end
of year (thousands)............. 4,592 498
MANAGED ASSETS TRUST
Unit Value at beginning of year... $ 2.201 $2.369
Unit Value at end of year......... 2.763 2.975
Number of units outstanding at end
of year (thousands)............. 57,020 4,114
</TABLE>

<TABLE>
<CAPTION>
1994 1993 1992 1991 1990
----------------- ----------------- ----------------- ----------------- -------
Q NQ Q NQ Q NQ Q NQ Q
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CAPITAL APPRECIATION FUND*
Unit Value at beginning of year... $ 1.892 $1.962 $ 1.665 $1.727 $ 1.433 $1.487 $ 1.075 $1.114 $ 1.157
Unit Value at end of year......... 1.779 1.845 1.892 1.962 1.665 1.727 1.433 1.487 1.075
Number of units outstanding at end
of year (thousands)............. 40,160 3,605 30,003 2,825 16,453 1,020 12,703 887 11,356
HIGH YIELD BOND TRUST
Unit Value at beginning of year... $ 2.222 $2.245 $ 1.974 $1.994 $ 1.767 $1.785 $ 1.418 $1.433 $ 1.573
Unit Value at end of year......... 2.167 2.189 2.222 2.245 1.976 1.994 1.767 1.785 1.418
Number of units outstanding at end
of year (thousands)............. 4,708 585 5,066 603 4,730 428 4,018 344 4,045
MANAGED ASSETS TRUST
Unit Value at beginning of year... $ 2.281 $2.455 $ 2.111 $2.273 $ 2.034 $2.189 $ 1.691 $1.821 $ 1.671
Unit Value at end of year......... 2.201 2.369 2.281 2.455 2.111 2.273 2.034 2.189 1.691
Number of units outstanding at end
of year (thousands)............. 58,355 4,813 63,538 4,490 65,926 4,120 58,106 3,359 51,489

<CAPTION>
1990
------
NQ
- ----------------------------------- ------
<S> <C>
CAPITAL APPRECIATION FUND*
Unit Value at beginning of year... $1.200
Unit Value at end of year......... 1.114
Number of units outstanding at end
of year (thousands)............. 553
HIGH YIELD BOND TRUST
Unit Value at beginning of year... $1.590
Unit Value at end of year......... 1.433
Number of units outstanding at end
of year (thousands)............. 341
MANAGED ASSETS TRUST
Unit Value at beginning of year... $1.799
Unit Value at end of year......... 1.821
Number of units outstanding at end
of year (thousands)............. 2,744
</TABLE>

Q = Qualified
NQ = NonQualified

The financial statements of Fund U and the consolidated financial
statements of The Travelers Insurance Company and Subsidiaries are
contained in the SAI.

* Prior to May 1, 1994, the Capital Appreciation Fund was known as the
Aggressive Stock Trust.

A-1
<PAGE> 52

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS FUND U FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES

<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DREYFUS STOCK INDEX FUND (1/92)*
Unit Value at beginning of year......... $ 3.110 $ 2.456 $ 1.870 $ 1.546 $ 1.144 $ 1.148 $ 1.064 $ 1.000
Unit Value at end of year............... 3.704 3.110 2.456 1.870 1.546 1.144 1.148 1.064
Number of units outstanding at end of
year (thousands)...................... 168,819 147,531 109,317 66,098 43,247 31,600 26,789 12,089
AMERICAN ODYSSEY FUNDS, INC.
AMERICAN ODYSSEY CORE EQUITY FUND
(6/93)*
Unit Value at beginning of period....... $ 2.445 $ 2.143 $ 1.647 $ 1.354 $ .990 $ 1.012 $ 1.000 --
Unit Value at end of period............. 2.408 2.445 2.143 1.647 1.354 .990 1.012 --
Number of units outstanding at end of
period (thousands).................... 176,542 187,872 185,895 170,552 137,330 100,082 37,136 --
AMERICAN ODYSSEY EMERGING OPPORTUNITIES FUND (5/93)*
Unit Value at beginning of period....... $ 1.390 $ 1.541 $ 1.460 $ 1.526 $ 1.168 $ 1.079 $ 1.000 --
Unit Value at end of period............. 1.877 1.390 1.541 1.460 1.526 1.168 1.079 --
Number of units outstanding at end of
period (thousands).................... 181,955 187,717 162,146 122,877 103,815 73,838 27,011 --
AMERICAN ODYSSEY GLOBAL HIGH-YIELD BOND FUND(1) (5/93)*
Unit Value at beginning of period....... $ 1.125 $ 1.183 $ 1.129 $ 1.102 $ 1.006 $ 1.020 $ 1.000 --
Unit Value at end of period............. 1.229 1.125 1.183 1.129 1.102 1.006 1.020 --
Number of units outstanding at end of
period (thousands).................... 70,729 70,747 48,929 44,077 24,416 17,611 8,201 --
AMERICAN ODYSSEY INTERMEDIATE-TERM BOND FUND (6/93)*
Unit Value at beginning of period....... $ 1.317 $ 1.229 $ 1.157 $ 1.128 $ .993 $ 1.035 $ 1.000 --
Unit Value at end of period............. 1.320 1.317 1.229 1.157 1.128 .993 1.035 --
Number of units outstanding at end of
period (thousands).................... 87,217 93,456 86,914 78,211 68,878 50,403 19,564 --
AMERICAN ODYSSEY INTERNATIONAL EQUITY FUND (5/93)*
Unit Value at beginning of period....... $ 1.806 $ 1.592 $ 1.534 $ 1.274 $ 1.084 $ 1.180 $ 1.000 --
Unit Value at end of period............. 2.364 1.806 1.592 1.534 1.274 1.084 1.180 --
Number of units outstanding at end of
period (thousands).................... 147,994 161,690 143,959 121,896 70,364 47,096 16,944 --
AMERICAN ODYSSEY LONG-TERM BOND FUND (6/93)*
Unit Value at beginning of period....... $ 1.456 $ 1.352 $ 1.221 $ 1.221 $ .990 $ 1.085 $ 1.000 --
Unit Value at end of period............. 1.398 1.456 1.352 1.221 1.221 .990 1.085 --
Number of units outstanding at end of
period (thousands).................... 163,822 170,067 159,728 137,075 101,376 70,928 25,467 --
DREYFUS VARIABLE INVESTMENT FUND
SMALL CAP PORTFOLIO (5/98)*
Unit Value at beginning of period....... $ 0.860 $ 1.000 -- -- -- -- -- --
Unit Value at end of period............. 1.046 0.860 -- -- -- -- -- --
Number of units outstanding at end of
period (thousands).................... 8,737 4,815 -- -- -- -- -- --
FIDELITY'S VARIABLE INSURANCE PRODUCTS
FUND
EQUITY-INCOME PORTFOLIO -- INITIAL CLASS
(7/93)*
Unit Value at beginning of period....... $ 2.335 $ 2.118 $ 1.674 $ 1.484 $ 1.112 $ 1.052 $ 1.000 --
Unit Value at end of period............. 2.452 2.335 2.118 1.674 1.484 1.112 1.052 --
Number of units outstanding at end of
period (thousands).................... 216,708 243,964 237,050 205,636 153,463 78,856 13,414 --
GROWTH PORTFOLIO -- INITIAL CLASS
(1/92)*
Unit Value at beginning of year......... $ 3.033 $ 2.201 $ 1.805 $ 1.594 $ 1.192 $ 1.207 $ 1.024 $ 1.000
Unit Value at end of year............... 4.117 3.033 2.201 1.805 1.594 1.192 1.207 1.024
Number of units outstanding at end of
year (thousands)...................... 301,815 295,980 289,002 274,892 229,299 176,304 101,260 30,240
</TABLE>

A-2
<PAGE> 53
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS FUND U FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES (CONTINUED)

<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND (CONTINUED)
HIGH INCOME PORTFOLIO -- INITIAL CLASS
(2/92)*
Unit Value at beginning of year......... $ 1.939 $ 2.052 $ 1.766 $ 1.568 $ 1.316 $ 1.354 $ 1.138 $ 1.000
Unit Value at end of year............... 2.071 1.939 2.052 1.766 1.568 1.316 1.354 1.138
Number of units outstanding at end of
year (thousands)...................... 43,922 49,347 48,895 40,309 32,601 25,813 17,381 4,875
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II (1/92)*
ASSET MANAGER PORTFOLIO
Unit Value at beginning of year......... $ 2.135 $ 1.879 $ 1.577 $ 1.394 $ 1.207 $ 1.301 $ 1.088 $ 1.000
Unit Value at end of year............... 2.343 2.135 1.879 1.577 1.394 1.207 1.301 1.088
Number of units outstanding at end of
year (thousands)...................... 193,549 226,655 240,064 249,050 270,795 282,474 162,413 30,207
TEMPLETON VARIABLE PRODUCTS SERIES FUND
TEMPLETON ASSET ALLOCATION FUND (1/92)* (CLASS 1)
Unit Value at beginning of year......... $ 2.176 $ 2.070 $ 1.815 $ 1.546 $ 1.277 $ 1.333 $ 1.070 $ 1.000
Unit Value at end of year............... 2.640 2.176 2.070 1.815 1.546 1.277 1.333 1.070
Number of units outstanding at end of
year (thousands)...................... 88,551 105,824 124,603 113,809 107,460 103,407 51,893 13,888
TEMPLETON BOND FUND (1/92)*
(CLASS 1)
Unit Value at beginning of year......... $ 1.447 $ 1.367 $ 1.351 $ 1.250 $ 1.101 $ 1.172 $ 1.065 $ 1.000
Unit Value at end of year............... 1.345 1.447 1.367 1.351 1.250 1.101 1.172 1.065
Number of units outstanding at end of
year (thousands)...................... 7,676 9,863 10,502 10,260 10,527 10,186 8,014 3,477
TEMPLETON STOCK FUND (1/92)*
(CLASS 1)
Unit Value at beginning of year......... $ 2.211 $ 2.211 $ 2.001 $ 1.655 $ 1.338 $ 1.385 $ 1.047 $ 1.000
Unit Value at end of year............... 2.819 2.211 2.211 2.001 1.655 1.338 1.385 1.047
Number of units outstanding at end of
year (thousands)...................... 144,148 164,479 180,876 154,614 122,937 101,462 43,847 10,433
TRAVELERS SERIES FUND
ALLIANCE GROWTH PORTFOLIO (2/95)*
Unit Value at beginning of period....... $ 2.664 $ 2.091 $ 1.640 $ 1.284 $ 1.000 -- -- --
Unit Value at end of period............. 3.480 2.664 2.091 1.640 1.284 -- -- --
Number of units outstanding at end of
period (thousands).................... 37,608 31,613 19,535 10,809 2,498 -- -- --
G.T. GLOBAL STRATEGIC INCOME PORTFOLIO**
(3/95)*
Unit Value at beginning of period....... $ 1.446 $ 1.487 $ 1.402 $ 1.195 $ 1.000 -- -- --
Unit Value at end of period............. 1.403 1.446 1.487 1.402 1.195 -- -- --
Number of units outstanding at end of
period (thousands).................... 193 240 222 242 162 -- -- --
MFS TOTAL RETURN PORTFOLIO (2/95)*
Unit Value at beginning of period....... $ 1.798 $ 1.630 $ 1.362 $ 1.205 $ 1.000 -- -- --
Unit Value at end of period............. 1.822 1.798 1.630 1.362 1.205 -- -- --
Number of units outstanding at end of
period (thousands).................... 23,142 22,751 14,655 7,302 2,734 -- -- --
PUTNAM DIVERSIFIED INCOME PORTFOLIO
(3/95)*
Unit Value at beginning of period....... $ 1.275 $ 1.282 $ 1.206 $ 1.128 $ 1.000 -- -- --
Unit Value at end of period............. 1.273 1.275 1.282 1.206 1.128 -- -- --
Number of units outstanding at end of
period (thousands).................... 6,580 7,549 5,171 2,375 774 -- -- --
</TABLE>

A-3
<PAGE> 54
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS FUND U FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES (CONTINUED)

<TABLE>
<CAPTION>
1999 1998 1997 1996 1995 1994 1993 1992
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
G.T. GLOBAL STRATEGIC INCOME PORTFOLIO (CONTINUED)
SMITH BARNEY HIGH INCOME PORTFOLIO
(3/95)*
Unit Value at beginning of period....... $ 1.400 $ 1.412 $ 1.256 $ 1.124 $ 1.000 -- -- --
Unit Value at end of period............. 1.419 1.400 1.412 1.256 1.124 -- -- --
Number of units outstanding at end of
period (thousands).................... 2,379 2,256 1,307 553 138 -- -- --
SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO (2/95)*
Unit Value at beginning of period....... $ 1.408 $ 1.339 $ 1.321 $ 1.137 $ 1.000 -- -- --
Unit Value at end of period............. 2.332 1.408 1.339 1.321 1.137 -- -- --
Number of units outstanding at end of
period (thousands).................... 11,829 8,376 7,634 5,777 593 -- -- --
SMITH BARNEY LARGE CAP VALUE PORTFOLIO
(2/95)*
(formerly Smith Barney Income and Growth Portfolio)
Unit Value at beginning of period....... $ 1.999 $ 1.843 $ 1.474 $ 1.246 $ 1.000 -- -- --
Unit Value at end of period............. 1.975 1.999 1.843 1.474 1.246 -- -- --
Number of units outstanding at end of
period (thousands).................... 13,365 13,038 10,871 6,133 1,747 -- -- --
TRAVELERS SERIES TRUST
DISCIPLINED MID CAP STOCK PORTFOLIO
(5/98)*
Unit Value at beginning of period....... $ 1.040 $ 1.000 -- -- -- -- -- --
Unit Value at end of period............. 1.165 1.040 -- -- -- -- -- --
Number of units outstanding at end of
period (thousands).................... 2,429 1,388 -- -- -- -- -- --
SOCIAL AWARENESS STOCK PORTFOLIO (5/92)*
Unit Value at beginning of period....... $ 2.842 $ 2.176 $ 1.731 $ 1.461 $ 1.109 $ 1.153 $ 1.086 $ 1.000
Unit Value at end of period............. 3.251 2.842 2.176 1.731 1.461 1.109 1.153 1.086
Number of units outstanding at end of
year (thousands)...................... 17,999 13,305 9,539 6,355 4,841 3,499 2,920 1,332
U.S. GOVERNMENT SECURITIES PORTFOLIO
(1/92)*
Unit Value at beginning of period....... $ 1.602 $ 1.472 $ 1.323 $ 1.321 $ 1.074 $ 1.153 $ 1.066 $ 1.000
Unit Value at end of period............. 1.517 1.602 1.472 1.323 1.321 1.074 1.153 1.066
Number of units outstanding at end of
period (thousands).................... 27,101 36,339 22,809 19,054 21,339 22,709 22,142 8,566
UTILITIES PORTFOLIO (2/94)*
Unit Value at beginning of period....... $ 1.969 $ 1.686 $ 1.363 $ 1.284 $ 1.005 $ 1.000 -- --
Unit Value at end of period............. 1.943 1.969 1.686 1.363 1.284 1.005 -- --
Number of units outstanding at end of
period (thousands).................... 15,035 16,378 12,539 13,258 11,918 5,740 -- --
</TABLE>

* Represents date money was first applied to funding option through Separate
Account.

** Not currently available to new Contract Owners in most states.

The financial statements of Fund U and the consolidated financial statements of
The Travelers Insurance Company and Subsidiaries are contained in the SAI.

"Number of units outstanding at end of period" may include units for contract
owners in the payout phase.

(1) Formerly American Odyssey Short-Term Bond Fund. The name, investment
objectives and investment subadviser were changed pursuant to a shareholder
vote effective May 1, 1998.

A-4
<PAGE> 55

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
PER UNIT DATA FOR AN ACCUMULATION AND ANNUITY UNIT OUTSTANDING THROUGHOUT EACH
YEAR

The following information for the fiscal year ended December 31, 1999 has been
audited by KPMG LLP, independent accountants, whose report thereon appears in
Account GIS's Annual Report dated December 31, 1999. The following information
for the fiscal years ended December 31, 1990 through December 31, 1998 has been
audited by other independent accountants. The information set out below should
be read in conjunction with the financial statements and related notes that also
appear in Account GIS's Annual Report, which is incorporated by reference into
the Statement of Additional Information.

<TABLE>
<CAPTION>
CONTRACTS ISSUED ON OR AFTER MAY 16, 1983 1999 1998 1997 1996 1995 1994 1993 1992
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA
Total investment income............... $ .256 $ .234 $ .228 $ .212 $ .205 $ .189 $ .184 $ .188
Operating expenses.................... .385 .303 .228 .175 .140 .115 .106 .098
-------- -------- -------- -------- -------- -------- -------- --------
Net investment income (loss).......... (.129) (.069) .000 .037 .065 .074 .078 .090
Unit Value at beginning of year....... 19.253 14.955 11.371 9.369 6.917 7.007 6.507 6.447
Net realized and change in unrealized
gains (losses)...................... 4.312 4.367 3.584 1.965 2.387 (.164) .422 (.030)
-------- -------- -------- -------- -------- -------- -------- --------
Unit Value at end of year............. $ 23.436 $ 19.253 $ 14.955 $ 11.371 $ 9.369 $ 6.917 $ 7.007 $ 6.507
======== ======== ======== ======== ======== ======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value... $ 4.18 $ 4.30 $ 3.58 $ 2.00 $ 2.45 $ (.09) $ .50 $ .06
Ratio of operating expenses to average
net assets.......................... 1.85% 1.81% 1.70% 1.70% 1.70% 1.65% 1.57% 1.58%
Ratio of net investment income (loss) to
average net assets.................. (.62)% (.41)% .00% .36% .79% 1.05% 1.15% 1.43%
Number of units outstanding at end of
year (thousands).................... 32,648 32,051 29,545 27,578 26,688 26,692 28,497 29,661
Portfolio turnover rate............... 47% 50% 64% 85% 96% 103% 81% 189%
<CAPTION>
CONTRACTS ISSUED PRIOR TO MAY 16, 1983 1991 1990 1997 1996 1995 1994 1993 1992
- --------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA
Total investment income............... $ .267 $ .243 $ .233 $ .216 $ .208 $ .192 $ .189 $ .192
Operating expenses.................... .347 .272 .201 .154 .123 .100 .092 .085
-------- -------- -------- -------- -------- -------- -------- --------
Net investment income (loss).......... (.080) (.029) .032 .062 .085 .092 .097 .107
Unit Value at beginning of year....... 20.017 15.510 11.763 9.668 7.120 7.194 6.664 6.587
Net realized and change in unrealized
gains (losses)...................... 4.490 4.536 3.715 2.033 2.463 (.166) .433 (.030)
-------- -------- -------- -------- -------- -------- -------- --------
Unit Value at end of year............. $ 24.427 $ 20.017 $ 15.510 $ 11.763 $ 9.668 $ 7.120 $ 7.194 $ 6.664
======== ======== ======== ======== ======== ======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value... $ 4.41 $ 4.51 $ 3.75 $ 2.10 $ 2.55 $ (.07) $ .53 $ .08
Ratio of operating expenses to average
net assets.......................... 1.60% 1.56% 1.45% 1.45% 1.45% 1.41% 1.33% 1.33%
Ratio of net investment income (loss) to
average net assets.................. (.37)% (.16)% .24% .60% 1.02% 1.30% 1.40% 1.67%
Number of units outstanding at end of
year (thousands).................... 12,646 13,894 15,194 16,554 17,896 19,557 21,841 22,516
Portfolio turnover rate............... 47% 50% 64% 85% 96% 103% 81% 189%

<CAPTION>
<S> <C> <C>
SELECTED PER UNIT DATA
Total investment income............... $ .198 $ .192
Operating expenses.................... .091 .079
-------- --------
Net investment income (loss).......... .107 .113
Unit Value at beginning of year....... 5.048 5.295
Net realized and change in unrealized
gains (losses)...................... 1.292 (.360)
-------- --------
Unit Value at end of year............. $ 6.447 $ 5.048
======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value... $ 1.40 $ (.25)
Ratio of operating expenses to average
net assets.......................... 1.58% 1.57%
Ratio of net investment income (loss) to
average net assets.................. 1.86% 2.25%
Number of units outstanding at end of
year (thousands).................... 26,235 19,634
Portfolio turnover rate............... 319% 54%
SELECTED PER UNIT DATA
Total investment income............... $ .201 $ .199
Operating expenses.................... .077 .069
-------- --------
Net investment income (loss).......... .124 .130
Unit Value at beginning of year....... 5.145 5.383
Net realized and change in unrealized
gains (losses)...................... 1.318 (.368)
-------- --------
Unit Value at end of year............. $ 6.587 $ 5.145
======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value... $ 1.44 $ (.24)
Ratio of operating expenses to average
net assets.......................... 1.33% 1.33%
Ratio of net investment income (loss) to
average net assets.................. 2.11% 2.50%
Number of units outstanding at end of
year (thousands).................... 24,868 28,053
Portfolio turnover rate............... 319% 54%
</TABLE>

A-5
<PAGE> 56

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
PER UNIT DATA FOR AN ACCUMULATION AND ANNUITY UNIT OUTSTANDING THROUGHOUT EACH
YEAR

The following information for the fiscal year ended December 31, 1999 has been
audited by KPMG LLP, independent accountants, whose report thereon appears in
Account QB's Annual Report dated December 31, 1999. The following information
for the fiscal years ended December 31, 1990 through December 31, 1998 has been
audited by other independent accountants. The information set out below should
be read in conjunction with the financial statements and related notes that also
appear in Account QB's Annual Report, which is incorporated by reference into
the Statement of Additional Information.

<TABLE>
<CAPTION>
CONTRACTS ISSUED PRIOR ON OR AFTER MAY 16, 1983 1999 1998 1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA
Total investment income.................. $ .378 $ .350 $ .342 $ .368 $ .319 $ .310 $ .299
Operating expenses....................... .091 .088 .082 .078 .073 .069 .067
-------- -------- -------- -------- -------- -------- --------
Net investment income.................... .287 .262 .260 .290 .246 .241 .232
Unit Value at beginning of year.......... 5.765 5.393 5.060 4.894 4.274 4.381 4.052
Net realized and change in unrealized gains
(losses)............................... (.242) .110 .073 (.124) .374 (.348) .097
-------- -------- -------- -------- -------- -------- --------
Unit Value at end of year................ $ 5.810 $ 5.765 $ 5.393 $ 5.060 $ 4.894 $ 4.274 $ 4.381
======== ======== ======== ======== ======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value.... $ .04 $ .37 $ .33 $ .17 $ .62 $ (.11) $ .33
Ratio of operating expenses to average net
assets................................. 1.57% 1.57% 1.57% 1.57% 1.57% 1.57% 1.57%
Ratio of net investment income to average net
assets................................. 4.97% 4.71% 5.00% 5.87% 5.29% 5.62% 5.41%
Number of units outstanding at end of year
(thousands)............................ 17,412 21,251 21,521 24,804 27,066 27,033 28,472
Portfolio turnover rate.................. 340% 438% 196% 176% 138% 27% 24%
<CAPTION>
CONTRACTS ISSUED PRIOR TO MAY 16, 1983 1992 1991 1990 1996 1995 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA
Total investment income.................. $ .393 $ .363 $ .353 $ .379 $ .328 $ .318 $ .306
Operating expenses....................... .080 .076 .071 .067 .063 .059 .058
-------- -------- -------- -------- -------- -------- --------
Net investment income.................... .313 .287 .282 .312 .265 .259 .248
Unit Value at beginning of year.......... 5.994 5.593 5.234 5.050 4.400 4.498 4.150
Net realized and change in unrealized gains
(losses)............................... (.252) .114 .077 (.128) .385 (.357) .100
-------- -------- -------- -------- -------- -------- --------
Unit Value at end of year................ $ 6.055 $ 5.994 $ 5.593 $ 5.234 $ 5.050 $ 4.400 $ 4.498
======== ======== ======== ======== ======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value.... $ .06 $ .40 $ .36 $ .18 $ .65 $ (.10) $ .35
Ratio of operating expenses to average net
assets................................. 1.33% 1.33% 1.33% 1.33% 1.33% 1.33% 1.33%
Ratio of net investment income to average net
assets................................. 5.22 4.96% 5.25% 6.12% 5.54% 5.87% 5.66%
Number of units outstanding at end of year
(thousands)............................ 6,224 6,880 7,683 8,549 9,325 10,694 12,489
Portfolio turnover rate.................. 340% 438% 196% 176% 138% 27% 24%

<CAPTION>
<S> <C> <C> <C>
SELECTED PER UNIT DATA
Total investment income.................. $ .311 $ .299 $ .277
Operating expenses....................... .061 .056 .048
-------- -------- --------
Net investment income.................... .250 .243 .229
Unit Value at beginning of year.......... 3.799 3.357 3.129
Net realized and change in unrealized gains
(losses)............................... .003 .199 (.001)
-------- -------- --------
Unit Value at end of year................ $ 4.052 $ 3.799 $ 3.357
======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value.... $ .25 $ .44 $ .23
Ratio of operating expenses to average net
assets................................. 1.58% 1.57% 1.57%
Ratio of net investment income to average net
assets................................. 6.38% 6.84% 7.06%
Number of units outstanding at end of year
(thousands)............................ 20,250 17,211 14,245
Portfolio turnover rate.................. 23% 21% 41%
SELECTED PER UNIT DATA
Total investment income.................. $ .317 $ .304 $ .281
Operating expenses....................... .050 .048 .040
-------- -------- --------
Net investment income.................... .267 .256 .241
Unit Value at beginning of year.......... 3.880 3.421 3.181
Net realized and change in unrealized gains
(losses)............................... .003 .203 (.001)
-------- -------- --------
Unit Value at end of year................ $ 4.150 $ 3.880 $ 3.421
======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value.... $ .27 $ .46 $ .24
Ratio of operating expenses to average net
assets................................. 1.33% 1.33% 1.33%
Ratio of net investment income to average net
assets................................. 6.61% 7.09% 7.31%
Number of units outstanding at end of year
(thousands)............................ 13,416 14,629 16,341
Portfolio turnover rate.................. 23% 21% 41%
</TABLE>

A-6
<PAGE> 57

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES
PER UNIT DATA FOR AN ACCUMULATION AND ANNUITY UNIT OUTSTANDING THROUGHOUT EACH
YEAR

The following information for the fiscal year ended December 31, 1999 has been
audited by KPMG LLP, independent accountants, whose report thereon appears in
Account MM's Annual Report dated December 31, 1999. The following information
for the fiscal years ended December 31, 1990 through December 31, 1998 has been
audited by other independent accountants. The information set out below should
be read in conjunction with the financial statements and related notes that also
appear in Account MM's Annual Report, which is incorporated by reference into
the Statement of Additional Information.

<TABLE>
<CAPTION>
CONTRACTS ISSUED PRIOR ON OR AFTER MAY 16, 1983 1999 1998 1997 1996 1995 1994 1993
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
<CAPTION>

<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA
Total investment income.................. $ .130 $ .133 $ .128 $ .121 $ .127 $ .087 $ .065
Operating expenses....................... .039 .038 .036 .035 .034 .032 .031
-------- -------- -------- -------- -------- -------- --------
Net investment income.................... .091 .095 .092 .086 .093 .055 .034
Unit Value at beginning of year.......... 2.450 2.355 2.263 2.177 2.084 2.029 1.995
Unit Value at end of year................ $ 2.541 $ 2.450 $ 2.355 $ 2.263 $ 2.177 $ 2.084 $ 2.029
======== ======== ======== ======== ======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase in unit value............... $ .09 $ .10 $ .09 $ .09 $ .09 $ .06 $ .03
Ratio of operating expenses to average net
assets................................. 1.57% 1.57% 1.57% 1.57% 1.57% 1.57% 1.57%
Ratio of net investment income to average net
assets................................. 3.62% 3.95% 4.02% 3.84% 4.36% 2.72% 1.68%
Number of units outstanding at end of year
(thousands)............................ 70,545 41,570 36,134 38,044 35,721 39,675 34,227
<CAPTION>
CONTRACTS ISSUED PRIOR TO MAY 16, 1983 1992 1991 1990 1996 1995 1994 1993
- -------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA
Total investment income.................. $ .135 $ .138 $ .134 $ .125 $ .130 $ .091 $ .067
Operating expenses....................... .034 .033 .032 .030 .030 .028 .027
-------- -------- -------- -------- -------- -------- --------
Net investment income.................... .101 .105 .102 .095 .100 .063 .040
Unit Value at beginning of year.......... 2.548 2.443 2.341 2.246 2.146 2.083 2.043
-------- -------- -------- -------- -------- -------- --------
Unit Value at end of year................ $ 2.649 $ 2.548 $ 2.443 $ 2.341 $ 2.246 $ 2.146 $ 2.083
======== ======== ======== ======== ======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase in unit value............... $ .10 $ .11 $ .10 $ .10 $ .10 $ .06 $ .04
Ratio of operating expenses to average net
assets................................. 1.33% 1.33% 1.33% 1.33% 1.33% 1.33% 1.33%
Ratio of net investment income to average net
assets................................. 3.87% 4.20% 4.27% 4.10% 4.61% 2.98% 1.93%
Number of units outstanding at end of year
(thousands)............................ 80 91 105 112 206 206 218

<CAPTION>
<S> <C> <C> <C>
------------------------------
- ------------------------------------------------------------------------------------------
SELECTED PER UNIT DATA
Total investment income.................. $ .077 $ .118 $ .149
Operating expenses....................... .031 .030 .029
-------- -------- --------
Net investment income.................... .046 .088 .120
Unit Value at beginning of year.......... 1.949 1.861 1.741
Unit Value at end of year................ $ 1.995 $ 1.949 $ 1.861
======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase in unit value............... $ .05 $ .09 $ .12
Ratio of operating expenses to average net
assets................................. 1.57% 1.57% 1.57%
Ratio of net investment income to average net
assets................................. 2.33% 4.66% 6.68%
Number of units outstanding at end of year
(thousands)............................ 42,115 55,013 67,343
SELECTED PER UNIT DATA
Total investment income.................. $ .079 $ .120 $ .151
Operating expenses....................... .027 .026 .024
-------- -------- --------
Net investment income.................... .052 .094 .127
Unit Value at beginning of year.......... 1.991 1.897 1.770
-------- -------- --------
Unit Value at end of year................ $ 2.043 $ 1.191 $ 1.897
======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase in unit value............... $ .05 $ .09 $ .13
Ratio of operating expenses to average net
assets................................. 1.33% 1.33% 1.33%
Ratio of net investment income to average net
assets................................. 2.58% 4.90% 6.93%
Number of units outstanding at end of year
(thousands)............................ 227 262 326
</TABLE>

* On May 1, 1990, TAMIC replaced TIMCO as the investment adviser for Account MM.

A-7
<PAGE> 58

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
PER UNIT DATA FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT EACH PERIOD

The following information for the fiscal year ended December 31, 1999 has been
audited by KPMG LLP, independent accountants, whose report thereon appears in
Account TGIS's Annual Report dated December 31, 1999. The following information
for the fiscal years ended December 1, 1990 through December 31, 1998 has been
audited by other independent accountants. The information set out below should
be read in conjunction with the financial statements and related notes that also
appear in Account TGIS's Annual Report, which is incorporated by reference into
the Statement of Additional Information.

<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA
Total investment income........... $ .076 $ .064 $ .075 $ .061 $ .083 $ .064 $ .043
Operating expenses+............... .136 .110 .090 .069 .057 .041 .042
-------- -------- -------- -------- --------- -------- -------
Net investment income (loss)...... (.060) (.046) (.015) (.008) .026 .023 .001
Unit Value at beginning of year... $ 4.468 $ 3.526 $ 2.717 $ 2.263 $ 1.695 $ 1.776 $ 1.689
Net realized and change in
unrealized gains
(losses)........................ .986 .988 .824 .462 .542 (.104) 0.086
-------- -------- -------- -------- --------- -------- -------
Unit Value at end of year......... $ 5.394 $ 4.468 $ 3,526 $ 2.717 $ 2.263 $ 1.695 $ 1.776
======== ======== ======== ======== ========= ======== =======
SIGNIFICANT RATIOS AND ADDITIONAL
DATA
Net increase (decrease) in unit
value........................... $ .93 $ .94 $ .81 $ .45 $ .57 $ (.08) $ .09
Ratio of operating expenses to
average net assets*+............ 2.82% 2.82% 2.82% 2.82% 2.82% 2.82% 2.82%
Ratio of net investment income
(loss) to average net assets*... (1.25)% (1.16)% (.45)% (.34)% 1.37% 1.58% 0.08%
Number of units outstanding at end
of year (thousands)............. 26,010 25,192 60,312 68,111 105,044 29,692 --
Portfolio turnover rate........... 51% 81% 63% 81% 79% 19% 70%

<S> <C> <C> <C>
-------------------------------------
- ------------------------------------------------------------------------------------------------------------
SELECTED PER UNIT DATA
Total investment income........... $ .046 $ .045 $ .099
Operating expenses+............... .045 .045 .034
--------- ------- -------
Net investment income (loss)...... .001 -- .065
Unit Value at beginning of year... $ 1.643 $ 1.391 $ 1.447
Net realized and change in
unrealized gains
(losses)........................ 0.045 0.252 (.121)
--------- ------- -------
Unit Value at end of year......... $ 1.689 $ 1.643 $ 1.391
========= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL
DATA
Net increase (decrease) in unit
value........................... $ .05 $ .25 $ (.06)
Ratio of operating expenses to
average net assets*+............ 2.82% 2.82% 2.41%
Ratio of net investment income
(loss) to average net assets*... 0.78% 1.33% 1.86%
Number of units outstanding at end
of year (thousands)............. 217,428 -- 5,708
Portfolio turnover rate........... 119% 489% 653%
</TABLE>

* Annualized

+ Effective May 1, 1990, market timing fees are included in operating expenses.
Prior to May 1, 1990, market timing fee payments were made by separate check
from a contract owner, and were not recorded in the financial statements of
Account TGIS, or by contractual surrender to the extent allowed under federal
tax law.

A-8
<PAGE> 59

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT FOR VARIABLE ANNUITIES*
PER UNIT DATA FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT EACH YEAR

The following information for the fiscal year ended December 31, 1999 has been
audited by KPMG LLP, independent accountants, whose report thereon appears in
Account TSB's Annual Report dated December 31, 1999. The following information
for the fiscal years ended December 31, 1990 through December 31, 1998 has been
audited by other independent accountants. The information set out below should
be read in conjunction with the financial statements and related notes that also
appear in Account TSB's Annual Report, which is incorporated by reference into
the Statement of Additional Information.

<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA
Total investment income........... $ .076 $ .078 $ .077 $ .057 $ .074 $ .055 $ .041
Operating expenses+............... .041 .040 .039 .030 .035 .036 .037
--------- --------- -------- -------- -------- --------- ---------
Net investment income (loss)...... .035 .038 0.38 .027 .039 .019 .004
Unit Value at beginning of year... 1.437 1.399 1.361 1.333 1.292 1.275 1.271
Net realized and change in
unrealized gains (losses)**..... .001 .000 .000 .001 .002 (.002) --
--------- --------- -------- -------- -------- --------- ---------
Unit Value at end of year......... $ 1.473 $ 1.437 $ 1.399 $ 1.361 $ 1.333 $ 1.292 $ 1.275
========= ========= ======== ======== ======== ========= =========
SIGNIFICANT RATIOS AND ADDITIONAL
DATA
Net increase (decrease) in unit
value........................... $ .04 $ .04 $ .04 $ .03 $ .04 $ .02 $ --
Ratio of operating expenses to
average net assets***+.......... 2.82% 2.82% 2.82% 2.82% 2.82% 2.82% 2.82%
Ratio of net investment income to
average net assets***........... 2.38% 2.71% 2.77% 2.47% 3.17% 1.45% .39%
Number of units outstanding at end
of year (thousands)............. 109,666 137,067 47,262 54,565 -- 216,713 353,374

<S> <C> <C> <C>
-----------------------------------
- --------------------------------------------------------------------------------------------------------------------------
SELECTED PER UNIT DATA
Total investment income........... $ .054 $ .076 $ .099
Operating expenses+............... .041 .036 .030
--------- --------- ---------
Net investment income (loss)...... .013 .040 .069
Unit Value at beginning of year... 1.258 1.218 1.149
Net realized and change in
unrealized gains (losses)**..... -- -- --
--------- --------- ---------
Unit Value at end of year......... $ 1.271 $ 1.258 $ 1.218
========= ========= =========
SIGNIFICANT RATIOS AND ADDITIONAL
DATA
Net increase (decrease) in unit
value........................... $ .01 $ .04 $ .07
Ratio of operating expenses to
average net assets***+.......... 2.82% 2.82% 2.41%
Ratio of net investment income to
average net assets***........... 1.12% 3.07% 5.89%
Number of units outstanding at end
of year (thousands)............. 173,359 439,527 369,769
</TABLE>

+ Effective May 1, 1990, market timing fees are included in operating
expenses. Prior to May 1, 1990, market timing fee payments were made by
separate check from a contract owner, and were not recorded in the financial
statements of Account TSB, or by contractual surrender to the extent allowed
under federal tax law.

* Prior to May 1, 1994, the Account was known as The Travelers Timed Money
Market Account for Variable Annuities.

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

*** Annualized.

A-9
<PAGE> 60

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT FOR VARIABLE ANNUITIES
PER UNIT DATA FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT EACH YEAR

The following information for the fiscal year ended December 31, 1999 has been
audited by KPMG LLP, independent accountants, whose report thereon appears in
Account TAS's Annual Report dated December 31, 1999. The following information
for the fiscal years ended December 31, 1990 through December 31, 1998 has been
audited by other independent accountants. The information set out below should
be read in conjunction with the financial statements and related notes that also
appear in Account TAS's Annual Report, which is incorporated by reference into
the Statement of Additional Information.

<S> <C> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA
Total investment income........... $ .052 $ .056 $ .063 $ .041 $ .042 $ .036 $ .037 $ .041
Operating expenses+............... .110 .098 .085 .069 .057 .049 .048 .043
-------- -------- -------- -------- -------- -------- -------- --------
Net investment income (loss)...... (.058) (.042) (.022) (.028) (.015) (.013) (.011) (.002)
Unit Value at beginning of year... 3.907 3.389 2.623 2.253 1.706 1.838 1.624 1.495
Net realized and change in
unrealized gains (losses)....... .522 .560 .788 .398 .562 (.119) .225 .131
-------- -------- -------- -------- -------- -------- -------- --------
Unit Value at end of year......... $ 4.371 $ 3.907 $ 3.389 $ 2.623 $ 2.253 $ 1.706 $ 1.838 $ 1.624
======== ======== ======== ======== ======== ======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL
DATA
Net increase (decrease) in unit
value........................... $ .46 $ .52 $ .77 $ .37 $ .55 $ (.13) $ .21 $ (.13)
Ratio of operating expenses to
average net assets*+............ 2.85% 2.85% 2.85% 2.84% 2.83% 2.80% 2.82% 2.93%
Ratio of net investment income to
(loss) average net assets*...... (1.49)% (1.21)% (.76)% (1.13)% (.74)% (.72)% (.80)% (.12)%
Number of units outstanding at end
of year (thousands)............. 15,180 16,452 25,865 30,167 45,575 25,109 43,059 20,225
Portfolio turnover rate........... 85% 113% 92% 98% 113% 142% 71% 269%

<CAPTION>
<S> <C> <C>
--------------------
- ----------------------------------------------------------------------------------------------------------------------------------
SELECTED PER UNIT DATA
Total investment income........... $ .044 $ .045
Operating expenses+............... .039 .073
-------- -------
Net investment income (loss)...... .005 (.028)
Unit Value at beginning of year... 1.136 1.189
Net realized and change in
unrealized gains (losses)....... .354 (.025)
-------- -------
Unit Value at end of year......... $ 1.495 $ 1.136
======== =======
SIGNIFICANT RATIOS AND ADDITIONAL
DATA
Net increase (decrease) in unit
value........................... $ .36 $ (.05)
Ratio of operating expenses to
average net assets*+............ 2.99% 2.64%
Ratio of net investment income to
(loss) average net assets*...... .37% (3.73)%
Number of units outstanding at end
of year (thousands)............. 19,565 5,585
Portfolio turnover rate........... 261% 0%
</TABLE>

* Annualized

** On May 1, 1990, TIMCO replaced Keystone Custodian Funds, Inc. as the
investment adviser for Account TAS.

+ Effective May 1, 1990, market timing fees are included in operating expenses.
Prior to May 1, 1990, market timing fee payments were made by separate check
from a contract owner and were not recorded in the financial statements of
Account TAS, or by contractual surrender to the extent allowed under federal
tax law.

A-10
<PAGE> 61

CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------

THE TRAVELERS TIMED BOND ACCOUNT FOR VARIABLE ANNUITIES*
PER UNIT DATA FOR AN ACCUMULATION UNIT OUTSTANDING THROUGHOUT EACH YEAR

The following information on per unit data for 1997 and prior has been audited
by independent accountants. The consolidated financial statements of The
Travelers Insurance Company and Subsidiaries are contained in the SAI.

<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED PER UNIT DATA
Total investment income........... $ .000 $ .000 $ .025 $ .033 $ .071 $ .007 $ .054
Operating expenses+............... .000 .000 .011 .015 .031 .006 .036
------- ------- ------- ------- -------- ------- --------
Net investment income............. .000 .000 .014 .018 .040 .001 .018
Unit Value at beginning of year... 1.273 1.273 1.232 1.383 1.215 1.234 1.132
Net realized and change in
unrealized gains (losses)....... .000 .000 .027 (.169) .128 (.020) .084
------- ------- ------- ------- -------- ------- --------
Unit Value at end of year......... $ 1.273 $ 1.273 $ 1.273 $ 1.232 $ 1.383 $ 1.215 $ 1.234
======= ======= ======= ======= ======== ======= ========
SIGNIFICANT RATIOS AND ADDITIONAL
DATA
Net increase (decrease) in unit
value........................... $ .00 $ .00 $ .04 $ (.15) $ .17 $ (.02) $ .10
Ratio of operating expenses to
average net assets**+........... -- -- 3.00% 3.00% 3.00% 3.00% 3.00%
Ratio of net investment income to
average net assets**............ -- -- 3.64% 3.48% 3.98% 1.02% 1.48%
Number of units outstanding at end
of year (thousands)............. -- -- -- -- 11,466 -- 20,207
Portfolio turnover rate........... -- -- 129% 153% 117% -- 190%

<S> <C> <C> <C>
------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------
SELECTED PER UNIT DATA
Total investment income........... $ .051 $ .052 $ .072
Operating expenses+............... .032 .031 .018
-------- -------- --------
Net investment income............. .019 .021 .054
Unit Value at beginning of year... 1.087 .994 1.036
Net realized and change in
unrealized gains (losses)....... .026 .072 (.096)
-------- -------- --------
Unit Value at end of year......... $ 1.132 $ 1.087 $ .994
======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL
DATA
Net increase (decrease) in unit
value........................... $ .05 $ .09 $ (.04)
Ratio of operating expenses to
average net assets**+........... 2.99% 3.00% 2.58%
Ratio of net investment income to
average net assets**............ 1.71% 3.07% 3.88%
Number of units outstanding at end
of year (thousands)............. 21,868 19,521 14,115
Portfolio turnover rate........... 505% 627% 370%
</TABLE>

* This Fund is not available to new Contract Owners, and had no assets in
1999. Therefore, there is no 1999 Annual Report for Account TB.

** Annualized

*** On May 1, 1990, TAMIC replaced Keystone Custodian Funds, Inc. as the
investment adviser for Account TB.

+ Effective May 1, 1990, market timing fees are included in operating
expenses. Prior to May 1, 1990, market timing fee payments were made by
separate check from a contract owner, and were not recorded in the financial
statements of Account TB, or by contractual surrender to the extent allowed
under federal tax law.

A-11
<PAGE> 62

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<PAGE> 63

APPENDIX B
- --------------------------------------------------------------------------------

THE FIXED ACCOUNT

The Fixed Account is secured by part of the general assets of the Company. The
general assets of the Company include all assets of the Company other than those
held in the Separate Account or any other separate account sponsored by the
Company or its affiliates. In the Contract, we refer to this account as the
"flexible annuity account."

The staff of the SEC does not generally review the disclosure in the prospectus
relating to the Fixed Account. Disclosure regarding the Fixed Account and the
general account may, however, be subject to certain provisions of the federal
securities laws relating to the accuracy and completeness of statements made in
the prospectus.

Under the Fixed Account, the Company assumes the risk of investment gain or
loss, guarantees a specified interest rate, and guarantees a specified periodic
annuity payment. The investment gain or loss of the Separate Account or any of
the funding options does not affect the Fixed Account portion of the contract
owner's contract value, or the dollar amount of fixed annuity payments made
under any payout option.

We guarantee that, at any time, the Fixed Account contract value will not be
less than the amount of the purchase payments allocated to the Fixed Account,
plus interest credited as described above, less any applicable premium taxes or
prior surrenders. If the contract owner effects a surrender, the amount
available from the Fixed Account will be reduced by any applicable withdrawal
charge as described under "Charges and Deductions" in this prospectus.

Purchase payments allocated to the Fixed Account and any transfers made to the
Fixed Account become part of the Company's general account which supports
insurance and annuity obligations. Neither the general account nor any interest
therein is registered under, nor subject to the provisions of the Securities Act
of 1933 or Investment Company Act of 1940. We will invest the assets of the
Fixed Account at our discretion. Investment income from such Fixed Account
assets will be allocated to us and to the Contracts participating in the Fixed
Account.

Investment income from the Fixed Account allocated to us includes compensation
for mortality and expense risks borne by us in connection with Fixed Account
Contracts. The amount of such investment income allocated to the Contracts will
vary from year to year in our sole discretion at such rate or rates as the
Company prospectively declares from time to time.

The initial rate for any allocations into the Fixed Account is guaranteed for
one year from the date of such allocation. Subsequent renewal rates will be
guaranteed for the calendar quarter. We also guarantee that for the life of the
Contract we will credit interest at not less than 3.5% per year. Any interest
credited to amounts allocated to the Fixed Account in excess of 3.5% per year
will be determined in our sole discretion. You assume the risk that interest
credit to the Fixed Account may not exceed the minimum guarantee of 3.5% for any
given year.

TRANSFERS

Under nonqualified contracts, you may make transfers from the Fixed Account to
any other available funding option(s) twice a year during the 30 days following
the semiannual anniversary of the Contract effective date. The transfers are
limited to an amount of up to 10% of the Fixed Account Value on the semiannual
Contract effective date anniversary. (This restriction does not apply to
transfers from the Dollar Cost Averaging Program or to transfers under qualified
contracts.) We reserve the right to waive this restriction.

Automated transfers from the Fixed Account to any of the funding options may
begin at any time. Automated transfers from the Fixed Account may not deplete
your Fixed Account value in a period of less than twelve months from your
enrollment in the Dollar Cost Averaging program.

B-1
<PAGE> 64

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<PAGE> 65

APPENDIX C
- --------------------------------------------------------------------------------

CONTENTS OF STATEMENT OF ADDITIONAL INFORMATION

The Statement of Additional Information contains more specific information and
financial statements relating to The Travelers Insurance Company. A list of the
contents of the Statement of Additional Information is set forth below:

Description of The Travelers Insurance Company and The Separate Accounts
The Insurance Company
The Separate Accounts
Mixed and Shared Funding
Investment Objectives, Policies and Risks
Description of Certain Types of Investments and Investment Techniques
Available to the Separate Accounts
Investment Restrictions
The Travelers Growth and Income Stock Account For Variable Annuities
The Travelers Timed Growth and Income Stock Account for Variable
Annuities
The Travelers Timed Aggressive Stock Account for Variable Annuities
The Travelers Quality Bond Account for Variable Annuities
The Travelers Timed Bond Account for Variable Annuities
The Travelers Money Market Account for Variable Annuities
The Travelers Timed Short-Term Bond Account for Variable Annuities
Investment Management and Advisory Services
Advisory Fees
TIMCO
TAMIC
Valuation of Assets
Net Investment Factor
Federal Tax Considerations
Performance Data

The Board of Managers

Administrative Services
Distribution and Principal Underwriting Agreement
Securities Custodian
Independent Accountants
Financial Statements

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

COPIES OF THE STATEMENT OF ADDITIONAL INFORMATION DATED MAY 1, 2000 (FORM NO.
L-11165S) ARE AVAILABLE WITHOUT CHARGE. TO REQUEST A COPY, PLEASE CLIP THIS
COUPON ON THE DOTTED LINE, ENTER YOUR NAME AND ADDRESS IN THE SPACES PROVIDED
BELOW, AND MAIL TO: THE TRAVELERS INSURANCE COMPANY, ANNUITY SERVICES, ONE TOWER
SQUARE, HARTFORD, CONNECTICUT 06183-5030.

Name:

Address:

C-1
<PAGE> 66

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<PAGE> 67

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<PAGE> 68

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<PAGE> 69

THE TRAVELERS UNIVERSAL ANNUITY

INDIVIDUAL AND GROUP
VARIABLE ANNUITY CONTRACTS
ISSUED BY
THE TRAVELERS INSURANCE COMPANY

L-11165 Printed in U.S.A.
TIC Ed. 5-2000
<PAGE> 70

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

TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

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

GROUP VARIABLE ANNUITY CONTRACTS

issued by

THE TRAVELERS INSURANCE COMPANY

One Tower Square, Hartford, Connecticut 06183
Telephone: 800-842-9368

The group Variable Annuities described in this Prospectus are
available only for use in connection with pension and profit-sharing plans
qualified under Section 401(a) or 403(a) of the Internal Revenue Code of 1986,
as amended (the "Code"). The basic purpose of the Variable Annuity contract is
to provide lifetime Annuity Payments which will vary with the investment
performance of one or more Separate Accounts.

The Separate Accounts available for funding the Variable Annuities
described in this Prospectus have different investment objectives. The
Travelers Growth and Income Stock Account for Variable Annuities ("Account
GIS") seeks long-term accumulation of principal through capital appreciation
and retention of net investment income. Account GIS proposes to achieve this
objective by investing in a portfolio of equity securities, mainly common
stocks. The basic investment objective of The Travelers Quality Bond Account
for Variable Annuities ("Account QB") is the selection of investments from the
point of view of an investor concerned primarily with current income, moderate
capital volatility and total return. Account QB proposes to achieve this
objective by investing in money market obligations and in publicly traded debt
securities.

This Prospectus sets forth concisely the information about Account GIS
and Account QB (the "Separate Accounts") that you should know before investing.
Please read it and retain it for future reference. Additional information about
the Separate Accounts is contained in a Statement of Additional Information
("SAI") dated May 1, 2000 which has been filed with the Securities and Exchange
Commission ("SEC") and is incorporated by reference into this Prospectus. A
copy may be obtained, without charge, by writing to The Travelers Insurance
Company, Annuity Services, One Tower Square, Hartford, Connecticut 06183-5030,
Attention: Manager, or by calling 800-842-9368. The Table of Contents of the
SAI appears in Appendix A of this Prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OF ANY BANK AND ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.

THE DATE OF THIS PROSPECTUS IS MAY 1, 2000.

<PAGE> 71

TABLE OF CONTENTS
<TABLE>
<S> <C>
GLOSSARY OF SPECIAL TERMS ............................................................. iii
SUMMARY ................................................................................ v
FEE TABLE .............................................................................. vii
CONDENSED FINANCIAL INFORMATION ........................................................ C-1
DESCRIPTION OF THE TRAVELERS AND THE SEPARATE ACCOUNTS ................................. 1
The Insurance Company .......................................................... 1
The Separate Accounts .......................................................... 1
General ........................................................................ 1

INVESTMENT ALTERNATIVES ................................................................ 1
THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT GIS) ................................................... 2
Investment Objective ........................................................... 2
Fundamental Investment Policies ................................................ 2

THE TRAVELERS QUALITY BOND ACCOUNT FOR
VARIABLE ANNUITIES (ACCOUNT QB) ........................................................ 3
Investment Objective ........................................................... 3
Fundamental Investment Policies ................................................ 3

MANAGEMENT ............................................................................. 4
VOTING RIGHTS .......................................................................... 4
CHARGES AND DEDUCTIONS ................................................................. 5

Deductions from Purchase Payments .............................................. 5
Premium Tax .................................................................... 5
Annual Contract Charge ......................................................... 5
Investment Advisory and Sub-Advisory Fees ...................................... 5
Mortality and Expense Risks .................................................... 6
Change of Contract ............................................................. 7

THE VARIABLE ANNUITIES ................................................................. 7
General Benefit Description .................................................... 7
Termination by the Company and Termination Amount .............................. 7
Benefit in the Event of Termination of a Participant, the Plan or the Contract 8
Suspension of Payments ......................................................... 8
Required Reports ............................................................... 8
Federal and State Income Tax Withholding ....................................... 8

ACCUMULATION PROVISIONS ................................................................ 9
Application of Purchase Payments ............................................... 9
Number of Accumulation Units ................................................... 9
Accumulation Unit Value ........................................................ 9
Net Investment Rate and Net Investment Factor .................................. 9
Cash Value ..................................................................... 9
Cash Surrender (Redemption) or Withdrawal Value ................................ 10
Surrender Charge ............................................................... 10
Reinvestment Privilege ......................................................... 10
</TABLE>

<PAGE> 72

<TABLE>
<S> <C>
Transfer Between Separate Accounts ............................................. 10
Distribution from One Account to Another Account ............................... 11

PAYOUT PROVISIONS ...................................................................... 11
General ........................................................................ 11
Separate Account Allocation .................................................... 11
Determination of First Payment ................................................. 11
Annuity Unit Value ............................................................. 11
Number of Annuity Units ........................................................ 12
Determination of Second and Subsequent Payments ................................ 12
Annuity Options ................................................................ 12
Income Options ................................................................. 13
Election of Options ............................................................ 14

FEDERAL TAX CONSIDERATIONS ............................................................. 14
General ........................................................................ 14
Qualified Pension and Profit-Sharing Plans ..................................... 14
Federal Income Tax Withholding ................................................. 15
Tax Advice ..................................................................... 16

DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS ............................................. 16
STATE REGULATION ....................................................................... 16
LEGAL PROCEEDINGS AND OPINIONS ......................................................... 17
APPENDIX A - Contents of the Statement of Additional Information ....................... 18
</TABLE>

<PAGE> 73

GLOSSARY OF SPECIAL TERMS

As used in this Prospectus, the following terms have the indicated meanings:

ACCUMULATION UNIT: the basic measure used to determine the value of a contract
before Annuity Payments begin.

ANNUITANT: the person on whose life the Variable Annuity contract is issued.

ANNUITY COMMENCEMENT DATE: the date on which a Participant's Annuity Payments
are to begin under the terms of the plan.

ANNUITY PAYMENTS: a series of periodic payments for life; for life with either
a minimum number of payments of a determinable sum assured; or for the joint
lifetime of the Annuitant and another person and thereafter during the lifetime
of the survivor.

ANNUITY UNIT: the basic measure used to determine the dollar amount of Annuity
Payments.

BOARD OF MANAGERS: the persons directing the investment and administration of a
managed Separate Account.

CASH SURRENDER VALUE: the amount payable to the Owner or other payee upon
termination of the contract during the lifetime of the Annuitant.

CASH VALUE: the current value of Accumulation Units credited to the contract
less any administrative charges.

COMPANY: The Travelers Insurance Company.

COMPANY'S HOME OFFICE: the principal executive offices of The Travelers
Insurance Company located at One Tower Square, Hartford, Connecticut.

CONTRACT DATE: the date on which the contract, benefits and provisions of the
contract become effective.

CONTRACT YEARS: annual periods computed from the Contract Date.

INCOME PAYMENTS: optional forms of periodic payments made by the Company which
are not based on the life of the Annuitant.

INDIVIDUAL ACCOUNT: Accumulation Units credited to a Participant or
beneficiary.

MAJORITY VOTE: a "majority vote of the outstanding voting securities" is
defined in the Investment Company Act of 1940 as the lesser of (i) 67% or more
of the votes present at a meeting, if Contract Owners holding more than 50% of
the total voting power of all Contract Owners in the Separate Account are
present or represented by proxy, or (ii) more than 50% of the total voting
power of all Contract Owners in the Separate Account.

NET PURCHASE PAYMENT (NET PREMIUM PAYMENT): the amount applied to the purchase
of Accumulation Units, which is equal to the Purchase Payment less deductions
for sales expenses, any applicable annual contract charge and any applicable
premium taxes.

OWNER: the entity to which the master group contract is issued, usually the
employer.

OWNER'S ACCOUNT: Accumulation Units credited to the Owner.

PARTICIPANT: an eligible person who participates in the plan.

PARTICIPANT'S INTEREST: the Cash Value to which the Participant is entitled
under the Plan.

iii

<PAGE> 74

PLAN: the plan under which the contract is issued.

PURCHASE PAYMENT (PREMIUM PAYMENT): a gross amount paid to the Company under
the contract during the accumulation period.

SEPARATE ACCOUNT: assets set aside by the Company, the investment experience of
which is kept separate from that of other assets of the Company; for example,
The Travelers Growth and Income Stock Account for Variable Annuities.

VALUATION DATE: generally, a day on which the Separate Account is valued. A
valuation date is any day on which the New York Stock Exchange is open for
trading. The value of the Accumulation Units and Annuity Units will be
determined as of the close of trading on the New York Stock Exchange.

VALUATION PERIOD: the period between the close of business on successive
Valuation Dates.

VARIABLE ANNUITY: an annuity contract which provides for accumulation and for
Annuity Payments which vary in amount in accordance with the investment
experience of a Separate Account.

THERE ARE ELIGIBILITY REQUIREMENTS FOR PURCHASERS DESCRIBED ELSEWHERE IN THIS
PROSPECTUS. THIS PROSPECTUS DOES NOT CONSTITUTE A SOLICITATION OF AN OFFER TO
ACQUIRE ANY INTEREST OR PARTICIPATION IN THE VARIABLE ANNUITY DESCRIBED IN THIS
PROSPECTUS TO ANY PERSON WHO IS INELIGIBLE FOR PURCHASE.

<PAGE> 75

SUMMARY

INTRODUCTION

There are two Separate Accounts currently available for funding the
Variable Annuity contracts described herein. The Travelers Growth and Income
Stock Account for Variable Annuities (Account GIS) and The Travelers Quality
Bond Account for Variable Annuities (Account QB) are registered with the SEC as
diversified, open-end management investment companies under the Investment
Company Act of 1940, as amended (the "1940 Act").

The basic investment objectives of the Separate Accounts are as
follows: Account GIS--long-term accumulation of principal through capital
appreciation and retention of net investment income; Account QB--current
income, moderate capital volatility and total return. As is true with all
investment companies, there can be no assurance that the objectives of the
Separate Accounts will be achieved.

RISK FACTORS

The investment experience on equity investments over a period of time
will tend to reflect levels of stock market prices and dividend payouts. Both
are affected by diverse factors, including not only business conditions and
investors' confidence in the economy, but current conditions in a particular
industry or company. The yield on a common stock is not contractually
determined. Equity securities are subject to financial risks relating to the
earning stability and overall financial soundness of an issue. They are also
subject to market risks relating to the effect of general changes in the
securities market on the price of a security.

The yield on debt instruments over a period of time should reflect
prevailing interest rates, which depend on a number of factors, including
government action in the capital markets, government fiscal and monetary
policy, needs of businesses for capital goods for expansion, and investor
expectations as to future inflation. The yield on a particular debt instrument
is also affected by the risk that the issuer will be unable to apply principal
and interest.

INVESTMENT ADVISORY SERVICES

Travelers Asset Management International Company LLC ("TAMIC")
furnishes investment management and advisory services to Accounts QB and GIS
according to the terms of written agreements. TAMIC receives an amount
equivalent on an annual basis to 0.3233% of the average daily net assets of
Account QB. TAMIC receives an amount equivalent on an annual basis to a maximum
of 0.65% of the aggregate average daily net assets of Account GIS, scaling down
to 0.40%.

In addition, The Travelers Investment Management Company ("TIMCO")
provides sub-advisory services in connection with the day to day operations of
Account GIS. For furnishing investment sub-advisory services to Account GIS,
TIMCO is paid by TAMIC an amount equivalent on an annual basis to a maximum of
0.45% of the aggregate average daily net assets of Account GIS, scaling down to
0.20%. (See "Management," and "Investment Advisory Fees.")

CHARGES AND DEDUCTIONS

A sales charge equal to 2% (2.04% of the amount invested) of the gross
Premium Payment is deducted from the Purchase Payments. The sales charge will
be reduced by 2% of any applicable annual contract charge. (See "Deductions
from Purchase Payments" and "Annual Contract Charge.")

There is a $50 annual contract charge assessed against each group
contract. (See "Annual Contract Charge.")

A deduction of 1.0017% on an annual basis will be made on each
Valuation Date for mortality and expense risks assumed by the Company. (See
"Charges and Deductions.")

A contract may be surrendered (redeemed) for cash, in whole or in
part, prior to the commencement of Annuity Payments. There is a surrender
charge of 2% of any Cash Value surrendered during the first five contract
years. (See "Cash Surrender (Redemption) or Withdrawal Value.")

Premium taxes may apply to annuities in a few states. These taxes
currently range from 0.5% to 5.0%, depending upon jurisdiction. The Company
will deduct any applicable premium tax from the Contract Value, either

<PAGE> 76

upon death, surrender, or annuitization, or at the time Purchase Payments are
made to the Contract, but no earlier than when the Company has a tax liability
under state law. (See "Premium Tax.")

ANNUITY PAYMENTS

At a Participant's Annuity Commencement Date (usually at retirement),
the contract provides lifetime Annuity Payments, as well as other types of
payout plans. (See "Annuity Options" and "Income Options.") If a variable
payout is selected, the payments will continue to vary with the investment
performance of the selected Investment Alternatives.

TRANSFERS AND WITHDRAWALS

In the event that a Participant in the plan is terminated prior to
that Participant's Annuity Commencement Date, the Participant's interest may be
paid in cash or in other forms of payout. (See "Benefit in the Event of
Termination of a Participant, the Plan or the Contract.")

Before Annuity or Income Payments begin, transfers may be made among
available Investment Alternatives without fee, penalty or charge. (See
"Transfer Between Separate Accounts.")

VOTING RIGHTS

Owners have certain voting rights under the contracts. (See "Voting
Rights.")

OTHER PROVISIONS

The Company reserves the right to terminate inactive contracts under
certain circumstances. (See "Termination by the Company and Termination
Amount.")

The contracts will be sold by life insurance sales representatives
representing the Company or certain other registered broker-dealers. (See
"Distribution of Variable Annuity Contracts.")

<PAGE> 77

FEE TABLE

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES (GIS)
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES (QB)

<TABLE>
<CAPTION>
GIS QB
--- ----
<S> <C> <C>
CONTRACT OWNER TRANSACTION EXPENSES

Sales Load Imposed on Purchases (as a percentage of purchase payments) ..... 2.00% 2.00%

Surrender Charge (as a percentage of cash value surrendered) ............... 2.00% 2.00%

ANNUAL CONTRACT FEE (per group Contract) ....................................... $ 50.00 $ 50.00

ANNUAL EXPENSES (as a percentage of average net assets)

Mortality and Expense Risk Fees ............................................ 1.00% 1.00%

Management Fees ............................................................ 0.60% 0.32%

TOTAL ANNUAL EXPENSES ........................................................ 1.60% 1.32%
</TABLE>

EXAMPLE

THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

If you surrender your contract at the end of the applicable period,
you would have paid the following expenses on a $1,000 investment, assuming a
5% annual return on assets, after:

<TABLE>
<CAPTION>
GIS QB
--- --
<S> <C> <C>
1 year $ 46 $ 44
3 years $ 102 $ 94
5 years $ 160 $ 147
10 years $ 207 $ 177
</TABLE>

If you do not surrender your contract at the end of the applicable
period, you would have paid the following expenses on a $1,000 investment,
assuming a 5% annual return on assets, after:

<TABLE>
<CAPTION>
GIS QB
--- --
<S> <C> <C>
1 year $ 27 $ 24
3 years $ 83 $ 74
5 years $ 141 $ 127
10 years $ 207 $ 177
</TABLE>

The purpose of the Fee Table is to assist Contract Owners in understanding the
various costs and expenses that a Contract Owner will bear directly or
indirectly. For more complete descriptions of the various costs and expenses,
including possible waivers or reductions of these expenses, see "Charges and
Deductions," and "Surrender Charge." Expenses shown do not include premium taxes
which may be applicable.

vii
<PAGE> 78

CONDENSED FINANCIAL INFORMATION

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
Per Unit Data for an Accumulation and Annuity Unit
outstanding throughout each year

The following information for the fiscal year ended December 31, 1999 has been
audited by KPMG LLP, independent accountants, whose report thereon appears in
Account GIS's Annual Report dated December 31, 1999. The following information
for the fiscal years ended December 31, 1990 through December 31, 1998 has been
audited by other independent accountants. The information set out below should
be read in conjunction with the financial statements and related notes that
also appear in Account's GIS's Annual Report, which is incorporated by
reference into the Statement of Additional Information.

CONTRACTS ISSUED ON OR AFTER MAY 16, 1983.

<TABLE>
<CAPTION>
SELECTED PER UNIT DATA 1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Total investment income ................................................. $ .256 $ .234 $ .228 $ .212 $ .205
Operating expenses ...................................................... .385 .303 .228 .175 .140
------- ------- ------- ------- -------
Net investment income (loss) ........................................... (.129) (.069) .000 .037 .065
Unit Value at beginning of year ......................................... 19.253 14.955 11.371 9.369 6.917
Net realized and change in unrealized gains (losses) .................... 4.312 4.367 3.584 1.965 2.387
------- ------- ------- ------- -------
Unit Value at end of year ............................................... $23.436 $19.253 $14.955 $11.371 $ 9.369
======= ======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value ................................... $ 4.18 $ 4.30 $ 3.58 $ 2.00 $ 2.45%
Ratio of operating expenses to average net assets ....................... 1.85% 1.81% 1.70% 1.70% 1.70%
Ratio of net investment income to average net assets .................... (.62) (.41) .00% .36% .79%
Number of units outstanding at end of year (thousands)................... 32,648 32,051 29,545 27,578 26,688
Portfolio turnover rate ................................................. 47% 50% 64% 85% 96%

CONTRACTS ISSUED PRIOR TO MAY 16, 1983.

SELECTED PER UNIT DATA 1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Total investment income ................................................. $ .267 $ .243 $ .233 .216 .208
Operating expenses ...................................................... .347 .272 .201 .154 .123
------- ------- ------- ------- -------
Net investment income (loss) ............................................ (.080) (.029) .032 .062 .085
Unit Value at beginning of year ......................................... 20,017 15,510 11.763 9.668 7.120
Net realized and change in unrealized gains (losses) .................... 4,490 4.536 3.715 2.033 2.463
------- ------- ------- ------- -------
Unit Value at end of year ............................................... $24,427 $20,017 $15.510 $11.763 $ 9.668
======= ======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value ................................... $ 4.41 $ 4.51 $ 3.75 $ 2.10 $ 2.55%
Ratio of operating expenses to average net assets ....................... 1.60% 1.56% 1.45% 1.45% 1.45%
Ratio of net investment income (loss) to average net assets ............. (.37) (.16) .24% .60% 1.02%
Number of units outstanding at end of year (thousands)................... 12,646 13,894 15,194 16,554 17,896
Portfolio turnover rate ................................................. 47% 50% 64% 85% 96%
</TABLE>

<TABLE>
<CAPTION>
SELECTED PER UNIT DATA 1994 1993 1992 1991 1990
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Total investment income ................................................. $ .189 $ .184 $ .188 $ .198 $ .192
Operating expenses ...................................................... .115 .106 .098 .091 .079
------- ------- ------- ------- -------
Net investment income (loss) ........................................... .074 .078 .090 .107 .113
Unit Value at beginning of year ......................................... 7.007 6.507 6.447 5.048 5.295
Net realized and change in unrealized gains (losses) .................... (.164) .422 (.030) 1.292 (.360)
------- ------- ------- ------- -------
Unit Value at end of year ............................................... $ 6.917 $ 7.007 $ 6.507 $ 6.447 $ 5.048
======= ======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value ................................... (.09) .50 .06 1.40 (.25)
Ratio of operating expenses to average net assets ....................... 1.65% 1.57% 1.58% 1.58% 1.57%
Ratio of net investment income to average net assets .................... 1.05% 1.15% 1.43% 1.86% 2.25%
Number of units outstanding at end of year (thousands)................... 26,692 28,497 29,661 26,235 19,634
Portfolio turnover rate ................................................. 103% 81% 189% 319% 54%

CONTRACTS ISSUED PRIOR TO MAY 16, 1983.

SELECTED PER UNIT DATA 1994 1993 1992 1991 1990
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Total investment income ................................................. $ .192 $ .189 $ .192 $ .201 $ .199
Operating expenses ...................................................... .100 .092 .085 .077 .069
------- ------- ------- ------- -------
Net investment income (loss) ............................................ .092 .097 .107 .124 .130
Unit Value at beginning of year ......................................... 7.194 6.664 6.587 5.145 5.383
Net realized and change in unrealized gains (losses) .................... (.166) .433 (.030) 1.318 (.368)
------- ------- ------- ------- -------
Unit Value at end of year ............................................... $ 7.120 $ 7.194 $ 6.664 $ 6.587 $ 5.145
======= ======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value ................................... (.07) .53 .08 1.44 (.24)
Ratio of operating expenses to average net assets ....................... 1.41% 1.33% 1.33% 1.33% 1.33%
Ratio of net investment income (loss) to average net assets ............. 1.30% 1.40% 1.67% 2.11% 2.50%
Number of units outstanding at end of year (thousands)................... 19,557 21,841 22,516 24,868 28,053
Portfolio turnover rate ................................................. 103% 81% 189% 319% 54%
</TABLE>

<PAGE> 79

CONDENSED FINANCIAL INFORMATION

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
Per Unit Data for an Accumulation and Annuity Unit
outstanding throughout each year

The following information for the fiscal year ended December 31, 1999 has been
audited by KPMG LLP, independent accountants, whose report thereon appears in
Account GIS's Annual Report as of and for the year ended December 31, 1999.
The following information for the fiscal years ended December 31, 1990 through
December 31, 1998 has been audited by other independent accountants. The
information set out below should be read in conjunction with the financial
statements and related notes that also appear in Account's GIS's Annual Report,
which is incorporated by reference into the Statement of Additional
Information.

CONTRACTS ISSUED ON OR AFTER MAY 16, 1983.

<TABLE>
<CAPTION>
SELECTED PER UNIT DATA 1999 1998 1997 1996 1995
-------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Total investment income .................................................. $ .378 $ .350 $ .342 $ .368 $ .319
Operating expenses ....................................................... .091 .088 .082 .078 .073
------- ------- ------- ------- -------
Net investment income .................................................... .287 .262 .260 .290 .246
Unit Value at beginning of year .......................................... 5.765 5.393 5.060 4.894 4.274
Net realized and change in unrealized gains (losses) ..................... (.242) .110 .073 (.124) .374
------- ------- ------- ------- -------
Unit Value at end of year ................................................. $ 5.810 $ 5,765 $ 5.393 $ 5.060 $ 4.894
======= ======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value .................................... $ .04 $ .37 $ .33 $ .17 .62
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 ..................... 4.97% 4.71% 5.00% 5.87% 5.29%
Number of units outstanding at end of year (thousands).................... 17,412 21,251 21,521 24,804 27,066
Portfolio turnover rate .................................................. 340% 438% 196% 176% 138%

CONTRACTS ISSUED PRIOR TO MAY 16, 1983.

SELECTED PER UNIT DATA 1999 1998 1997 1996 1995
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Total investment income .................................................. $ .393 $ .363 $ .353 $ .379 $ .328
Operating expenses ....................................................... .080 .076 .071 .067 .063
------- ------- ------- ------- -------
Net investment income .................................................... .313 .287 .282 .312 .265
Unit Value at beginning of year .......................................... 5.994 5.593 5.234 5.050 4.400
Net realized and change in unrealized gains (losses) ..................... (.252) .114 .077 (.128) .385
------- ------- ------- ------- -------
Unit Value at end of year ................................................ $ 6.055 $ 5.994 $ 5.593 $ 5.234 $ 5.050
======= ======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value ................................... $ .06 $ .40 $ .36 $ .18 .65
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 ..................... 5.22 4.96 5.25% 6.12% 5.54%
Number of units outstanding at end of year (thousands) ................... 6,224 6,880 7,683 8,549 9,325
Portfolio turnover rate .................................................. 340% 438% 196% 176% 138%
</TABLE>

<TABLE>
<CAPTION>
SELECTED PER UNIT DATA 1994 1993 1992 * 1991 1990
------- ------- ------- -------- --------
<S> <C> <C> <C> <C> <C>
Total investment income .................................................. $ .310 $ .299 $ .311 $ .299 $ .277
Operating expenses ....................................................... .069 .067 .061 .056 .048
------- ------- ------- ------- -------
Net investment income .................................................... .241 .232 .250 .243 .229
Unit Value at beginning of year .......................................... 4.381 4.052 3.799 3.357 3.129
Net realized and change in unrealized gains (losses) ..................... (.348) .097 .003 .199 (.001)
------- ------- ------- ------- -------
Unit Value at end of year ................................................. $ 4.274 $ 4.381 $ 4.052 $ 3.799 $ 3.357
======= ======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value .................................... (.11) .33 .25 .44 .23
Ratio of operating expenses to average net assets ........................ 1.57% 1.57% 1.58% 1.57% 1.57%
Ratio of net investment income to average net assets ..................... 5.62% 5.41% 6.38% 6.84% 7.06%
Number of units outstanding at end of year (thousands).................... 27,033 28,472 20,250 17,211 14,245
Portfolio turnover rate .................................................. 27% 24% 23% 21% 41%

CONTRACTS ISSUED PRIOR TO MAY 16, 1983.

SELECTED PER UNIT DATA 1994 1993 1992 * 1991 1990
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Total investment income .................................................. $ .318 $ .306 $ .317 $ .304 $ .281
Operating expenses ....................................................... .059 .058 .050 .048 .040
------- ------- ------- ------- -------
Net investment income .................................................... .259 .248 .267 .256 .241
Unit Value at beginning of year .......................................... 4.498 4.150 3.880 3.421 3.181
Net realized and change in unrealized gains (losses) ..................... (.357) .100 .003 .203 (.001)
------- ------- ------- ------- -------
Unit Value at end of year ................................................ $ 4.400 $ 4.498 $ 4.150 $ 3.880 $ 3.421
======= ======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value ................................... (.10) .35 .27 .46 .24
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 ..................... 5.87% 5.66% 6.61% 7.09% 7.31%
Number of units outstanding at end of year (thousands) ................... 10,694 12,489 13,416 14,629 16,341
Portfolio turnover rate .................................................. 27% 24% 23% 21% 41%
</TABLE>

* On May 1, 1990, TAMIC replaced TIMCO as the investment adviser for Account QB.

<PAGE> 80

DESCRIPTION OF THE TRAVELERS AND THE SEPARATE ACCOUNTS

THE INSURANCE COMPANY

The Travelers Insurance Company (the "Company" or "The Travelers") is
a stock insurance company chartered in 1864 in Connecticut and continuously
engaged in the insurance business since that time. It is licensed to conduct
life insurance business in all states of the United States, the District of
Columbia, Puerto Rico, Guam, the U.S. and British Virgin Islands, and the
Bahamas. The Company's Home Office is located at One Tower Square, Hartford,
Connecticut 06183.

The Company is indirectly owned by a wholly owned subsidiary of
Citigroup Inc. Citigroup Inc. consists of businesses that produce a broad range
of financial services, including asset management, banking and consumer
finance, credit and charge cards, insurance, investments, investment banking
and trading. Among its businesses are Citibank, Commercial Credit, Primerica
Financial Services, Salomon Smith Barney, Salomon Smith Barney Asset
Management, and Travelers Property Casualty.

THE SEPARATE ACCOUNTS

Each of the Separate Accounts available under the Variable Annuity
contracts described in this Prospectus meets the definition of a separate
account under the federal securities laws, and will comply with the provisions
of the 1940 Act. Additionally, the operations of each of the Separate Accounts
are subject to the provisions of Section 38a-433 of the Connecticut General
Statutes which authorizes the Connecticut Insurance Commissioner to adopt
regulations under it. Section 38a-433 contains no restrictions on investments
of the Separate Accounts, and the Commissioner has adopted no regulations under
the Section that affect the Separate Accounts.

Account GIS was established on September 22, 1967, and Account QB was
established on July 29, 1974. Each of these Separate Accounts, although an
integral part of the Company, is registered with the SEC as a diversified,
open-end management investment company under the 1940 Act. The assets of
Accounts GIS and QB are invested directly in securities (such as stocks, bonds
or money market instruments) which are compatible with the stated investment
policies of each account.

GENERAL

Under Connecticut law, the assets of the Separate Accounts will be
held for the exclusive benefit of the owners of, and the persons entitled to
payment under, the Variable Annuity contracts offered by this Prospectus and
under all other contracts which provide for accumulated values or dollar amount
payments to reflect investment results of the Separate Accounts. The assets in
the Separate Accounts are not chargeable with liabilities arising out of any
other business which the Company may conduct. The obligations arising under the
Variable Annuity contracts are obligations of the Company.

INVESTMENT ALTERNATIVES

The Investment Alternatives available in connection with the Variable
Annuity Contracts described herein each have different investment objectives
and fundamental investment policies, as are set forth below. Neither the
investment objectives nor the fundamental investment policies of the Separate
Account can be changed without a vote of a majority of the outstanding voting
securities of the Separate Account, as defined in the 1940 Act.

<PAGE> 81

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT GIS)

INVESTMENT ADVISER: TIMCO

PORTFOLIO MANAGER: Sandip Bhagat

INVESTMENT OBJECTIVE: Long-term accumulation of principal through capital
appreciation and retention of net investment income.

KEY INVESTMENTS: Common stock of large U.S. companies.

SELECTION PROCESS: Account GIS invests primarily in stocks of large U.S.
companies representing a wide range of industries. Stock selection is based on
a quantitative screening process which favors companies that achieve earnings
growth above consensus expectations, and whose stocks offer attractive relative
value. In order to achieve consistent performance, TIMCO manages Account GIS to
mirror the overall risk, sector weightings and growth/value style
characteristics of the Standard & Poor's 500 Stock Index ("S&P 500"). The S&P
500 is a value-weighted equity index comprised mainly of large-company stocks.

- fixed-income securities such as bonds and notes, including U.S.
Government securities;
- exchange-traded stock index futures;
- covered call options, put options;
- foreign securities.

For a complete list of all investments available to Account GIS, please refer
to the "Investments at a Glance" table at the end of this section and in the
SAI.

PRINCIPAL RISK FACTORS: Account GIS is most subject to equities risk. For a
complete discussion of equities risk and other risks carried by the investment
of Account GIS, please refer to the "Investments, Practices and Risks" section
of this prospectus. Please see the SAI for a detailed description of all
investments, and their associated risks, available to Account GIS.

FUNDAMENTAL INVESTMENT POLICIES

The fundamental investment policies of Account GIS permit it to:

1. invest up to 5% of its assets in the securities of any one issuer
(exclusive of securities issued or guaranteed by the United
States government, its agencies or instrumentalities);

2. borrow from banks in amounts of up to 5% of its assets, but only
for emergency purposes;

3. purchase interest in real estate represented by securities for
which there is an established market;

4. make loans through the acquisition of a portion of a privately
placed issue of bonds, debentures or other evidences of
indebtedness of a type customarily purchased by institutional
investors;

5. acquire up to 10% of the voting securities of any one issuer (it
is the present practice of Account GIS not to exceed 5% of the
voting securities of any one issuer);

<PAGE> 82

6. make purchases on margin in the form of short-term credits which
are necessary for the clearance of transactions; and place up to
5% of its net asset value in total margin deposits for positions
in futures contracts; and

7. invest up to 5% of its assets in restricted securities
(securities which may not be publicly offered without
registration under the Securities Act of 1933).

THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT QB)

INVESTMENT ADVISER: TAMIC

PORTFOLIO MANAGER: F. Denney Voss

INVESTMENT OBJECTIVE: Current income, moderate capital volatility and
total return.

KEY INVESTMENTS: Investment grade debt securities and money market
instruments.

SELECTION PROCESS: The adviser expects that the Fund's investments
generally will maintain an average duration of 5 years or less. Investment in
longer term obligations may be made if the manager decides that the investment
yields justify a longer term commitment. No more than 25% of the value of the
Account's total assets will be invested in any one industry. The portfolio will
be actively managed and, under certain market conditions, investments may be
sold prior to maturity.

<TABLE>
<S> <C>
- treasury bills - bonds, notes, debentures
- repurchase agreements - convertible securities
- commercial paper - when-issued securities
- certificates of deposit - interest rate future contracts
- banker's acceptances
</TABLE>

For a complete list of all investments available to Account QB, please refer to
the "Investments at a Glance" table at the end of this section and in the SAI.

PRINCIPAL RISK FACTORS: Account QB is most subject to fixed-income securities
risk. For a complete discussion of fixed-income securities risk and other risks
carried by the investment of Account QB, please refer to the "Investments,
Practices and Risks" section of this prospectus.

FUNDAMENTAL INVESTMENT POLICIES

The fundamental investment policies of Account QB permit it to:

1. invest up to 15% of the value of its assets in the securities of
any one issuer (exclusive of obligations of the United States
government and its instrumentalities, for which there is no
limit);

2. borrow from banks in amounts of up to 5% of its assets, but only
for emergency purposes;

3. purchase interest in real estate represented by securities for
which there is an established market;

4. make loans through the acquisition of a portion of a privately
placed issue of bonds, debentures or other evidences of
indebtedness of a type customarily purchased by institutional
investors;

<PAGE> 83

5. acquire up to 10% of the voting securities of any one issuer (it
is the present practice of Account QB not to exceed 5% of the
voting securities of any one issuer); and

6. make purchases on margin in the form of short-term credits which
are necessary for the clearance of transactions; and place up to
5% of its net asset value in total margin deposits for positions
in futures contracts.

MANAGEMENT

The investments and administration of Accounts GIS and QB are under
the direction of their Boards of Managers. Subject to the authority of each
Board of Managers, TAMIC and TIMCO furnish investment management and advisory
services to Accounts GIS and QB. Additionally, the Board of Managers for each
managed Separate Account annually selects an independent public accountant,
reviews the terms of the management and investment advisory agreements,
recommends any changes in the fundamental investment policies (and submits any
such changes to Contract Owners at the annual meeting), and takes any other
actions necessary in connection with the operation and management of the
managed Separate Accounts.

TAMIC is a registered investment adviser that has provided investment
advisory services since its incorporation in 1978. It's principal offices are
located at One Tower Square, Hartford, Connecticut 06183. TAMIC is an indirect
wholly owned subsidiary of Citigroup Inc., a bank holding company.

TIMCO is a registered investment adviser that has provided investment
advisory services since its incorporation in 1967. Its principal offices are
located at One Tower Square, Hartford, Connecticut. TIMCO is a subsidiary of
Salomon Smith Barney Holdings Inc. which is a wholly owned subsidiary of
Citigroup Inc.

VOTING RIGHTS

Owners of the Variable Annuity contracts participating in Accounts GIS
and QB will be entitled to vote at their meetings on (i) any change in the
fundamental investment policies of or other policies related to the accounts
requiring the Owners' approval; (ii) amendment of the investment advisory
agreements; (iii) election of the members of the Board of Managers of the
accounts; (iv) ratification of the selection of an independent public
accountant for the accounts; (v) any other matters which, in the future, under
the 1940 Act require the Owners' approval; and (vi) any other business which
may properly come before the meeting.

The number of votes which an Owner or a Participant may cast,
including fractional votes, shall be determined as of the date to be chosen by
the Board of Managers within 75 days of the date of the meeting, and at least
20 days' written notice of the meeting will be given.

The number of votes which an Owner may cast in the accumulation period
is equal to the number of Accumulation Units credited to the account under the
contract. During the annuity period, the Owner may cast the number of votes
equal to (i) the reserve related to the contract divided by (ii) the value of
an Accumulation Unit. During the annuity period, a Participant's voting rights
will decline as the reserve for the contract declines. Accounts GIS and QB are
also used to fund certain other Variable Annuity contracts; votes attributable
to such other annuities are computed in an analogous manner.

The Participant's voting rights are set forth in the plan and the
plans are qualified under Section 401(a) or 403(b) of the Code (Pension and
Profit-Sharing). The Company will provide proxy materials to the Owner or will
mail such materials directly to the Participants if requested by the Owner.

Upon the death of the Participant, all voting rights will vest in the
beneficiary of the Variable Annuity contract.

<PAGE> 84

CHARGES AND DEDUCTIONS

DEDUCTIONS FROM PURCHASE PAYMENTS

Prior to the sales charge deduction from the first Purchase Payments
in a Contract Year, an annual administrative charge is deducted. (See "Annual
Contract Charge,") A sales charge equal to 2% (2.04% of the amount invested) of
the gross Purchase Payment is deducted from the Purchase Payments. The sales
charge will be reduced by 2% (a maximum dollar amount of $1.00) of any
applicable annual contract charge. Maximum and minimum payments which may be
made on behalf of any Participant are set forth under the terms of each plan,
and in accordance with the administrative rules of the Company.

An Owner of a group Variable Annuity issued prior to the date of this
Prospectus, and any Owner of an individual Variable Annuity funded in either
Account GIS or Account QB, may exchange their old Variable Annuity for a
Variable Annuity described in this Prospectus, provided the Owner is otherwise
eligible for the purchase. The exchange will be executed at net asset value
(i.e., with no sales or transfer charges).

An Owner of a Flexible Premium Annuity Contract issued by the Company
may transfer the Cash Surrender Value accumulated and available to the Owner
under that contract to a Variable Annuity contract described in this
Prospectus, provided the Owner is otherwise eligible.

If a surrender charge under the Flexible Premium Annuity Contract is
applicable to the Cash Value transferred, neither the sales charge normally
applicable under the contract described in this Prospectus nor any transfer
charge will be applied. If no surrender charge is applicable under the Flexible
Premium Annuity Contract, there will be no transfer charge, but the sales
charge normally applicable under the contract described in this Prospectus will
be applied.

PREMIUM TAX

Certain state and local governments impose premium taxes. These taxes
currently range from 0.5% to 5.0% depending upon jurisdiction. The Company, in
its sole discretion and in compliance with any applicable state law, will
determine the method used to recover premium tax expenses incurred. The Company
will deduct any applicable premium taxes from the Contract Value either upon
death, surrender, annuitization, or at the time Purchase Payments are made to
the Contract, but no earlier than when the Company has a tax liability under
state law.

ANNUAL CONTRACT CHARGE

There is a $50 annual contract charge assessed against each group
contract. The annual contract charge will be deducted from the first gross
Purchase Payment made in each Contract Year. If no gross Purchase Payment is
made in a Contract Year, there is no annual contract charge for that year. The
annual contract charge is set at a level no higher than the actual cost of
administrative expenses.

INVESTMENT ADVISORY AND SUB-ADVISORY FEES

TAMIC furnishes investment management and advisory services to Account
GIS and Account QB, respectively, according to the terms of written agreements.

TAMIC receives an amount equivalent on an annual basis to 0.3233% of
the average daily net assets of Account QB. For investment advisory services
rendered to Account GIS, TAMIC receives an amount equivalent to the following:

<PAGE> 85

<TABLE>
<CAPTION>
Annual Aggregate Net Asset
------ -------------------
Management Fee Value of the Account
--------------- --------------------
<S> <C> <C>
0.65% of the first $ 500,000,000, plus
0.55% of the next $ 500,000,000, plus
0.50% of the next $ 500,000,000, plus
0.45% of the next $ 500,000,000, plus
0.40% of amounts over $ 2,000,000,000
</TABLE>

The advisory fees will be deducted on each valuation date.

TIMCO furnishes sub-advisory services to Account GIS pursuant to a
written agreement with TAMIC.

For furnishing investment Sub-Advisory Services to Account GIS, TAMIC
pays TIMCO an amount equivalent on an annual basis to the following:

<TABLE>
<CAPTION>
Annual Aggregate Net Asset
---------------- --------------------
Sub-Advisory Fee Value of the Account
---------------- --------------------
<S> <C> <C>
0.45% of the first $ 700,000,000, plus
0.275% of the next $ 300,000,000, plus
0.25% of the next $ 500,000,000, plus
0.225% of the next $ 500,000,000, plus
0.20% of amounts over $ 2,000,000,000
</TABLE>

These fees are calculated daily and paid monthly.

MORTALITY AND EXPENSE RISKS

While Annuity Payments will reflect the investment performance of the
Separate Accounts, they will not be affected by changes in actual mortality
experience nor will they be affected by any excess in the Company expenses over
expense deductions provided for in the contract.

The Company is assuming the risk that deductions provided for in the
Variable Annuity contract for sales and administrative expenses and the minimum
death benefit prior to retirement may be insufficient to cover the actual cost
of such items.

The mortality risk assumed by the Company under the Variable Annuity
contract arises from the Company's obligation to continue to make monthly
Annuity Payments, determined in accordance with the annuity tables and other
provisions contained in the contract, to each Annuitant regardless of how long
he or she lives and regardless of how long all Annuitants as a group live. This
assures an Annuitant that neither his own longevity nor an improvement in life
expectancy generally will have any adverse effect on the monthly Annuity
Payments he or she will receive under the contract, and relieves the Annuitant
from the risk that he or she will outlive the funds which have been accumulated
for retirement.

For assuming these risks, the Company makes a charge of 1.0017% on an
annual basis of the value of the Separate Account, which charge consists of
0.8500% for mortality risks and 0.1517% for expense risks. If this charge is
insufficient to cover the actual cost of these mortality and expense risks, the
loss will fall on the Company. Conversely, if the charge proves more than
sufficient, any excess will be profit to the Company. All deductions and
annuity rates are subject to modification with respect to Contributions made on
behalf of a Participant in any one year in excess of double the first year's
Contribution, and, in the case of deductions for investment advisory services,
subject to approval of a modification of the investment advisory agreement by
Owners casting a majority of the votes entitled to be cast.

<PAGE> 86

CHANGE OF CONTRACT

The Company may, at any time, make any changes in the contract,
including retroactive changes, to the extent that the change is required to
meet the requirements of any federal law or regulation to which the Company is
subject.

Except as provided in the paragraph immediately above, no change may
be made in the contract before the fifth anniversary of the Contract Date, and
in no event will changes be made with respect to payments being made by the
Company under any Annuity Option which has commenced prior to the date of
change. On and after the fifth anniversary of the Contract Date, the Company
reserves the right to change the deductions from Premium Payments, the
Termination Amount (see "Termination by the Company and Termination Amount."),
the calculation of the net investment rate and the Unit Value, and the Annuity
Tables. Any change in the annuity tables will be applicable only to premiums
received under the contract after the change. The ability to make such change
lessens the value of mortality and expense guarantees. Other changes (including
changes to the annual contract charge) may be applicable either to all Owner's
Accounts and Individual Accounts under the contract, to only the Owner's
Accounts and Individual Accounts established after the change, or to only
premiums received under the contract after the date of change as the Company
declares at the time of change. The Company will give notice to the Owner at
least 90 days before the date the change is to take effect.

THE VARIABLE ANNUITIES

The group Variable Annuities described in this Prospectus are both
insurance products and securities. As insurance products, they are subject to
the insurance laws and regulations of each state. The underlying product is an
annuity under which Purchase Payments are paid to the Company and credited to
the Owner's contract to accumulate until retirement.

The following brief description of the key features of the Variable
Annuity is subject to the specific terms of the contract itself. Reference
should also be made to the Special Terms.

GENERAL BENEFIT DESCRIPTION

Under the Automatic Option, the Company will automatically begin
paying Annuity Payments to the Owner or Participant, as provided in the plan,
on the Participant's Annuity Commencement Date, if the Participant is then
living. (See "Automatic Option.") The Owner or the Participant, as provided in
the plan, may choose instead a number of alternative arrangements for benefit
payments. If the Participant dies before a payout begins, the Company will pay
to the Owner or beneficiary, as provided in the plan, the Participant's
Interest. The Participant's Interest will be considered the Cash Value of the
Participant's Individual Account unless the Company is otherwise instructed by
the Owner.

TERMINATION BY THE COMPANY AND TERMINATION AMOUNT

No Purchase Payments after the first are required to keep the contract
in effect. However, if the Cash Value in a Participant's Individual Account is
less than $500 and no payment has been applied to the Participant's Individual
Account for at least three years, the Company reserves the right to terminate
the Participant's Individual Account and move the Cash Value of that
Participant's Individual Account to the Owner's Account. If the plan does not
allow for this movement to the Owner's Account, the Company will pay the Cash
Value, adjusted for any applicable premium tax, to the Owner, or to that
Participant at the direction of the Owner.

The Company reserves the right to terminate the contract on any Valuation Date
if there is no Cash Value in any Participant's Individual Account and if the
Cash Value of the Owner's Account, if any, is less than $500 and no payment has
been made for at least three years. If the contract is terminated, the Company
will pay to the Owner the Cash Value of the Owner's Account, if any, adjusted
for any applicable premium tax.

Termination will not occur until 31 days after the Company has mailed notice of
termination to the Owner or the Participant, as provided in the plan, at the
last known address and to any assignee of record.

<PAGE> 87

BENEFIT IN THE EVENT OF TERMINATION OF A PARTICIPANT, THE PLAN OR THE CONTRACT

In the event that, prior to the Annuity Commencement Date, the
Participant terminates participation in the plan, the plan is terminated, or
the contract is terminated, the Owner or that Participant, as provided in the
plan with respect to that Participant's Interest, may elect:

(a) if that Participant is at least 50 years of age, to have that
Participant's Interest applied to provide an Annuity or Income
Payment;

(b) if the contract is continued, to have that Participant's Interest
applied to continue as a paid-up deferred annuity for that
Participant;

(d) to apply that Participant's Interest under the group contract, on
the basis set forth by the Company at the time of the exchange
with the same Separate Accounts as are available under the group
contract; or

(e) if that Participant becomes a Participant under another group
contract of the same type which is in force with the Company, to
transfer that Participant's Interest to that group contract.

If the contract is continued, any Cash Value to which a terminating
Participant is not entitled under the plan will be moved to the Owner's
Account. If the contract is terminated, the Owner will receive the Cash Value
of the Owner's Account.

AUTOMATIC BENEFIT--In the event of termination, unless otherwise
provided in the plan, a Participant's Interest will (1) if the contract is
continued, be applied to continue as a paid-up deferred annuity in accordance
with option (b), or (2) if the contract is terminated, be paid in cash to the
Owner or that Participant as provided in the plan, in accordance with option
(c).

ANNUITY PAYMENTS--Termination of this contract or the plan will not
affect payments being made under any Annuity Option which has commenced prior
to the date of termination.

SUSPENSION OF PAYMENTS

If a national stock exchange is closed (except for holidays or
weekends), or trading is restricted due to an existing emergency as defined by
the SEC so that disposal of the Separate Account's investments or determination
of its net asset value is not reasonably practicable, or the SEC has ordered
that the right of redemption (surrender) be suspended for the protection of
Contract Owners, the Company may postpone all procedures (including making
Annuity Payments) which require valuation of Separate Accounts until the stock
exchange is reopened and trading is no longer restricted.

REQUIRED REPORTS

As often as required by law, but at least once in each Contract Year
before the due date of the first Annuity Payment, the Company will furnish a
report which will show the number of Accumulation Units credited to the
contract in each Investment Alternative and the corresponding Accumulation Unit
Value as of the date of the report. The Company will keep all records required
under federal or state laws.

FEDERAL AND STATE INCOME TAX WITHHOLDING

The federal tax law requires income tax withholding on distributions
from pension plans and annuity contracts, unless the Owner, Participant or
beneficiary elects not to have withholding apply. Some states also require
withholding from pension and annuity payments unless the Owner, Participant or
beneficiary elects not to have withholding apply. (For further information on
federal withholding, see "Federal Income Tax Withholding.")

ACCUMULATION PROVISIONS

<PAGE> 88
APPLICATION OF PURCHASE PAYMENTS

The initial Purchase Payment is due and payable before the contract
becomes effective. Each Purchase Payment is payable at the Company's Home
Office.

Each Purchase Payment will be applied by the Company to provide
Accumulation Units to the credit of an Owner's Account or an Individual
Account, as directed by or provided for in the plan. If the application for the
contract is in good order, the Company will apply the initial Purchase Payment
within two business days of receipt of the Purchase Payment in the mail at the
Company's Home Office. If the application is not in good order, the Company
will attempt to get it in good order within five business days. If it is not
complete at the end of this period, the Company will inform the applicant of
the reason for the delay and that the Purchase Payment will be returned
immediately unless the applicant specifically consents to the Company keeping
the Purchase Payment until the application is complete. Once the application is
complete, the Purchase Payment will be applied within two business days. All
Purchase Payments will initially be applied to the Owner's Account.
Distributions to Individual Accounts will be allowed in accordance with the
terms of "Distribution from One Account to Another Account."

NUMBER OF ACCUMULATION UNITS

The number of Accumulation Units to be credited to an Owner's Account
or an Individual Account in each Investment Alternative upon payment of a
Purchase Payment will be determined by dividing the Purchase Payment applied to
the Investment Alternative by the current Accumulation Unit Value of that
Investment Alternative.

ACCUMULATION UNIT VALUE

The dollar value of an Accumulation Unit for each Investment
Alternative was established at $1.00 at its inception. The value of an
Accumulation Unit on any Valuation Date is determined by multiplying the value
on the immediately preceding Valuation Date by the net investment factor for
the Valuation Period just ended. The value of an Accumulation Unit on any date
other than a Valuation Date will be equal to its value as of the next
succeeding Valuation Date. The value of an Accumulation Unit may increase or
decrease.

NET INVESTMENT RATE AND NET INVESTMENT FACTOR

Each Separate Account's net investment rate for any Valuation Period
is equal to the gross investment rate for that Separate Account less a
deduction of 0.0000363 for Account QB, and 0.0000398 for Account GIS for each
day in the Valuation Period. The gross investment rate for the Valuation Period
is equal to (i) the investment income and capital gains and losses, whether
realized or unrealized, on the assets of the Separate Account less a deduction
for any applicable taxes, including income taxes arising from income and
realized and unrealized capital gains of the Separate Account, divided by (ii)
the amount of the assets at the beginning of the Valuation Period.

At the present time, no federal taxes are deducted from the Separate
Accounts. (See "Federal Tax Considerations.") The gross investment rate for a
Separate Account may be either positive or negative.

The net investment factor for a Separate Account for any Valuation
Period is the sum of 1.000000 plus the net investment rate.

CASH VALUE

The Cash Value of an Owner's Account or an Individual Account on any
date will be equal to the sum of the accumulated values in the Separate
Accounts credited to that Owner's Account or Individual Account. The
accumulated value in a Separate Account is equal to the number of Accumulation
Units credited to an Owner's Account or an Individual Account in that Separate
Account, multiplied by the Accumulation Unit Value for that Separate Account.

CASH SURRENDER (REDEMPTION) OR WITHDRAWAL VALUE

<PAGE> 89

Before the due date of a Participant's first Annuity Payment, upon
receipt of a written request in proper form (including the appropriate
countersignature of a Travelers agent), the Company will pay all or any portion
of that Participant's Interest, adjusted for any applicable premium tax, to the
Owner or the Participant, as provided in the plan. The Owner's Account may be
surrendered for cash as provided in the plan without the consent of any
Participant. The Company may defer payment of any Cash Surrender Value for a
period of not more than seven days after the request in proper form is received
in the mail at the Company's Home Office, but it is its intent to pay as soon
as possible.

The Cash Value may be more or less than the Purchase Payments paid
depending on the value of the contract at the time of surrender. (For the
federal income tax consequences of surrenders, see "Federal Tax
Considerations.")

The Cash Surrender Value of an Account is equal to the Cash Value less
any applicable surrender charge or premium taxes incurred. (See "Surrender
Charge.")

SURRENDER CHARGE

If the Owner terminates an account, in whole or in part, while the
contract remains in force, and the Cash Value of the terminated account is
either to be paid in cash to the Owner or a Participant or to be transferred to
any other funding vehicle, a surrender charge of 2% of any Cash Value
surrendered during the first five contract years will be deducted from the
terminating account. There is no surrender charge after the fifth contract
year. A surrender charge will not be assessed if the Cash Value is payable
under the terms of the Plan as a retirement benefit effected no earlier than
five years prior to the Participant's normal retirement date, or as a death or
disability benefit. The surrender charge will reimburse the Company only for
its actual administrative costs in establishing group contracts.

The use of a percentage surrender charge weighs disproportionately
upon Participants with large dollar amounts in their accounts, and who
surrender Cash Value during the first five contract years.

REINVESTMENT PRIVILEGE

If an Owner or a Participant has surrendered his or her account, in
whole or in part, in anticipation of investing in another tax-qualified
investment medium, and has not previously exercised a reinvestment privilege as
to any Separate Accounts described in this Prospectus, he or she may, if the
proceeds have not lost their tax-qualified status under the Code, reinvest the
proceeds in the Separate Accounts. Amounts will be reinvested at the
Accumulation Unit Value (without a sales charge) next calculated after the
payment is received in the mail by the Company. The reinvestment must be made
within 30 days after the date of the redemption. Before an Owner or a
Participant surrenders his or her account, in whole or in part, he or she
should consult his or her tax adviser to be sure that the proceeds will retain
their tax-qualified status.

TRANSFER BETWEEN SEPARATE ACCOUNTS

At any time up to 30 days before the due date of a Participant's first
Annuity Payment, upon written request to the Company by the Owner or the
Participant, as provided in the plan, all or any part of the Cash Value in an
Individual Account may be transferred from one Separate Account to any other
Separate Account described in this Prospectus. The Company reserves the right
to limit the number of transfers between Separate Accounts, but will not limit
transfers in an Owner's Account or an Individual Account to less than one in
any six-month period. The number of Accumulation Units credited to the Separate
Account from which the transfer is made will be reduced. The reduction will be
determined by dividing the amount transferred by the Accumulation Unit Value
for that Separate Account as of the next valuation after the Company receives
the request in the mail at its Home Office. The number of Accumulation Units
credited to the Separate Account from which the transfer is made will be
increased. The increase will be determined by dividing the amount transferred,
less the Separate Account transfer charge, if any, by the Accumulation Unit
Value for that Separate Account as of the next valuation after the Company
receives the written request from the Owner or the Participant, as provided in
the plan, at its Home Office. There is currently no Separate Account transfer
charge. Once a Participant's Annuity Payments begin, no further transfers in
the Participant's Individual Account may be made between the Separate Accounts.

<PAGE> 90

DISTRIBUTION FROM ONE ACCOUNT TO ANOTHER ACCOUNT

The Owner may, as provided in the plan, distribute Cash Value from the
Owner's Account to one or more Individual Accounts. There is currently no
account distribution charge.

No distribution will be allowed between Individual Accounts.

The Owner may, as required and provided in the plan, move Cash Value
from any or all Individual Accounts to the Owner's Account without a charge.

PAYOUT PROVISIONS

GENERAL

Annuity Payments for a particular Participant will ordinarily begin on
that Participant's Annuity Commencement Date as stated in the Participant's
Certificate. However, a later Annuity Commencement Date may be elected. This
Annuity Commencement Date must be before the Participant's 70th birthday,
unless the Company consents to a later date. Federal income tax law requires
that the Annuitant commence certain minimum distribution payments from pension
and profit-sharing plans after the Participant reaches the age of 70 1/2, and
that certain patterns of payment be commenced or continued after the death of
the Annuitant. A number of payout options are available (see "Annuity Options"
and "Income Options.").

SEPARATE ACCOUNT ALLOCATION

When Annuity Payments commence, the accumulated value in each Separate
Account will be applied to provide an Annuitant with the amount of Annuity
Payments varying with the investment experience of that same Separate Account.
As described in "Transfer Between Separate Accounts," Cash Value may be
transferred from one Separate Account to another in order to reallocate the
basis on which Annuity Payments will be determined.

DETERMINATION OF FIRST PAYMENT

The contract contains tables used to determine the first monthly
Annuity Payment. The amount applied to effect an annuity will be the Cash Value
of the contract as of 14 days before the date Annuity Payments commence less
any applicable premium taxes not previously deducted.

The amount of the first monthly payment depends on the Annuity Option
elected (see "Automatic Option") and the adjusted age of the Participant. A
formula for determining the adjusted age is contained in the contract. The
tables are determined from the Progressive Annuity Table assuming births in the
year 1900 and an assumed annual net investment rate of 3.5%. The total first
monthly Annuity Payment is determined by multiplying the benefit per $1,000 of
value shown in the tables of the contract by the number of thousands of dollars
of value of the contract applied to that Annuity Option. The Company reserves
the right to require proof of age before Annuity Payments begin.

ANNUITY UNIT VALUE

The dollar value of an Annuity Unit for each Investment Alternative
was established at $1.00 at inception. The value of an Annuity Unit as of any
Valuation Date is determined 14 days in advance in order to allow adequate time
for the required calculations and mailing of annuity checks in advance of their
due dates. (If the date 14 days in advance is not a Valuation Date, the
calculation is made on the next following Valuation Date, which would generally
be 13 or 12 days in advance.)

Specifically, the Annuity Unit Value for an Investment Alternative as
of a Valuation Date is equal to (a) the value of the Annuity Unit on the
immediately preceding Valuation Date multiplied by (b) the net investment
factor for the Valuation Period ending on or next following 14 days prior to
the current Valuation Date, divided by (c) the assumed net investment factor
for the Valuation Period. (For example, the assumed net investment factor based
on

<PAGE> 91

an annual assumed net investment rate of 3.5% for a Valuation Period of one day
is 1.0000942 and, for a period of two days, is 1.0000942 x 1.0000942.)

The value of an Annuity Unit as of any date other than a Valuation
Date is equal to its value on the next succeeding Valuation Date.

NUMBER OF ANNUITY UNITS

The number of Annuity Units credited to the contract is determined by
dividing the first monthly Annuity Payment attributable to each Investment
Alternative by the Investment Alternative's Annuity Unit Value as of the due
date of the first Annuity Payment. The number of Annuity Units remains fixed
during the annuity period.

DETERMINATION OF SECOND AND SUBSEQUENT PAYMENTS

The dollar amount of the second and subsequent Annuity Payments is not
predetermined and may change from month to month based on the investment
experience of the applicable Investment Alternative. The actual amounts of
these payments are determined by multiplying the number of Annuity Units
credited to the contract in each Investment Alternative by the corresponding
Annuity Unit Value as of the date on which payment is due. The interest rate
assumed in the annuity tables would produce a level Annuity Unit Value and,
therefore, level Annuity Payments if the net investment rate remained constant
at the assumed rate. In fact, payments will vary up or down as the net
investment rate varies up or down from the assumed rate, and there can be no
assurance that a net investment rate will be as high as the assumed rate.

ANNUITY OPTIONS

Subject to conditions described in "Election of Options" and the plan,
all or any part of a Participant's Interest otherwise payable in one sum to the
Owner or that Participant on that Participant's Annuity Commencement Date or
prior Cash Surrender of an Individual Account, or amounts payable in one sum to
the beneficiary upon the death of that Participant, may be paid under one or
more of the Annuity Options described below.

AUTOMATIC OPTION--Unless otherwise specified in the plan and if no
election has been made, and if the Participant is living and has a spouse, the
Company will, on that Participant's Annuity Commencement Date, pay to the
Participant the first of a series of Annuity Payments based on the life of the
Participant as the primary payee and the Participant's spouse in accordance
with Option 5. If the Participant is living and no election has been made and
the Participant has no spouse, the Company will, on the Annuity Commencement
Date, pay to the Participant the first of a series of Annuity Payments based on
the life of the Participant, in accordance with Option 2 with 120 monthly
payments assured.

OPTION 1--LIFE ANNUITY--NO REFUND: The Company will make monthly
Annuity Payments during the lifetime of the person on whose life the payments
are based, terminating with the last monthly payment preceding death. This
option offers the maximum monthly payment preceding death since there is no
assurance of a minimum number of payments or provision for a death benefit for
beneficiaries. It would be possible under this option to receive only one
Annuity Payment if the Annuitant died before the due date of the second Annuity
Payment, only two if the Annuitant died before the third Annuity Payment, etc.

OPTION 2--LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS ASSURED:
The Company will make monthly Annuity Payments during the lifetime of the
person on whose life payments are based, with the agreement that if, at the
death of that person, payments have been made for less than 120, 180 or 240
months, as elected, payments will be continued during the remainder of the
period to the beneficiary designated. The beneficiary may instead receive a
single sum settlement equal to the discounted value of the future payments with
the interest rate equivalent to the assumption originally used when the annuity
began.

<PAGE> 92

under the option divided by the Annuity Unit Value on the due date of the first
Annuity Payment, and (b) is the product of the number of the Annuity Units
represented by each payment and the number of payments made.

OPTION 4--JOINT AND LAST SURVIVOR LIFE ANNUITY--NO REFUND: The Company
will make monthly Annuity Payments during the joint lifetime of the two persons
on whose lives payments are based, and during the lifetime of the survivor. No
further payments will be made following the death of the survivor. It would be
possible under this option to receive only one Annuity Payment if both
Annuitants died before the due date of the second Annuity Payment, only two if
they died before the third Annuity Payment, etc.

OPTION 5 -- JOINT AND LAST SURVIVOR LIFE ANNUITY--ANNUITY REDUCES ON
DEATH OF PRIMARY PAYEE: The Company will make monthly Annuity Payments during
the lifetime of the two persons on whose lives payments are based. One of the
two persons will be designated as the primary payee. The other will be
designated as the secondary payee. On the death of the secondary payee, if
survived by the primary payee, the Company will continue to make monthly
Annuity Payments to the primary payee in the same amount that would have been
payable during the joint lifetime of the two persons. On the death of the
primary payee, if survived by the secondary payee, the Company will continue to
make Annuity Payments to the secondary payee, in an amount equal to 50% of the
payments which would have been made during the lifetime of the primary payee.
No further payments will be made following the death of the survivor.

OPTION 6 -- OTHER ANNUITY OPTIONS: The Company will make any other
arrangements for Annuity Payments as may be mutually agreed upon.

INCOME OPTIONS

Instead of the Annuity Options described above, and subject to the
conditions described under "Election of Options," and the plan, all or any part
of a Participant's Interest otherwise payable in one sum to the Owner or that
Participant on the Participant's Annuity Commencement Date or prior Cash
Surrender of an Individual Account, or amounts payable in one sum to the
beneficiary upon the death of the Participant, may be paid under one or more of
the Income Options described below.

OPTION 1--PAYMENTS OF A FIXED AMOUNT: The Company will make equal
monthly payments of the amount elected until the Cash Value applied under this
option has been exhausted. The final payment will include any amount
insufficient to make another full payment.

OPTION 2--PAYMENTS FOR A FIXED PERIOD: The Company will make monthly
payments for the number of years selected. The amount of each payment will be
equal to the remaining Cash Value applied under this option divided by the
number of remaining payments.

OPTION 3--INVESTMENT INCOME: The Company will make monthly payments
during the lifetime of the primary payee, or for the period agreed on. The
amount payable will be equal to the excess, if any, of the Cash Value under
this option over the amount applied under this option. No payment will be made
if the Cash Value is less than the amount applied, and it is possible that no
payments would be made for a period of time. Payments under this option are not
considered to be Annuity Payments and are taxable in full as ordinary income.
This Option will generally be inappropriate under federal tax law for periods
that exceed the Participant's attainment of age 70 1/2.

While Income Options do not directly involve mortality risks for the
Company, a Contract Owner may elect to apply the remaining Cash Value to
provide an Annuity at the guaranteed rates even though Income Payments have
been received under an Income Option. Before an Owner or the Participant, as
provided in the plan, makes any

<PAGE> 93

Income Option election, he or she should consult a tax adviser as to any
adverse tax consequences the election might have.

ELECTION OF OPTIONS

Election of an option must be made in writing in a form satisfactory
to the Company. Any election made during the lifetime of the Participant must
be made by the Owner or the Participant, as provided in the plan. The terms of
the options elected by some Participants or beneficiaries may be restricted to
meet the requirements of Section 401(a)(9) of the Internal Revenue Code. If, at
the death of a Participant, there is no election in effect for that
Participant, election of an option must be made by the beneficiary entitled to
any death benefit payable in one sum under the contract. The minimum amount
that can be placed under an Annuity or Income Option will be $2,000 unless the
Company consents to a lesser amount. If any monthly periodic payment due any
payee is less than $20, the Company reserves the right to make payments at less
frequent intervals.

FEDERAL TAX CONSIDERATIONS

GENERAL

The Company is taxed as a life insurance company under Subchapter L of
the Code. The Separate Accounts that form the investment alternatives described
herein are treated as part of the total operations of the Company and are not
taxed separately. Investment income and gains of a Separate Account that are
credited to a purchaser's contract of insurance incur no current federal income
tax. Generally, amounts credited to a contract are not taxable until received
by the Owner, participant or beneficiary, either in the form of Annuity
Payments or other distributions. Tax consequences and limits are described
further below for each annuity program.

QUALIFIED PENSION AND PROFIT-SHARING PLANS

Under a qualified pension or profit-sharing trust described in Section
401(a) of the Code and exempt from tax under Section 501(a) of the Code,
Purchase Payments made by an employer are not currently taxable to the
Participant and increases in the value of a contract are not subject to
taxation until received by a Participant or beneficiary.

Distributions in the form of Annuity or Income Payments are taxable to
the Participant or beneficiary as ordinary income in the year of receipt. Any
distribution that is considered the Participant's "investment in the contract"
is treated as a return of capital and is not taxable. Payments under Income
Option 3 are taxable in full. Certain lump-sum distributions described in
Section 402 of the Code may be eligible for special ten-year forward averaging
treatment for individuals born before January 1, 1936. All individuals may be
eligible for favorable five-year forward averaging of lump-sum distributions.
Certain eligible rollover distributions including most partial and full
surrenders or term-for-years distributions of less than 10 years are eligible
for direct rollover to an eligible retirement plan or to an IRA without federal
income tax withholding.

An additional tax of 10% will apply to any taxable distribution
received by the Participant before the age of 59 1/2, except by reason of
death, disability or as part of a series of payments for life or life
expectancy, or at early retirement at or after the age of 55. There are other
statutory exceptions.

<PAGE> 94

FEDERAL INCOME TAX WITHHOLDING

The portion of a distribution which is taxable income to the recipient
will be subject to federal income tax withholding, generally pursuant to Section
3405 of the Code. The application of this provision is summarized below.

1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(b) PLANS OR
ARRANGEMENTS OR FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS

There is a mandatory 20% tax withholding for plan distributions
that are eligible for rollover to an IRA or to another retirement
plan but that are not directly rolled over. A distribution made
directly to a Participant or beneficiary may avoid this result if:

(a) a periodic settlement distribution is elected based upon a
life or life expectancy calculation, or

(b) a complete term-for-years settlement distribution is elected
for a period of ten years or more, payable at least annually,
or

(c) a minimum required distribution as defined under the tax law
is taken after the attainment of the age of 70 1/2 or as
otherwise required by law.

A distribution including a rollover that is not a direct rollover
will require the 20% withholding, and a 10% additional tax
penalty may apply to any amount not added back in the rollover.
The 20% withholding may be recovered when the Participant or
beneficiary files a personal income tax return for the year if a
rollover was completed within 60 days of receipt of the funds,
except to the extent that the Participant or spousal beneficiary
is otherwise underwithheld or short on estimated taxes for that
year.

2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS)

To the extent not described as requiring 20% withholding in 1
above, the portion of a non-periodic distribution which
constitutes taxable income will be subject to federal income tax
withholding, to the extent such aggregate distributions exceed
$200 for the year, unless the recipient elects not to have taxes
withheld. If an election out is not provided, 10% of the taxable
distribution will be withheld as federal income tax. Election
forms will be provided at the time distributions are requested.
This form of withholding applies to all annuity programs.

3. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD
GREATER THAN ONE YEAR)

The portion of a periodic distribution which constitutes taxable
income will be subject to federal income tax withholding under
the wage withholding tables as if the recipient were married
claiming three exemptions. A recipient may elect not to have
income taxes withheld or have income taxes withheld at a
different rate by providing a completed election form. Election
forms will be provided at the time distributions are requested.
This form of withholding applies to all annuity programs. As of
January 1, 1999, a recipient receiving periodic payments (e.g.,
monthly or annual payments under an Annuity Option) which total
$14,850 or less per year, will generally be exempt from the
withholding requirements.

Recipients who elect not to have withholding made are liable for
payment of federal income tax on the taxable portion of the distribution. All
recipients may also be subject to penalties under the estimated tax payment
rules if withholding and estimated tax payments are not sufficient.

Recipients who do not provide a social security number or other
taxpayer identification number will not be permitted to elect out of
withholding. Additionally, United States citizens residing outside of the
country, or U.S. legal residents temporarily residing outside the country, are
not permitted to elect out of withholding.

<PAGE> 95

TAX ADVICE

Because of the complexity of the law and the fact that the tax results
will vary according to the factual status of the individual involved, tax
advice may be needed by a person contemplating purchase of an annuity contract
and by an Owner, Participant or beneficiary who may make elections under a
contract. It should be understood that the foregoing description of the federal
income tax consequences under these contracts is not exhaustive and that
special rules are provided with respect to situations not discussed here. It
should be understood that if a tax-benefited plan loses its exempt status,
employees could lose some of the tax benefits described. For further
information, a qualified tax adviser should be consulted.

DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS

The Company intends to sell the Contracts in all jurisdictions where
it is licensed to do business and where the Contract is approved. Any sales
representative or employee who sells the Contracts will be qualified to sell
variable annuities under applicable federal and state laws. Each broker-dealer
is registered with the SEC under the Securities Exchange Act of 1934, and all
are members of the NASD. The principal underwriter and distributor of the
Contracts is CFBDS, Inc., 21 Milk St., Boston, MA. CFBDS, Inc. is not
affiliated with the Company or the Separate Account. However, it is currently
anticipated that Travelers Distribution LLC, an affiliated broker-dealer may
become the principal underwriter for the Contract during the year 2000.

Up-front compensation paid to sales representatives will not exceed
7.00% of the purchase payments made under the Contracts. If asset-based
compensation is paid, it will not exceed 2% of the average account value
annually. From time to time, the Company may pay or permit other promotional
incentives, in cash, credit or other compensation.

STATE REGULATION

The Company is subject to the laws of the state of Connecticut
governing insurance companies and to regulation by the Insurance Commissioner
of the state of Connecticut. An annual statement in a prescribed form must be
filed with that Commissioner on or before March 1 in each year covering the
operations of the Company for the preceding year and its financial condition on
December 31 of such year. Its books and assets are subject to review or
examination by the Commissioner or his agents at all times, and a full
examination of its operations is conducted by the National Association of
Insurance Commissioners ("NAIC") at least once in every four years.

In addition, the Company is subject to the insurance laws and
regulations of the other states in which it is licensed to operate. Generally,
the insurance departments of the states apply the laws of the jurisdiction of
domicile in determining the field of permissible investments.

<PAGE> 96

LEGAL PROCEEDINGS AND OPINIONS

Legal matters in connection with the federal laws and regulations affecting the
issue and sale of the contract described in this prospectus, as well as the
organization of the Companies, their authority to issue variable annuity
contracts under Connecticut law and the validity of the forms of the variable
annuity contracts under Connecticut law, have been passed on by the General
Counsel of the Companies.

There are no pending legal proceedings affecting the Separate Account. There is
one material pending legal proceeding, other than ordinary routine litigation
incidental to business, to which the Company is a party. In March 1997, a
purported class action entitled Patterman v. The Travelers, Inc. et al, was
commenced in the Superior Court of Richmond County, Georgia, alleging, among
other things, violation of the Georgia RICO statute and other state laws by an
affiliate of the Company, Primerica Financial Services, Inc. and certain of its
affiliates. Plaintiffs seek unspecified compensatory and punitive damages and
other relief. In October 1997, defendants answered the complaint, denied
liability and asserted numerous affirmative defenses. In February 1998, the
Superior Court of Richmond County transferred the lawsuit to the Superior Court
of Gwinnett County, Georgia. The plaintiffs appealed the transfer order, and in
December 1998 the Court of Appeals of the State of Georgia reversed the lower
court's decision. Later in December 1998, defendants petitioned the Georgia
Supreme Court to hear an appeal from the decision of the Court of Appeals,
which was granted in May 1999. In September 1999, the Georgia Supreme Court
heard oral argument on defendant's petition for an order reversing the Georgia
Court of Appeals and transferring the lawsuit from the Superior Court of
Richmond County to the Superior Court of Gwinnett County. The George Supreme
Court reversed its decision, and has not yet issued its opinion. Pending
appeal, proceedings in the trial court have been stayed. Defendants intend to
vigorously contest the litigation.

<PAGE> 97

APPENDIX A

CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

The SAI contains more specific information relating to the Separate Accounts
and financial statements of The Travelers Insurance Company. A list of the
contents of the SAI is set forth below:

Description of The Travelers and the Separate Accounts
The Insurance Company
The Separate Accounts
Investment Objectives and Policies
The Travelers Growth and Income Stock Accounts for Variable
Annuities
The Travelers Quality Bond Account for Variable Annuities
Description of Certain Types of Investments and Investment Techniques
Available to the Separate Accounts
Writing Covered Call Options
Buying Put and Call Options
Futures Contracts
Money Market Instruments
Investment Management and Advisory Services
Advisory and Subadvisory Fees
TAMIC
TIMCO
Valuation of Assets
The Board of Managers
Administrative Services
Securities Custodian
Independent Accountants
Financial Statements

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

Copies of the Statement of Additional Information dated May 1, 2000 (Form No.
L-11162S), are available without charge. To request a copy, please clip this
coupon on the dotted line above, enter your name and address in the spaces
provided below, and mail to: The Travelers Insurance Company, Annuity Services,
One Tower Square, Hartford, Connecticut 06183-5030.

Name:
-------------------------------------------------------------------------
Address:
-----------------------------------------------------------------------

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<PAGE> 98

THIS PAGE INTENTIONALLY LEFT BLANK.

<PAGE> 99

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

AND

THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES

GROUP VARIABLE ANNUITY CONTRACTS

Issued By

THE TRAVELERS INSURANCE COMPANY

Pension and Profit-Sharing Programs

<PAGE> 100

================================================================================
THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
================================================================================

INDIVIDUAL VARIABLE ANNUITY CONTRACTS

issued by

THE TRAVELERS INSURANCE COMPANY
One Tower Square, Hartford, Connecticut 06183
Telephone: 800-842-9368

The basic purpose of the variable annuity contract described in this Prospectus
is to provide lifetime annuity payments which will vary with the investment
performance of one or more Separate Accounts. The contracts described in this
Prospectus are available for use by purchasers who previously held individual
nonqualified contracts issued by The Travelers Insurance Company ("Company") and
funded by The Travelers Fund B for Variable Contracts and/or The Travelers Fund
B-1 for Variable Contracts (Contract Numbers VG-30 and LVA-10FB) and who
exchanged such contracts in 1993 for the contracts offered by this Prospectus.
The Contracts described herein are not available for new sales, although
additional purchase payments may be made by purchasers who own existing
contracts.

The Separate Accounts available for funding the variable annuities described in
this Prospectus have different investment objectives. The Travelers Growth and
Income Stock Account for Variable Annuities ("Account GIS") seeks long-term
accumulation of principal through capital appreciation and retention of net
investment income, by investing in a portfolio of equity securities, mainly
common stocks. The Travelers Quality Bond Account for Variable Annuities
("Account QB") seeks to select investments from the point of view of an investor
concerned primarily with current income, moderate capital volatility and total
return. Account QB proposes to achieve this objective by investing in money
market instruments and publicly traded debt securities. The Contract Owner bears
the investment risk.

This Prospectus sets forth concisely the information about the Separate Accounts
that you should know before investing. Please read it and retain it for future
reference. Additional information about the Separate Accounts is contained in a
Statement of Additional Information ("SAI") dated May 1, 2000 which has been
filed with the Securities and Exchange Commission ("SEC") and is incorporated by
reference into this Prospectus. A copy may be obtained, without charge, by
writing to The Travelers Insurance Company, Annuity Services, One Tower Square,
Hartford, Connecticut 06183-5030, Attention: Manager, or by calling
800-842-9368. The Table of Contents of the SAI appears in Appendix A of this
Prospectus.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.

VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OF ANY BANK AND ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.

THE DATE OF THIS PROSPECTUS IS MAY 1, 2000.

<PAGE> 101

TABLE OF CONTENTS

<TABLE>
<S> <C>
GLOSSARY OF SPECIAL TERMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv
FEE TABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
CONDENSED FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
DESCRIPTION OF THE TRAVELERS AND THE SEPARATE ACCOUNTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Insurance Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
The Separate Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INVESTMENT ALTERNATIVES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT GIS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Investment Objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Fundamental Investment Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT QB). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Investment Objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Fundamental Investment Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
MANAGEMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
VOTING RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
CHARGES AND DEDUCTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Deductions from Purchase Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Premium Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Minimum Death Benefit and Minimum Accumulated Value Benefit Charge . . . . . . . . . . . . . . . . . . 5
Insurance Charge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Investment Advisory and Sub-Advisory Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
THE VARIABLE ANNUITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
General Benefit Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Termination by the Company and Termination Amount . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Deferred Maturity Option . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Suspension of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Required Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Federal and State Income Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
ACCUMULATION PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Application of Purchase Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Number of Accumulation Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Accumulation Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Net Investment Rate and Net Investment Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Cash Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Cash Surrender (Redemption) or Withdrawal Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Death Benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Minimum Accumulated Value Benefit Upon Election of an Annuity-Account QB . . . . . . . . . . . . . 9
Right to Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Transfer Between Separate Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

PAYOUT PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
</TABLE>

i
<PAGE> 102

<TABLE>
<S> <C>
Separate Account Allocation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Determination of First Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Annuity Unit Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Number of Annuity Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Determination of Second and Subsequent Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Annuity Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Income Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Election of Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

FEDERAL TAX CONSIDERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Nonqualified Annuities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Federal Income Tax Withholding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Tax Advice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
STATE REGULATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
LEGAL PROCEEDINGS AND OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
APPENDIX A - Contents of the Statement of Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>

<PAGE> 103

GLOSSARY OF SPECIAL TERMS

As used in this Prospectus, the following terms have the indicated meanings:

ACCUMULATION UNIT: basic measure used to determine the value of a contract
before Annuity Payments begin.

ANNUITANT: the person on whose life the Variable Annuity contract is issued.

ANNUITY PAYMENTS: a series of periodic payments for life; for life with either a
minimum number of payments or a determinable sum assured; or for the joint
lifetime of the Annuitant and another person and thereafter during the lifetime
of the survivor.

ANNUITY UNIT: the basic measure used to determine the dollar amount of Annuity
Payments.

BOARD OF MANAGERS: the persons directing the investment and administration of a
managed Separate Account.

CASH SURRENDER VALUE (REDEMPTION VALUE): the amount payable to the Owner or
other payee upon termination of the contract during the lifetime of the
Annuitant.

CASH VALUE: the current value of Accumulation Units credited to the contract
less any administrative charges.

COMPANY: The Travelers Insurance Company. Also referred to as "us" or "we."

COMPANY'S HOME OFFICE: the principal offices of The Travelers Insurance Company
located at One Tower Square, Hartford, Connecticut.

CONTRACT DATE: the date on which the contract, benefits, and the provisions of
the contract become effective.

CONTRACT YEARS: annual periods computed from the Contract Date.

INCOME PAYMENTS: optional forms of periodic payments made by the Company which
are not based on the life of the Annuitant.

MAJORITY VOTE: a "majority vote of the outstanding voting securities" is defined
in the Investment Company Act of 1940 as the lesser of (i) 67% or more of the
votes present at a meeting, if Contract Owners holding more than 50% of the
total voting power of all Contract Owners in the Separate Account are present or
represented by proxy, or (ii) more than 50% of the total voting power of all
Contract Owners in the Separate Account.

MATURITY DATE: the date on which the first Annuity Payment is to begin.

MINIMUM ACCUMULATED VALUE BENEFIT: the minimum amount applied to effect an
Annuity with respect to amounts allocated to Account QB.

MINIMUM DEATH BENEFIT: the minimum amount payable upon the death of an Annuitant
before Annuity or Income Payments begin.

NET PURCHASE PAYMENT: the amount applied to the purchase of Accumulation Units,
which is equal to the purchase payment less deductions for sales expenses and
any applicable premium taxes.

OWNER: a person having rights to benefits under the contract during the lifetime
of the Annuitant; the owner may or may not be the Annuitant.

iii
<PAGE> 104

PURCHASE PAYMENT: a gross amount paid to the Company under a variable annuity
contract during the accumulation period.

VALUATION DATE: generally, a day on which the Separate Account is valued. A
valuation date is any day on which the New York Stock Exchange is open for
trading. The value of Accumulation Units and Annuity Units will be determined as
of the close of trading on the New York Stock Exchange.

VALUATION PERIOD: the period between the close of business on successive
Valuation Dates.

VARIABLE ANNUITY: an annuity contract which provides for accumulation and for
Annuity Payments which vary in amount in accordance with the investment
experience of a Separate Account.

There are eligibility requirements for purchasers described elsewhere in this
Prospectus. This Prospectus does not constitute a solicitation of an offer to
acquire any interest or participation in the Variable Annuity described in this
Prospectus to any person who is ineligible for purchase.

iv
<PAGE> 105

SUMMARY

INTRODUCTION
This Prospectus describes an individual flexible premium variable annuity
Contract offered by The Travelers Insurance Company (the "Company"). The
Contract is available for use by individual non-qualified purchasers who
previously held individual contracts issued by the Company and funded by The
Travelers Fund B for Variable Contracts and/or The Travelers Fund B-1 for
Variable Contracts and who exchanged such contracts in 1993 for the Contracts
offered by this Prospectus. The Contracts described herein are not available for
new sales, although additional purchase payments may be made by purchasers who
own existing Contracts. A contract may be returned within ten days of purchase.
The applicant bears the investment risk during the period. (See "Right to
Return.")

INVESTMENT ALTERNATIVES
There are two Separate Accounts currently available for funding the Variable
Annuity contracts described herein: Account GIS and Account QB. Both Accounts
are registered with the SEC as diversified open-end management investment
companies under the Investment Company Act of 1940, as amended ("1940 Act"). The
basic investment objectives of these separate accounts are as follows: Account
GIS--long-term accumulation of principal through capital appreciation and
retention of net investment income; and Account QB--current income, moderate
capital volatility and total return. As is true with all investment companies,
there can be no assurance that the objectives of the Investment Alternatives
will be achieved. (For a complete discussion of the investment objectives and
policies for these funds, please refer to the "Investment Alternatives" section
beginning on page 1.)

RISK FACTORS
The investment experience on equity investments over a period of time will tend
to reflect levels of stock market prices and dividend payouts. Both are affected
by diverse factors, including not only business conditions and investor
confidence in the economy, but current conditions in a particular industry or
company. The yield on a common stock is not contractually determined. Equity
securities are subject to financial risks relating to the earning stability and
overall financial soundness of an issuer. They are also subject to market risks
relating to the effect of general changes in the securities market on the price
of a security.

The yield on debt instruments over a period of time should reflect prevailing
interest rates, which depend on a number of factors, including government action
in the capital markets, government fiscal and monetary policy, needs of
businesses for capital goods for expansion, and investor expectations as to
future inflation. The yield on a particular debt instrument is also affected by
the risk that the issuer will be unable to pay principal and interest.

INVESTMENT ADVISORY SERVICES
Travelers Asset Management International Company LLC ("TAMIC") furnishes such
services to Account QB and Account GIS, according to the terms of written
agreements. TAMIC receives an amount equivalent on an annual basis to 0.3233% of
the average daily net asset value of Account QB. TAMIC receives an amount
equivalent on an annual basis to a maximum of 0.65% of the aggregate average
daily net assets of Account GIS, scaling down to 0.40%. In addition, The
Travelers Investment Management Company ("TIMCO") provides sub-advisory services
in connection with the day-to-day operations of Account GIS. For furnishing
investment sub-advisory services to Account GIS, TIMCO is paid by TAMIC an
amount equivalent on an annual basis to a maximum of 0.45% of the aggregate
average daily net assets of Account GIS, scaling down to 0.20%. (See
"Management," and "Investment Advisory Fees.")

SALES CHARGES
Prior to the Maturity Date, all or part of the contract value may be withdrawn.
(See "Cash Surrender (Redemption) or Withdrawal Value.") A federal tax penalty
may apply. This Contract is not available for new sales, although additional
purchase payments may be made by purchasers who own existing Contracts. The
sales charge for additional purchase payments is 4.00% of each additional
purchase payment (4.17% of the amount invested). There is no minimum purchase
payment under this contract.

v
<PAGE> 106

OTHER CHARGES
Premium taxes may apply to annuities in a few states. These taxes currently
range from 0.5% to 5.0%, depending upon jurisdiction. The Company will deduct
any applicable premium tax from the Contract Value, either upon death, surrender
or annuitization, or at the time Purchase Payments are made to the Contract, but
no earlier than when the Company has a tax liability under state law. (See
"Premium Tax.")

A deduction of 1.0017% on an annual basis will be made on each Valuation Date
for mortality and expense risks assumed by the Company. The 1.0017% insurance
charge is comprised of 0.8500% for mortality risks and 0.1517% for expense
risks. (See "Insurance Charge.")

ANNUITY PAYMENTS
At the Maturity Date, the contract provides lifetime Annuity Payments, as well
as other types of payout plans. (See "Annuity Options" and "Income Options.") If
a variable payout is selected, the payments will continue to vary with the
investment performance of the selected Investment Alternatives. Before Annuity
or Income Payments begin, transfers may be made among available Investment
Alternatives without fee, penalty or charge. (See "Transfer Between Separate
Accounts.")

OTHER PROVISIONS
If the Annuitant dies before Annuity or Income Payments begin, the death benefit
is the larger of the Cash Value less any premium tax, or Premium Payments less
prior surrenders. There is no charge for the Minimum Death Benefit. (See "Death
Benefit", and "Charges and Deductions.")

After the tenth Contract Year, a minimum amount is payable upon the election of
an Annuity Option with respect to amounts that were allocated to Account QB
during the accumulation period. There is no charge for the Minimum Accumulated
Value Benefit. (See "Minimum Accumulated Value Benefit" and "Charges and
Deductions.")

Purchasers have certain voting rights under the contracts. (See "Voting
Rights.") The Company reserves the right to terminate inactive contracts under
certain circumstances. (See "Termination by the Company and Termination
Amount.")

vi
<PAGE> 107

FEE TABLE

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES (GIS)

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES (QB)

<TABLE>
<CAPTION>
GIS QB
--- --
CONTRACT OWNER TRANSACTION EXPENSES
<S> <C> <C> <C>
Sales Charge for Additional Purchase Payments* 4.00% 4.00%
ANNUAL EXPENSES (as a percentage of average net assets)
Mortality and Expense Risk Fees 1.00% 1.00%
Management Fees 0.60% 0.32%
TOTAL ANNUAL EXPENSES 1.60% 1.32%
</TABLE>

EXAMPLE
THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN.

For additional purchase payments made into the Contract subsequent to the
Exchange Offer (4% Sales Charge applies), whether or not you surrender your
contract at the end of the applicable period, you would have paid the following
expenses on a $1,000 investment, assuming a 5% annual return on assets, after:

<TABLE>
<CAPTION>
GIS QB
--- --

<S> <C> <C> <C>
1 year $ 64 $ 61

3 years $ 96 $ 88

5 years $132 $117

10 years $182 $153
</TABLE>

The purpose of the Fee Table is to assist Contract Owners in understanding the
various costs and expenses that a Contract Owner will bear directly or
indirectly. For more complete descriptions of the various costs and expenses,
including possible waivers or reductions of these expenses, see "Charges and
Deductions." Expenses shown do not include premium taxes which may be
applicable.

* This Contract is not available for new sales; however, additional
purchase payments may be made by purchasers who own existing
contracts.

vii
<PAGE> 108
CONDENSED FINANCIAL INFORMATION

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES

Per Unit Data for an Accumulation and Annuity Unit outstanding
throughout each year

The following information for the fiscal year ended December 31, 1999 has been
audited by KPMG LLP, independent accountants, whose report thereon appears in
Account GIS's Annual Report as of and for the year ended December 31, 1999. The
following information for the fiscal years ended December 31, 1990 through
December 31, 1998 has been audited by other independent accountants. The
information set out below should be read in conjunction with the financial
statements and related notes that also appear in Account's GIS's Annual Report,
which is incorporated by reference into the Statement of Additional
Information.

CONTRACTS ISSUED ON OR AFTER MAY 16, 1983.

SELECTED PER UNIT DATA 1999 1998 1997
-------- -------- --------
<S> <C> <C> <C>
Total investment income . . . . . . . . . . . . . . . . . . . . . . $ .256 $ .234 $ .228
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .385 .303 .228
-------- -------- --------
Net investment income (loss). . . . . . . . . . . . . . . . . . . . (.129) (.069) .000
Unit Value at beginning of year . . . . . . . . . . . . . . . . . 19.253 14.955 11.371
Net realized and change in unrealized gains (losses). . 4.312 4.367 3.584
-------- -------- --------
Unit Value at end of year . . . . . . . . . . . . . . . . . . . . . $ 23.436 $ 19.253 $ 14.955
======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value . . . . . . . . . . . . . . $ 4.18 $ 4.30 $ 3.58
Ratio of operating expenses to average net assets . . . . 1.85% 1.81% 1.70%
Ratio of net investment income to average net assets . (.62)% (.41)% .00%
Number of units outstanding at end of year (thousands) 32,648 32,051 29,545
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . 47% 50% 64%

CONTRACTS ISSUED PRIOR TO MAY 16, 1983.

SELECTED PER UNIT DATA 1999 1998 1997
-------- -------- --------
Total investment income . . . . . . . . . . . . . . . . . . . . . . $ .267 $ .243 $ .233
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .347 .272 .201
-------- -------- --------
Net investment income (loss) . . . . . . . . . . . . . . . . . . (.080) (.029) .032
Unit Value at beginning of year . . . . . . . . . . . . . . . . . 20,017 15,510 11.763
Net realized and change in unrealized gains (losses) . 4,490 4.536 3.715
-------- -------- --------
Unit Value at end of year . . . . . . . . . . . . . . . . . . . . . $ 24.427 $ 20.017 $ 15.510
======== ======== ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value . . . . . . . . . . . . . $ 4.41 $ 4.51 $ 3.75
Ratio of operating expenses to average net assets . . . 1.60% 1.56% 1.45%
Ratio of net investment income (loss) to average net assets . (.37)% (.16)% .24%
Number of units outstanding at end of year (thousands) 12,646 13,894 15,194
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . 47% 50% 64%
</TABLE>

CONTRACTS ISSUED ON OR AFTER MAY 16, 1983.

SELECTED PER UNIT DATA 1996 1995 1994
--------- -------- -------
<S> <C> <C> <C>
Total investment income . . . . . . . . . . . . . . . . . . . . . . $ .212 $ .205 $ .189
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .175 .140 .115
--------- -------- -------
Net investment income (loss). . . . . . . . . . . . . . . . . . . . .037 .065 .074
Unit Value at beginning of year . . . . . . . . . . . . . . . . . 9.369 6.917 7.007
Net realized and change in unrealized gains (losses). . 1.965 2.387 (.164)
--------- -------- -------
Unit Value at end of year . . . . . . . . . . . . . . . . . . . . . $ 11.371 $ 9.369 $ 6.917
======== ======== =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value . . . . . . . . . . . . . . $ 2.00 $ 2.45% (.09)
Ratio of operating expenses to average net assets . . . . 1.70% 1.70% 1.65%
Ratio of net investment income to average net assets . .36% .79% 1.05%
Number of units outstanding at end of year (thousands) 27,578 26,688 26,692
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . 85% 96% 103%

CONTRACTS ISSUED PRIOR TO MAY 16, 1983.

SELECTED PER UNIT DATA 1996 1995 1994
--------- -------- -------
Total investment income . . . . . . . . . . . . . . . . . . . . . . .216 .208 $ .192
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .154 .123 .100
--------- -------- -------
Net investment income (loss) . . . . . . . . . . . . . . . . . . .062 .085 .092
Unit Value at beginning of year . . . . . . . . . . . . . . . . . 9.668 7.120 7.194
Net realized and change in unrealized gains (losses) . 2.033 2.463 (.166)
--------- -------- -------
Unit Value at end of year . . . . . . . . . . . . . . . . . . . . . $ 11.763 $ 9.668 $ 7.120
========= ======== =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value . . . . . . . . . . . . . $ 2.10 $ 2.55% (.07)
Ratio of operating expenses to average net assets . . . 1.45% 1.45% 1.41%
Ratio of net investment income (loss) to average net assets . .60% 1.02% 1.30%
Number of units outstanding at end of year (thousands) 16,554 17,896 19,557
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . 85% 96% 103%
</TABLE>
<TABLE>
<CAPTION>

CONTRACTS ISSUED ON OR AFTER MAY 16, 1983.

SELECTED PER UNIT DATA 1993 1992 1991 1990
--------- --------- --------- --------
<S> <C> <C> <C> <C>
Total investment income . . . . . . . . . . . . . . . . . . . . . . $ .184 $ .188 $ .198 $ .192
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .106 .098 .091 .079
--------- --------- --------- --------
Net investment income (loss). . . . . . . . . . . . . . . . . . . . .078 .090 .107 .113
Unit Value at beginning of year . . . . . . . . . . . . . . . . . 6.507 6.447 5.048 5.295
Net realized and change in unrealized gains (losses). . .422 (.030) 1.292 (.360)
--------- --------- --------- --------
Unit Value at end of year . . . . . . . . . . . . . . . . . . . . . $ 7.007 $ 6.507 $ 6.447 $ 5.048
========= ========= ========= ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value . . . . . . . . . . . . . . .50 .06 1.40 (.25)
Ratio of operating expenses to average net assets . . . . 1.57% 1.58% 1.58% 1.57%
Ratio of net investment income to average net assets . 1.15% 1.43% 1.86% 2.25%
Number of units outstanding at end of year (thousands) 28,497 29,661 26,235 19,634
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . 81% 189% 319% 54%

CONTRACTS ISSUED PRIOR TO MAY 16, 1983.

SELECTED PER UNIT DATA 1993 1992 1991 1990
--------- --------- --------- --------
Total investment income . . . . . . . . . . . . . . . . . . . . . . $ .189 $ .192 $ .201 $ .199
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .092 .085 .077 .069
--------- --------- --------- --------
Net investment income (loss) . . . . . . . . . . . . . . . . . . .097 .107 .124 .130
Unit Value at beginning of year . . . . . . . . . . . . . . . . . 6.664 6.587 5.145 5.383
Net realized and change in unrealized gains (losses) . .433 (.030) 1.318 (.368)
--------- --------- --------- --------
Unit Value at end of year . . . . . . . . . . . . . . . . . . . . . $ 7.194 $ 6.664 $ 6.587 $ 5.145
========== ======== ========= ========
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value . . . . . . . . . . . . . .53 .08 1.44 (.24)
Ratio of operating expenses to average net assets . . . 1.33% 1.33% 1.33% 1.33%
Ratio of net investment income (loss) to average net assets . 1.40% 1.67% 2.11% 2.50%
Number of units outstanding at end of year (thousands) 21,841 22,516 24,868 28,053
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . . 81% 189% 319% 54%
</TABLE>

1
<PAGE> 109

CONDENSED FINANCIAL INFORMATION

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

Per Unit Data for an Accumulation and Annuity Unit outstanding
throughout each year

The following information for the fiscal year ended December 31, 1999 has been
audited by KPMG LLP, independent accountants, whose report thereon appears in
Account GIS's Annual Report as of and for the year ended December 31, 1999. The
following information for the fiscal years ended December 31, 1990 through
December 31, 1998 has been audited by other independent accountants. The
information set out below should be read in conjunction with the financial
statements and related notes that also appear in Account's GIS's Annual Report,
which is incorporated by reference into the Statement of Additional
Information.

CONTRACTS ISSUED ON OR AFTER MAY 16, 1983.

SELECTED PER UNIT DATA 1999 1998 1997 1996
------- ------- ------- -------
<S> <C> <C> <C> <C>
Total investment income . . . . . . . . . . . . . . . . . . . . . $ .378 $ .350 $ .342 $ .368
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .091 .088 .082 .078
------- ------- ------- -------
Net investment income . . . . . . . . . . . . . . . . . . . . . . .287 .262 .260 .290
Unit Value at beginning of year . . . . . . . . . . . . . . . . . 5.765 5.393 5.060 4.894
Net realized and change in unrealized gains (losses) . . (.242) .110 .073 (.124)
------- ------- ------- -------
Unit Value at end of year . . . . . . . . . . . . . . . . . . . . . $ 5.810 $ 5.765 $ 5.393 $ 5.060
======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value . . . . . . . . . . . . . . $ .04 $ .37 $ .33 $ .17
Ratio of operating expenses to average net assets . . . . . 1.57% 1.57% 1.57% 1.57%
Ratio of net investment income to average net assets . . 4.97% 4.71% 5.00% 5.87%
Number of units outstanding at end of year (thousands) 17,412 21,251 21,521 24,804
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . 340% 438% 196% 176%

CONTRACTS ISSUED PRIOR TO MAY 16, 1983.

SELECTED PER UNIT DATA 1999 1998 1997 1996
------- ------- ------- -------
Total investment income . . . . . . . . . . . . . . . . . . . . . $ .393 $ .363 $ .353 $ .379
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .080 .076 .071 .067
------- ------- ------- -------
Net investment income . . . . . . . . . . . . . . . . . . . . . . .313 .287 .282 .312
Unit Value at beginning of year . . . . . . . . . . . . . . . . . 5.994 5.593 5.234 5.050
Net realized and change in unrealized gains (losses) . . . (.252) .114 .077 (.128)
------- ------- ------- -------
Unit Value at end of year . . . . . . . . . . . . . . . . . . . . $ 6.055 $ 5.994 $ 5.593 $ 5.234
======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value . . . . . . . . . . . . . . $ .06 $ .40 $ .36 $ .18
Ratio of operating expenses to average net assets . . . . . . 1.33% 1.33% 1.33% 1.33%
Ratio of net investment income to average net assets . . . 5.22 4.96 5.25% 6.12%
Number of units outstanding at end of year (thousands) . 6,224 6,880 7,683 8,549
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . 340% 438% 196% 176%
</TABLE>

CONTRACTS ISSUED ON OR AFTER MAY 16, 1983.

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

CONTRACTS ISSUED PRIOR TO MAY 16, 1983.

SELECTED PER UNIT DATA 1995 1994 1993 1992
------- ------- ------- -------
Total investment income . . . . . . . . . . . . . . . . . . . . . $ .328 $ .318 $ .306 $ .317
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .063 .059 .058 .050
------- ------- ------- -------
Net investment income . . . . . . . . . . . . . . . . . . . . . . .265 .259 .248 .267
Unit Value at beginning of year . . . . . . . . . . . . . . . . . 4.400 4.498 4.150 3.880
Net realized and change in unrealized gains (losses) . . . .385 (.357) .100 .003
------- ------- ------- -------
Unit Value at end of year . . . . . . . . . . . . . . . . . . . . $ 5.050 $ 4.400 $ 4.498 $ 4.150
======= ======= ======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value . . . . . . . . . . . . . . .65 (.10) .35 .27
Ratio of operating expenses to average net assets . . . . . . 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%
Number of units outstanding at end of year (thousands) . 9,325 10,694 12,489 13,416
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . 138% 27% 24% 23%
</TABLE>

CONTRACTS ISSUED ON OR AFTER MAY 16, 1983.

SELECTED PER UNIT DATA * 1991 1990
-------- -------
<S> <C> <C>
Total investment income . . . . . . . . . . . . . . . . . . . . . $ .299 $ .277
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .056 .048
-------- -------
Net investment income . . . . . . . . . . . . . . . . . . . . . . .243 .229
Unit Value at beginning of year . . . . . . . . . . . . . . . . . 3.357 3.129
Net realized and change in unrealized gains (losses) . . .199 (.001)
-------- -------
Unit Value at end of year . . . . . . . . . . . . . . . . . . . . . $ 3.799 $ 3.357
======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value . . . . . . . . . . . . . . .44 .23
Ratio of operating expenses to average net assets . . . . . 1.57% 1.57%
Ratio of net investment income to average net assets . . 6.84% 7.06%
Number of units outstanding at end of year (thousands) 17,211 14,245
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . 21% 41%

CONTRACTS ISSUED PRIOR TO MAY 16, 1983.

SELECTED PER UNIT DATA * 1991 1990
-------- -------
Total investment income . . . . . . . . . . . . . . . . . . . . . $ .304 $ .281
Operating expenses . . . . . . . . . . . . . . . . . . . . . . . . .048 .040
-------- -------
Net investment income . . . . . . . . . . . . . . . . . . . . . . .256 .241
Unit Value at beginning of year . . . . . . . . . . . . . . . . . 3.421 3.181
Net realized and change in unrealized gains (losses) . . . .203 (.001)
-------- -------
Unit Value at end of year . . . . . . . . . . . . . . . . . . . . $ 3.880 $ 3.421
======= =======
SIGNIFICANT RATIOS AND ADDITIONAL DATA
Net increase (decrease) in unit value . . . . . . . . . . . . . . .46 .24
Ratio of operating expenses to average net assets . . . . . . 1.33% 1.33%
Ratio of net investment income to average net assets . . . 7.09% 7.31%
Number of units outstanding at end of year (thousands) . 14,629 16,341
Portfolio turnover rate . . . . . . . . . . . . . . . . . . . . . 21% 41%
</TABLE>

* On May 1, 1990, TAMIC replaced TIMCO as the investment adviser for Account QB.

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<PAGE> 110

DESCRIPTION OF THE TRAVELERS AND THE SEPARATE ACCOUNTS

THE INSURANCE COMPANY

The Travelers Insurance Company (the "Company" or "The Travelers", "us" or "we")
is a stock insurance company chartered in 1864 in Connecticut and continuously
engaged in the insurance business since that time. It is licensed to conduct
life insurance business in all states of the United States, the District of
Columbia, Puerto Rico, Guam, the U.S. and British Virgin Islands, and the
Bahamas. The Company's Home Office is located at One Tower Square, Hartford,
Connecticut 06183.

The Company is indirectly owned by a wholly owned subsidiary
of Citigroup Inc. Citigroup Inc. consists of businesses that produce a broad
range of financial services, including asset management, banking and consumer
finance, credit and charge cards, insurance, investments, investment banking and
trading. Among its businesses are Citibank, Commercial Credit, Primerica
Financial Services, Salomon Smith Barney, Salomon Smith Barney Asset Management,
and Travelers Property Casualty.

THE SEPARATE ACCOUNTS

Each of the Separate Accounts available under the Variable Annuity contracts
described in this Prospectus is registered with the SEC under the 1940 Act and
will comply with the provisions 1940 Act, and meets the definition of a separate
account under the federal securities laws. Additionally, the operations of each
of the Separate Accounts are subject to the provisions of Section 38a-433 of the
Connecticut General Statutes which authorizes the Connecticut Insurance
Commissioner to adopt regulations under it. The Section contains no restrictions
on investments of the Separate Accounts, and the Commissioner has adopted no
regulations under the Section that affect the Separate Accounts.

GENERAL

Under Connecticut law, the assets of the Separate Accounts will be held for the
exclusive benefit of the owners of, and the persons entitled to payment under,
the Variable Annuity contracts offered by this Prospectus and under all other
contracts which provide for accumulated values or dollar amount payments to
reflect investment results of the Separate Accounts. The assets in the Separate
Accounts are not chargeable with liabilities arising out of any other business
which the Company may conduct. The obligations arising under the Variable
Annuity contracts are obligations of the Company.

INVESTMENT ALTERNATIVES

The Investment Alternatives available in connection with the Variable Annuity
contracts described herein each have different investment objectives and
fundamental investment policies, as are set forth below. Neither the investment
objectives nor the fundamental investment policies of an Account can be changed
without a vote of a majority of the outstanding voting securities of the
Account, as defined in the 1940 Act.

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<PAGE> 111

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT GIS)

INVESTMENT ADVISER: TIMCO

PORTFOLIO MANAGER: Sandip Bhagat

INVESTMENT OBJECTIVE: Long-term accumulation of principal through capital
appreciation and retention of net investment income.

KEY INVESTMENTS: Common stock of large U.S. companies.

SELECTION PROCESS: Account GIS invests primarily in stocks of large U.S.
companies representing a wide range of industries. Stock selection is based on a
quantitative screening process which favors companies that achieve earnings
growth above consensus expectations, and whose stocks offer attractive relative
value. In order to achieve consistent performance, TIMCO manages Account GIS to
mirror the overall risk, sector weightings and growth/value style
characteristics of the Standard & Poor's 500 Stock Index ("S&P 500"). The S&P
500 is a value-weighted equity index comprised mainly of large-company stocks.

- fixed-income securities such as bonds and notes, including U.S.
Government securities;
- exchange-traded stock index futures;
- covered call options, put options;
- foreign securities.

For a complete list of all investments available to Account GIS, please refer to
the "Investments at a Glance" table at the end of this section and in the SAI.

FUNDAMENTAL INVESTMENT POLICIES

The fundamental investment policies of Account GIS permit it to:

1. invest up to 5% of its assets in the securities of any one issuer
(exclusive of securities issued or guaranteed by the United States
government, its agencies or instrumentalities);

2. borrow from banks in amounts of up to 5% of its assets, but only for
emergency purposes;

3. purchase interest in real estate represented by securities for which
there is an established market;

4. make loans through the acquisition of a portion of a privately
placed issue of bonds, debentures or other evidences of indebtedness
of a type customarily purchased by institutional investors;

5. acquire up to 10% of the voting securities of any one issuer (it is
the present practice of Account GIS not to exceed 5% of the voting
securities of any one issuer);

2
<PAGE> 112

6. make purchases on margin in the form of short-term credits which are
necessary for the clearance of transactions; and place up to 5% of
its net asset value in total margin deposits for positions in
futures contracts; and

7. invest up to 5% of its assets in restricted securities (securities
which may not be publicly offered without registration under the
Securities Act of 1933).

THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES (ACCOUNT QB)

INVESTMENT ADVISER: TAMIC

PORTFOLIO MANAGER: F. Denney Voss

INVESTMENT OBJECTIVE: Current income, moderate capital volatility and total
return.

KEY INVESTMENTS: Investment grade debt securities and money market
instruments.

- treasury bills - bonds, notes, debentures
- repurchase agreements - convertible securities
- commercial paper - when-issued securities
- certificates of deposit - interest rate future contracts
- banker's acceptances

For a complete list of all investments available to Account QB, please refer to
the "Investments at a Glance" table at the end of this section and in the SAI.

PRINCIPAL RISK FACTORS: Account QB is most subject to fixed-income securities
risk. For a complete discussion of fixed-income securities risk and other risks
carried by the investment of Account QB, please refer to the "Investments,
Practices and Risks" section of this prospectus.

FUNDAMENTAL INVESTMENT POLICIES

The fundamental investment policies of Account QB permit it to:

1. invest up to 15% of the value of its assets in the securities of any
one issuer (exclusive of obligations of the United States government
and its instrumentalities, for which there is no limit);

2. borrow from banks in amounts of up to 5% of its assets, but only for
emergency purposes;

3. purchase interest in real estate represented by securities for which
there is an established market;

3
<PAGE> 113

4. make loans through the acquisition of a portion of a privately
placed issue of bonds, debentures or other evidences of indebtedness
of a type customarily purchased by institutional investors;

5. acquire up to 10% of the voting securities of any one issuer (it is
the present practice of Account QB not to exceed 5% of the voting
securities of any one issuer); and

6. make purchases on margin in the form of short-term credits which are
necessary for the clearance of transactions; and place up to 5% of
its net asset value in total margin deposits for positions in
futures contracts.

MANAGEMENT

TAMIC is a registered investment adviser that has provided
investment advisory services since its incorporation in 1978. It's principal
offices are located at One Tower Square, Hartford, Connecticut 06183. TAMIC is
an indirect wholly owned subsidiary of Citigroup Inc., a bank holding company.

TIMCO is a registered investment adviser that has provided
investment advisory services since its incorporation in 1967. Its principal
offices are located at One Tower Square, Hartford, Connecticut. TIMCO is a
subsidiary of Salomon Smith Barney Holdings Inc. which is a wholly owned
subsidiary of Citigroup Inc.

VOTING RIGHTS

Owners of the Variable Annuity contracts participating in Accounts GIS and QB
will be entitled to vote at their meetings on (i) any change in the fundamental
investment policies or other policies relative to the account requiring the
Owners' approval; (ii) amendment of the investment advisory agreement; (iii)
election of the members of the Board of Managers of the account; (iv)
ratification of the selection of an independent accountants for the account; (v)
any other matters which, in the future, under the 1940 Act require the Owners'
approval; and (vi) any other business which may properly come before the
meeting.

The number of votes which each Owner may cast, including fractional votes, shall
be determined as of the date to be chosen by the Board of Managers within 75
days of the date of the meeting, and at least 20 days' written notice of the
meeting will be given.

The number of votes which an Owner may cast in the accumulation period is equal
to the number of Accumulation Units credited to the account under the contract.
During the annuity period, the Owner may cast the number of votes equal to (i)
the reserve related to the contract, divided by (ii) the value of an
Accumulation Unit. During the annuity period, an Owner's voting rights will
decline as the reserve for the contract declines. Accounts GIS and QB are also
used to fund certain other Variable Annuity contracts than the Variable Annuity
contracts described in this Prospectus; votes attributable to such other
annuities are computed in an analogous manner.

Votes for which Annuitants were entitled to instruct the Owner, but for which
the Owner has received no instructions, will be cast by the Owner for or against
each proposal to be voted on only in the same proportion as votes for which
instructions have been received.

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<PAGE> 114

On the death of the Annuitant, all voting rights will vest in the beneficiary of
the Variable Annuity contract.

CHARGES AND DEDUCTIONS

Charges under variable annuity contracts offered by this Prospectus are assessed
in two ways: as deductions from purchase payments for sales expenses and
applicable premium taxes, and as charges to the Separate Accounts for investment
advisory services and the assumption of mortality and expense risks.

DEDUCTIONS FROM PURCHASE PAYMENTS

This Contract is not available for new sales, although additional purchase
payments may be made by purchasers who own existing Contracts. The sales charge
for additional purchase payments is 4.00% of each additional purchase payment
(4.17% of the amount invested). There is no minimum Purchase Payment under this
contract.

PREMIUM TAX

Certain state and local governments impose premium taxes. These taxes currently
range from 0.5% to 5.0% depending upon jurisdiction. The Company, in its sole
discretion and in compliance with any applicable state law, will determine the
method used to recover premium tax expenses incurred. The Company will deduct
any applicable premium taxes from the Contract Value either upon death,
surrender, annuitization, or at the time Purchase Payments are made to the
Contract, but no earlier than when the Company has a tax liability under state
law.

MINIMUM DEATH BENEFIT AND MINIMUM ACCUMULATED VALUE BENEFIT CHARGE

There is no charge for the Minimum Death Benefit and the Minimum Accumulated
Value Benefit. (See "Death Benefit" and "Minimum Accumulated Value Benefit.")

INSURANCE CHARGE

There is an insurance charge against the assets of each Separate Account to
cover the mortality and expense risks associated with guarantees which the
Company provides under the Variable Annuity contracts. This charge, on an annual
basis, is 1.0017% of the Separate Account value and is deducted on each
Valuation Date at the rate of 0.00363% for each day in the Valuation Period.

The mortality risk assumed by the Company under the contract assures an
Annuitant that neither the Annuitant's own longevity nor an improvement in life
expectancy generally will have any adverse effect on the monthly Annuity
Payments which will be paid under the contract and relieves the Owner from the
risk that the Annuitant will outlive the funds which have been accumulated for
retirement.

With respect to amounts which are not applied to provide an annuity (i.e.,
amounts which are surrendered for cash or which have been paid as Income
Payments), the Company bears no mortality risk and amounts previously charged to
cover this risk are of no benefit to the Owner.

The Company also assumes the risk that the charges under the contracts, which
cannot be increased during the duration of the contract, will be insufficient to
cover actual costs. The Company does not, however, project any deficiency in the
amount of the sales load.

If the amount deducted for these mortality and expense risks is not sufficient
to cover actual mortality costs and expense shortfalls, the loss is borne by the
Company. If the deduction is more than sufficient, the excess will be a profit
to the Company. The Company expects to make a profit from the insurance charge.

INVESTMENT ADVISORY AND SUB-ADVISORY FEES

5
<PAGE> 115

TAMIC furnishes investment management and advisory services to Account GIS
according to the terms of written agreements. TAMIC receives an amount
equivalent on an annual basis to 0.3233% of the average daily net assets of
Account QB. For Account GIS, TAMIC receives an amount equivalent on an annual
basis to the following:

<TABLE>
<CAPTION>
Annual Aggregate Net Asset
------ -------------------
Management Fee Value of the Account
-------------- --------------------
<S> <C> <C> <C>
0.65% of the first $ 500,000,000, plus
0.55% of the next $ 500,000,000, plus
0.50% of the next $ 500,000,000, plus
0.45% of the next $ 500,000,000, plus
0.40% of amounts over $ 2,000,000,000
</TABLE>

TIMCO provides sub-advisory services to Account GIS in connection with the day
to day operations of the Account.

For furnishing investment Sub-Advisory services to Account
GIS, TIMCO is paid by TAMIC an amount equivalent on an annual basis to the
following:

<TABLE>
<CAPTION>
Annual Aggregate Net Asset
------ -------------------
Sub-Advisory Fee Value of the Account
---------------- --------------------
<S> <C> <C> <C>
0.45% of the first $ 700,000,000, plus
0.275% of the next $ 300,000,000, plus
0.25% of the next $ 500,000,000, plus
0.225% of the next $ 500,000,000, plus
0.20% of amounts over $ 2,000,000,000
</TABLE>

These fees are calculated daily and paid monthly.

THE VARIABLE ANNUITIES

The individual Variable Annuities described in this Prospectus are both
insurance products and securities. As insurance products, they are subject to
the insurance laws and regulations of each state. The underlying product is an
annuity under which Purchase Payments are paid to the Company and credited to
the Owner's contract to accumulate until retirement.

The following brief description of the key features of the Variable Annuity is
subject to the specific terms of the contract itself. Reference should also be
made to the Glossary of Special Terms.

GENERAL BENEFIT DESCRIPTION

Under the Automatic Option, the Company will automatically begin paying Annuity
Payments to the Owner on the Maturity Date, if the Annuitant is then living.
(See "Automatic Option.") The Owner may choose instead a number of alternative
arrangements for benefit payments. If the Annuitant dies before a payout begins,
the Company will pay a death benefit under the Contract (see "Death Benefit.").
After the tenth Contract Year, a minimum amount is payable upon the election of
an Annuity Option with respect to amounts that were allocated to Account QB
during the accumulation period (see "Minimum Accumulated Value Benefit").

TERMINATION BY THE COMPANY AND TERMINATION AMOUNT

No Purchase Payments after the first are required to keep the contract in
effect. However, the Company reserves the right to terminate the contract on any
Valuation Date if the Cash Value as of that date is less than $500 and purchase
payments have not been paid for at least three years. Termination will not occur
until 31 days after the Company has mailed notice of termination to the Owner at
the last known address and to any assignee of record. If the contract is

6
<PAGE> 116

terminated, the Company will pay to the Owner the Cash Value of the contract, if
any, less any applicable premium tax not previously deducted.

DEFERRED MATURITY OPTION

Up to 30 days before the Maturity Date, the Owner may request (in writing) a
Deferred Maturity Date. The same terms and conditions applicable to the contract
before the Maturity Date will continue to the Deferred Maturity Date. If the
Annuitant dies before the Deferred Maturity Date, the Company will pay the Cash
Value to the beneficiary. The Deferred Maturity Date may be any time before the
Annuitant's 70th birthday, or, with the consent of the Company, any later date.
(See "Federal Tax Considerations.") If the Annuitant is living on the Deferred
Maturity Date, the annuity will be payable, unless otherwise elected, under the
same terms and conditions as the annuity that would have been payable at the
Maturity Date had a Deferred Maturity Date not been elected. The amount of the
Annuity Payment will be determined as described in "Annuity Options."

SUSPENSION OF PAYMENTS

If a national stock exchange is closed (except for holidays or weekends), or
trading is restricted due to an existing emergency as defined by the SEC so that
disposal of the Separate Account's investments or determination of its net asset
value is not reasonably practicable, or the SEC has ordered that the right of
redemption (surrender) be suspended for the protection of Owners, the Company
may postpone all procedures (including making Annuity Payments) which require
valuation of Separate Accounts until the stock exchange is reopened and trading
is no longer restricted.

REQUIRED REPORTS

As often as required by law, but at least once in each Contract Year before the
due date of the first Annuity Payment, the Company will furnish a report which
will show the number of Accumulation Units credited to the contract in each
Separate Account and the corresponding Accumulation Unit Value as of the date of
the report. The Company will keep all records required under federal or state
laws.

FEDERAL AND STATE INCOME TAX WITHHOLDING

The federal tax law requires income tax withholding on distributions from
pension plans and annuity contracts, unless the Owner, participant or
beneficiary elects not to have withholding apply. Some states also require
withholding from pension and annuity payments unless the Owner, participant or
beneficiary elects not to have withholding apply. (For further information on
federal withholding, see "Federal Income Tax Withholding.")

ACCUMULATION PROVISIONS

APPLICATION OF PURCHASE PAYMENTS

The initial Purchase Payment is due and payable before the contract becomes
effective. Each Purchase Payment is payable at the Company's Home Office.

If the application for the contract is in good order, the first net Purchase
Payment (the Purchase Payment after deduction of sales charges and any
applicable premium tax) will be applied by the Company to provide Accumulation
Units to the credit of the contract as of the valuation next following receipt
of the Purchase Payment in the mail at the Company's Home Office, or on the date
indicated by the applicant in the application for the contract, if later. If the
application for the contract is not in good order, the Company will attempt to
get it in good order within five business days. If it is not complete at the end
of this period, the Company will inform the applicant of the reason for the
delay and that the purchase payment will be returned immediately unless the
applicant specifically consents to the Company keeping the Purchase Payments
until the application is complete. Once the application is

7
<PAGE> 117

complete, the net Purchase Payment will be applied within two business days.
Any net Purchase Payment after the first will be applied as of the valuation
next following its receipt in the mail at the Company's Home Office.

The net Purchase Payment will be allocated to the Separate Account in the
proportion specified in the application for the contract or as directed by the
Owner from time to time. The Owner may allocate all or part of each net Purchase
Payment to any Separate Account described in this Prospectus.

NUMBER OF ACCUMULATION UNITS

The number of Accumulation Units to be credited to a contract in each Separate
Account upon payment of a Purchase Payment will be determined by dividing the
Purchase Payment applied to the Separate Account by the current Accumulation
Unit Value of that Separate Account.

ACCUMULATION UNIT VALUE

The dollar value of an Accumulation Unit for each Separate Account was
established at $1.00 at its inception. The value of an Accumulation Unit on any
Valuation Date is determined by multiplying the value on the immediately
preceding Valuation Date by the net investment factor for the Valuation Period
just ended. The value of an Accumulation Unit on any date other than a Valuation
Date will be equal to its value as of the next succeeding Valuation Date. The
value of an Accumulation Unit may increase or decrease.

NET INVESTMENT RATE AND NET INVESTMENT FACTOR

Each Separate Account's net investment rate for any Valuation Period is equal to
the gross investment rate for that Separate Account less a deduction of
0.0000363 for Account QB, and 0.0000398 for Account GIS, for each day in the
Valuation Period. The gross investment rate for the Valuation Period is equal to
(i) the investment income and capital gains and losses, whether realized or
unrealized, on the assets of the Separate Account less a deduction for any
applicable taxes, including income taxes arising from income and realized and
unrealized capital gains of the Separate Account, divided by (ii) the amount of
the assets at the beginning of the Valuation Period.

At the present time, no federal taxes are deducted from the Separate Accounts.
(See "Federal Tax Considerations.") The gross investment rate for a Separate
Account may be either positive or negative.

The net investment factor for a Separate Account for any Valuation Period is the
sum of 1.000000 plus the net investment rate.

CASH VALUE

The Cash Value of the contract on any date will be equal to the sum of the
accumulated values in the Separate Accounts credited to that contract. The
accumulated value in a Separate Account is equal to the number of Accumulation
Units credited to the contract in that Separate Account, multiplied by the
Accumulation Unit Value for that Separate Account.

CASH SURRENDER (REDEMPTION) OR WITHDRAWAL VALUE

Before the due date of the first Annuity Payment, upon receipt of a written
request, the Company will pay all or any portion of the Cash Value, adjusted for
any applicable premium tax, to the Owner. The Company may defer payment of any
Cash Value for a period of not more than seven days after the request is
received in the mail at its Home Office, but it is its intent to pay as soon as
possible.

The amount of the Cash Value received may be more or less than the Purchase
Payments paid depending on the value of the contract at the time of surrender.
(For the federal income tax consequences of surrenders, see "Federal Tax
Considerations.")

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<PAGE> 118

DEATH BENEFIT

If the Annuitant dies before Annuity or Income Payments begin, the Company will
pay to the beneficiary the greater of (a) the Cash Value of the contract as of
the date it receives proof of death at its Home Office, less any premium tax
incurred, or (b) the total Purchase Payments made under the contract, less prior
surrenders or outstanding cash loans.

MINIMUM ACCUMULATED VALUE BENEFIT UPON ELECTION OF AN ANNUITY--ACCOUNT QB

If an Annuity Option is elected after the tenth Contract Year, the amount
applied under an Annuity Option while there is Cash Value which has not been
applied to effect any Annuity or Income Options will not be less than the
following:

1. the sum of all net premiums allocated to Account QB under the contract,
plus

2. the sum of all amounts transferred into Account QB, minus

3. the sum of all amounts transferred out of Account QB, minus

4. any partial surrenders (whether paid in one sum or applied as an Annuity
or Income Option), minus

5. the value of Accumulation Units credited to this contract in Account QB
which are not applied to effect the Annuity.

This benefit is not available on contracts issued in California.

RIGHT TO RETURN

During the ten days following the delivery of the contract to the applicant, the
applicant may return the contract to the Company by mail or in person, if for
any reason the applicant has changed his or her mind. On return of the contract,
the Company will pay to the applicant the Cash Value determined as of the
Valuation Date next following receipt of the written request at the Company's
Home Office (or any other office which the Company may designate) plus an amount
equal to the difference between the Purchase Payment paid for the contract and
the Net Purchase Payment. The applicant bears the investment risk during this
period.

TRANSFER BETWEEN SEPARATE ACCOUNTS

At any time up to 30 days before the due date of the first Annuity Payment, the
Owner may, upon written request to the Company, transfer all or any part of the
Cash Value of the contract from one Separate Account to any other Separate
Account described in this Prospectus. The Company reserves the right to limit
the number of transfers between Separate Accounts, but will not limit transfers
to less than one in any six month period. The number of Accumulation Units
credited to the Separate Account from which the transfer is made will be
reduced. The reduction will be determined by dividing the amount transferred by
the Accumulation Unit Value for that Separate Account as of the next valuation
after the Company receives the request in the mail at its Home Office. The
number of Accumulation Units credited to the Separate Account to which the
transfer is made will be increased. The increase will be determined by dividing
the amount transferred, less the Separate Account transfer charge, if any, by
the Accumulation Unit Value for that Separate Account as of the next valuation
after the Company receives the written request from the Owner at its Home
Office. There is currently no Separate Account transfer charge. Once Annuity
Payments begin, no further transfers may be made between the Separate Accounts.

PAYOUT PROVISIONS

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SEPARATE ACCOUNT ALLOCATION

When Annuity Payments begin, the accumulated value in each Separate Account will
be applied to provide an Annuity with the amount of Annuity Payments varying
with the investment experience of that same Separate Account. As described in
"Transfer Between Separate Accounts," the Owner may elect to transfer Cash Value
from one Separate Account to another in order to reallocate the basis on which
Annuity Payments will be determined.

DETERMINATION OF FIRST PAYMENT

The contract contains tables used to determine the first monthly Annuity
Payment. The amount applied to effect an Annuity will be the Cash Value of the
contract as of 14 days before the date Annuity Payments commence less any
applicable premium taxes not previously deducted.

The amount of the first monthly payment depends on the Annuity Option elected
(see "Automatic Option") and the adjusted age of the Annuitant. A formula for
determining the adjusted age is contained in the contract. The tables are
determined from the Progressive Annuity Table assuming births in the year 1900
and an assumed annual net investment rate of 3.5%. (When permitted by state law,
the Company may allow the contract owner to elect an assumed net investment rate
other than the 3.5% specified in the contract. In that event, the first monthly
payment would differ from that shown in the contract. A higher interest rate
assumption would mean a higher initial payment but more slowly rising subsequent
payments or more rapidly falling subsequent payments. A lower assumption would
have the opposite effect.) The total first monthly Annuity Payment is determined
by multiplying the benefit per $1,000 of value shown in the tables of the
contract by the number of thousands of dollars of value of the contract applied
to that Annuity Option. The Company reserves the right to require proof of age
before Annuity Payments begin.

ANNUITY UNIT VALUE

The dollar value of an Annuity Unit for each Separate Account was established at
$1.00 at inception. The value of an Annuity Unit as of any Valuation Date is
determined 14 days in advance in order to allow adequate time for the required
calculations and mailing of annuity checks in advance of their due dates. (If
the date 14 days in advance is not a Valuation Date, the calculation is made on
the next following Valuation Date, which would generally be 13 or 12 days in
advance.)

Specifically, the Annuity Unit Value for a Separate Account as of a Valuation
Date is equal to (a) the value of the Annuity Unit on the immediately preceding
Valuation Date multiplied by (b) the net investment factor for the Valuation
Period ending on or next following 14 days prior to the current Valuation Date,
divided by (c) the assumed net investment factor for the Valuation Period. (For
example, the assumed net investment factor based on an annual assumed net
investment rate of 3.5% for a Valuation Period of one day is 1.0000942 and, for
a period of two days, is 1.0000942 x 1.0000942.)

The value of an Annuity Unit as of any date other than a Valuation Date is equal
to its value on the next succeeding Valuation Date.

NUMBER OF ANNUITY UNITS

The number of Annuity Units credited to the contract is determined by dividing
the first monthly Annuity Payment attributable to each Separate Account by the
Separate Account's Annuity Unit Value as of the due date of the first Annuity
Payment. The number of Annuity Units remains fixed during the annuity period.

DETERMINATION OF SECOND AND SUBSEQUENT PAYMENTS

The dollar amount of the second and subsequent Annuity Payments is not
predetermined and may change from month to month based on the investment
experience of either or both of the Separate Accounts. The actual amounts of
these payments are determined by multiplying the number of Annuity Units
credited to the contract in each

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<PAGE> 120

Separate Account by the corresponding Annuity Unit Value as of the date on which
payment is due. The interest rate assumed in the annuity tables would produce a
level Annuity Unit Value and, therefore, level Annuity Payments if the net
investment rate remained constant at the assumed rate. In fact, payments will
vary up or down as the net investment rate varies up or down from the assumed
rate, and there can be no assurance that a net investment rate will be as high
as the assumed rate.

ANNUITY OPTIONS

Subject to conditions in "Election of Options," all or any part of the Cash
Value of the contract otherwise payable in one sum to the Owner on the Maturity
Date or prior Cash Surrender of the contract, or amounts payable under the
contract in one sum to the beneficiary upon the death of the Annuitant, may be
paid under one or more of the Annuity Options below.

AUTOMATIC OPTION--Unless otherwise specified in the application or the plan and
if no election has been made, if the Annuitant is then living on the Maturity
Date, the Company will pay to the Owner the first of a series of Annuity
Payments based on the life of the Annuitant, in accordance with Option 2 with
120 monthly payments assured.

OPTION 1--LIFE ANNUITY--NO REFUND: The Company will make monthly Annuity
Payments during the lifetime of the person on whose life the payments are based,
terminating with the last monthly payment preceding death. This option offers
the maximum monthly payment, since there is no assurance of a minimum number of
payments or provision for a death benefit for beneficiaries. It would be
possible under this option to receive only one Annuity Payment if the Annuitant
died before the due date of the second Annuity Payment, only two if the
Annuitant died before the third Annuity Payment, etc.

OPTION 2--LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS ASSURED: The
Company will make monthly Annuity Payments during the lifetime of the person on
whose life payments are based, with the agreement that if, at the death of that
person, payments have been made for less than 120, 180 or 240 months, as
elected, payments will be continued during the remainder of the period to the
beneficiary designated. The beneficiary may instead receive a single sum
settlement equal to the discounted value of the future payments with the
interest rate equivalent to the assumption originally used when the Annuity
began.

OPTION 3--UNIT REFUND LIFE ANNUITY: The Company will make monthly Annuity
Payments during the lifetime of the person on whose life payments are based,
terminating with the last payment due before the death of that person, provided
that, at death, the beneficiary will receive in one sum the current dollar value
of the number of Annuity Units equal to (a) minus (b) (if that difference is
positive) where (a) is the total amount applied under the option divided by the
Annuity Unit Value on the due date of the first Annuity Payment, and (b) is the
product of the number of the Annuity Units represented by each payment and the
number of payments made.

OPTION 4--JOINT AND LAST SURVIVOR LIFE ANNUITY--NO REFUND: The Company will make
monthly Annuity Payments during the joint lifetime of the two persons on whose
lives payments are based, and during the lifetime of the survivor. No further
payments will be made following the death of the survivor. It would be possible
under this option to receive only one Annuity Payment if both Annuitants died
before the due date of the second Annuity Payment, only two if they died before
the third Annuity Payment, etc.

OPTION 5--JOINT AND LAST SURVIVOR LIFE ANNUITY--ANNUITY REDUCES ON DEATH OF
PRIMARY PAYEE: The Company will make monthly Annuity Payments during the
lifetime of the two persons on whose lives payments are based. One of the two
persons will be designated as the primary payee. The other will be designated as
the secondary payee. On the death of the secondary payee, if survived by the
primary payee, the Company will continue to make monthly Annuity Payments to the
primary payee in the same amount that would have been payable during the joint
lifetime of the two persons. On the death of the primary payee, if survived by
the secondary payee, the Company will continue to make Annuity Payments to the
secondary payee, in an amount equal to 50% of the payments which would have been
made during the lifetime of the primary payee. No further payments will be made
following the death of the survivor.

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<PAGE> 121

OPTION 6--OTHER ANNUITY OPTIONS: The Company will make any other arrangements
for Annuity Payments as may be mutually agreed upon.

INCOME OPTIONS

Subject to the conditions described under "Election of Options" below, all or
any part of the Cash Value of the contract otherwise payable in one sum to the
Owner on the Maturity Date or prior Cash Surrender of the contract, or amounts
payable under the contract in one sum to the beneficiary on the death of the
Annuitant, may be paid under one or more of the income options described below.

OPTION 1--PAYMENTS OF A FIXED AMOUNT: The Company will make equal monthly
payments of the amount elected until the Cash Value applied under this option
has been exhausted. The first monthly payment will be paid from each Separate
Account in the same proportion that the respective Cash Values bear to the total
Cash Value applied as of fourteen days before the first payment is due. The
second and subsequent payments from each Separate Account will be the same as
the first payment under this option. The final payment will include any amount
insufficient to make another full payment.

OPTION 2--PAYMENTS FOR A FIXED PERIOD: The Company will make monthly payments
for the number of years selected. The amount of each payment will be equal to
the remaining Cash Value applied under this option divided by the number of
remaining payments.

OPTION 3--INVESTMENT INCOME: The Company will make monthly payments during the
lifetime of the primary payee, or for the period agreed on. The amount payable
will be equal to the excess, if any, of the Cash Value under this option over
the amount applied under this option. No payment will be made if the Cash Value
is less than the amount applied, and it is possible that no payments would be
made for a period of time. Payments under this option are not considered to be
Annuity Payments and are taxable in full as ordinary income. (See "Federal Tax
Considerations.")

The Cash Value used to determine the amount of any Income Payment will be
calculated as of 14 days before the date an Income Payment is due and will be
determined on the same basis as the Cash Value of the contract, including the
deduction for mortality risks. Income Options differ from Annuity Options in
that the amount of the payments made under Income Options are unrelated to the
length of life of any person. Although the Company continues to deduct the
charge for mortality and expense risks, it assumes no mortality risks for
amounts applied under any Income Option. Moreover, except with respect to
lifetime payments of investment income under Income Option 3, payments are
unrelated to the actual life span of any person. Thus, the Annuitant may outlive
the payment period. While Income Options do not directly involve mortality risks
for the Company, an Owner may elect to apply the remaining Cash Value to provide
an Annuity at the guaranteed rates even though Income Payments have been
received under an Income Option. Before an Owner makes any Income Option
election, he or she should consult a tax adviser as to any adverse tax
consequences the election might have.

ELECTION OF OPTIONS

Election of an option must be made in writing in a form satisfactory to the
Company. Any election made during the lifetime of the Annuitant must be made by
the Owner of the contract. The terms of the options elected by some
beneficiaries may be restricted to meet the qualification requirements of
Section 72(s) of the Internal Revenue Code. If, at the death of the Annuitant,
there is no election in effect for that Annuitant, election of an option must be
made by the beneficiary entitled to any death benefit payable in one sum under
the contract. The minimum amount that can be placed under an Annuity or Income
Option will be $2,000 unless the Company consents to a lesser amount. If any
monthly periodic payment due any payee is less than $20, the Company reserves
the right to make payments at less frequent intervals.

FEDERAL TAX CONSIDERATIONS

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<PAGE> 122

GENERAL

The Company is taxed as a life insurance company under Subchapter L of the
Internal Revenue Code (the "Code"). The Separate Accounts that form the
investment alternatives described herein are treated as part of the total
operations of the Company and are not taxed separately. Investment income and
gains of a Separate Account that are credited to a purchaser's contract of
insurance incur no current federal income tax. Generally, amounts credited to a
contract are not taxable until received by the Owner, participant or
beneficiary, either in the form of Annuity Payments or other distributions.

NONQUALIFIED ANNUITIES

Individuals may purchase tax-deferred annuities without tax law funding limits.
The Purchase Payments receive no tax benefit, deduction or deferral, but
increases in the value of the contract are generally deferred from tax until
distribution. If a nonqualified annuity is owned by other than an individual,
however, (e.g., by a corporation), the increases in value attributable to
Purchase Payments made after February 28, 1986 are includable in income
annually. Furthermore, for contracts issued after April 22, 1987, all deferred
increases in value will be includable in the income of an Owner when that Owner
transfers the contract without adequate consideration.

The federal tax law requires nonqualified annuity contracts issued on or after
January 19, 1985 to meet minimum mandatory distribution requirements upon the
death of the Contract Owner. Failure to meet these requirements will cause the
succeeding Contract Owner or beneficiary to lose the tax benefits associated
with annuity contracts, i.e., primarily the tax deferral prior to distribution.
The distribution required depends upon whether an Annuity Option is elected or
whether the succeeding Owner is the surviving spouse. Contracts will be
administered by the Company in accordance with these rules.

If two or more nonqualified annuity contracts are purchased from the same
insurer within the same calendar year, distributions from any of them will be
taxed based upon the amount of income in all of the same calendar year series of
annuities. This will generally have the effect of causing taxes to be paid
sooner on the deferred gain in the contracts.

Those receiving partial distributions made before annuitization of a contract
will generally be taxed on an income-first basis to the extent of income in the
contract. Certain pre-August 14, 1982 deposits into a nonqualified annuity
contract that have been placed in the contract by means of a tax-deferred
exchange under Section 1035 of the Code may be withdrawn first without income
tax liability. This information on deposits must be provided to the Company by
the other insurance company at the time of the exchange. There is income in the
contract generally to the extent the Cash Value exceeds the investment in the
contract. The investment in the contract is equal to the amount of premiums paid
less any amount received previously which was excludable from gross income. Any
direct or indirect borrowing against the value of the contract or pledging of
the contract as security for a loan will be treated as a cash withdrawal under
the tax law.

With certain exceptions, the law will impose an additional tax if a Contract
Owner makes a withdrawal of any amount under the contract which is allocable to
an investment made after August 13, 1982. The amount of the additional tax will
be 10% of the amount includable in income by the Contract Owner because of the
withdrawal. The additional tax will not be imposed if the amount is received on
or after the Contract Owner reaches the age of 59 1/2, or if the amount is one
of a series of substantially equal periodic payments made for life or life
expectancy of the taxpayer. The additional tax will not be imposed if the
withdrawal or partial surrender follows the death or disability of the Contract
Owner.

FEDERAL INCOME TAX WITHHOLDING

The portion of a distribution which is taxable income to the recipient will be
subject to federal income tax withholding, generally pursuant to Section 3405 of
the Code. The application of this provision is summarized below.

1. NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS)

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<PAGE> 123

The portion of a non-periodic distribution which constitutes taxable
income will be subject to federal income tax withholding, to the extent
such aggregate distributions exceed $200 for the year, unless the
recipient elects not to have taxes withheld. If an election out is not
provided, 10% of the taxable distribution will be withheld as federal
income tax. Election forms will be provided at the time distributions are
requested. This form of withholding applies to all annuity programs.

2. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN
ONE YEAR)

The portion of a periodic distribution which constitutes taxable income
will be subject to federal income tax withholding under the wage
withholding tables as if the recipient were married claiming three
exemptions. A recipient may elect not to have income taxes withheld or
have income taxes withheld at a different rate by providing a completed
election form. Election forms will be provided at the time distributions
are requested. This form of withholding applies to all annuity programs.
As of January 1, 1999, a recipient receiving periodic payments (e.g.,
monthly or annual payments under an Annuity Option) which total $14,850 or
less per year, will generally be exempt from the withholding requirements.

Recipients who elect not to have withholding made are liable for payment of
federal income tax on the taxable portion of the distribution. All recipients
may also be subject to penalties under the estimated tax payment rules if
withholding and estimated tax payments are not sufficient.

Recipients who do not provide a social security number or other taxpayer
identification number will not be permitted to elect out of withholding.
Additionally, United States citizens residing outside of the country, or U.S.
legal residents temporarily residing outside the country, are not permitted to
elect out of withholding.

TAX ADVICE

Because of the complexity of the law and the fact that the tax results will vary
according to the factual status of the individual involved, tax advice may be
needed by a person contemplating purchase of an annuity contract and by an
Owner, participant or beneficiary who may make elections under a contract. It
should be understood that the foregoing description of the federal income tax
consequences under these contracts is not exhaustive and that special rules are
provided with respect to situations not discussed here. It should be understood
that if a tax-benefited plan loses its exempt status, employees could lose some
of the tax benefits described. For further information, a qualified tax adviser
should be consulted.

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DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS

The Company intends to sell the Contracts in all jurisdictions
where it is licensed to do business and where the Contract is approved. Any
sales representative or employee who sells the Contracts will be qualified to
sell variable annuities under applicable federal and state laws. Each
broker-dealer is registered with the SEC under the Securities Exchange Act of
1934, and all are members of the NASD. The principal underwriter and distributor
of the Contracts is CFBDS, Inc., 21 Milk St., Boston, MA. CFBDS, Inc. is not
affiliated with the Company or the Separate Account. However, it is currently
anticipated that Travelers Distribution LLC, an affiliated broker-dealer may
become the principal underwriter for the Contract during the year 2000.

Up-front compensation paid to sales representatives will not
exceed 7.00% of the purchase payments made under the Contracts. If asset-based
compensation is paid, it will not exceed 2% of the average account value
annually. From time to time, the Company may pay or permit other promotional
incentives, in cash, credit or other compensation.

STATE REGULATION

The Company is subject to the laws of the state of Connecticut governing
insurance companies and to regulation by the Insurance Commissioner of the state
of Connecticut. An annual statement in a prescribed form must be filed with that
Commissioner on or before March 1 in each year covering the operations of the
Company for the preceding year and its financial condition on December 31 of
such year. Its books and assets are subject to review or examination by the
Commissioner or his agents at all times, and a full examination of its
operations is conducted by the National Association of Insurance Commissioners
("NAIC") at least once in every four years.

In addition, the Company is subject to the insurance laws and regulations of the
other states in which it is licensed to operate. Generally, the insurance
departments of the states apply the laws of the jurisdiction of domicile in
determining the field of permissible investments.

LEGAL PROCEEDINGS AND OPINIONS

Legal matters in connection with the federal laws and regulations affecting the
issue and sale of the contract described in this prospectus, as well as the
organization of the Companies, their authority to issue variable annuity
contracts under Connecticut law and the validity of the forms of the variable
annuity contracts under Connecticut law, have been passed on by the General
Counsel of the Companies.

There are no pending legal proceedings affecting the Separate Account. There is
one material pending legal proceeding, other than ordinary routine litigation
incidental to business, to which the Company is a party. In March 1997, a
purported class action entitled Patterman v. The Travelers, Inc. et al, was
commenced in the Superior Court of Richmond County, Georgia, alleging, among
other things, violation of the Georgia RICO statute and other state laws by an
affiliate of the Company, Primerica Financial Services, Inc. and certain of its
affiliates. Plaintiffs seek unspecified compensatory and punitive damages and
other relief. In October 1997, defendants answered the complaint, denied
liability and asserted numerous affirmative defenses. In February 1998, the
Superior Court of Richmond County transferred the lawsuit to the Superior Court
of Gwinnett County, Georgia. The plaintiffs appealed the transfer order, and in
December 1998 the Court of Appeals of the State of Georgia reversed the lower
court's decision. Later in December 1998, defendants petitioned the Georgia
Supreme Court to hear an appeal from the decision of the Court of Appeals, which
was granted in May 1999. In September 1999, the Georgia Supreme Court heard oral
argument on defendant's petition for an order reversing the Georgia Court of
Appeals and transferring the lawsuit from the Superior Court of Richmond County
to the Superior Court of Gwinnett County. The George Supreme Court reversed its
decision, and has not yet issued its opinion. Pending appeal, proceedings in the
trial court have been stayed. Defendants intend to vigorously contest the
litigation.

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APPENDIX A

CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION

The SAI contains more specific information relating to the Separate Accounts and
financial statements of The Travelers Insurance Company. A list of the contents
of the SAI is set forth below:

Description of The Travelers and the Separate Accounts
The Insurance Company
The Separate Accounts
Investment Objectives and Policies
The Travelers Growth and Income Stock Account for Variable
Annuities
The Travelers Quality Bond Account for Variable Annuities
Description of Certain Types of Investments and Investment Techniques Available
to the Separate Accounts
Writing Covered Call Options
Buying Put and Call Options
Futures Contracts
Money Market Instruments
Investment Management and Advisory Services
Advisory and Subadvisory Fees
TAMIC
TIMCO
Valuation of Assets
The Board of Managers
Administrative Services
Securities Custodian
Independent Accountants
Financial Statements

- --------------------------------------------------------------------------
COPIES OF THE SAI DATED MAY 1, 2000 (FORM NO. L11895S), ARE AVAILABLE WITHOUT
CHARGE. TO REQUEST A COPY, PLEASE CLIP THIS COUPON ON THE DOTTED LINE ABOVE,
ENTER YOUR NAME AND ADDRESS IN THE SPACES PROVIDED BELOW, AND MAIL TO: THE
TRAVELERS INSURANCE COMPANY, ANNUITY SERVICES, ONE TOWER SQUARE, HARTFORD,
CONNECTICUT 06183-5030.

Name:
----------------------------------------------------------------------
Address:
-------------------------------------------------------------------

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

16
<PAGE> 126

THIS PAGE INTENTIONALLY LEFT BLANK.

17
<PAGE> 127

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT
FOR VARIABLE ANNUITIES

AND

THE TRAVELERS QUALITY BOND ACCOUNT
FOR VARIABLE ANNUITIES

INDIVIDUAL VARIABLE ANNUITY CONTRACTS

Issued By

THE TRAVELERS INSURANCE COMPANY

Individual Purchases

L-11895 TIC Ed. 5-2000
Printed in U.S.A.

<PAGE> 128

PART B

INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION

<PAGE> 129
UNIVERSAL ANNUITY

STATEMENT OF ADDITIONAL INFORMATION: MAY 1, 2000

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

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
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED BOND ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS FUND U FOR VARIABLE ANNUITIES

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

VARIABLE ANNUITY CONTRACTS
ISSUED BY
THE TRAVELERS INSURANCE COMPANY

This Statement of Additional Information is not a prospectus but relates
to, and should be read in conjunction with, the Prospectus dated May 1, 2000. A
copy of the Prospectus may be obtained by writing to The Travelers Insurance
Company (the "Company"), Annuity Services, One Tower Square, Hartford,
Connecticut 06183-5030, by calling 1-800-842-9368 or by accessing the Securities
and Exchange Commission's website at http://www.sec.gov.

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Description Of The Travelers Insurance Company And The Separate Accounts. . . . . . . . . . . . . . . . . . . . . 3
The Insurance Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Separate Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Mixed and Shared Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Investment Objectives, Policies And Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

Description Of Certain Types Of Investments And Investment Techniques
Available To The Separate Accounts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

Investment Restrictions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
The Travelers Growth and Income Stock Account for Variable Annuities . . . . . . . . . . . . . . . . . . . . . 19
The Travelers Timed Growth and Income Stock Account for Variable Annuities . . . . . . . . . . . . . . . . . . 19
The Travelers Timed Aggressive Stock Account for Variable Annuities. . . . . . . . . . . . . . . . . . . . . . 20
The Travelers Quality Bond Account for Variable Annuities. . . . . . . . . . . . . . . . . . . . . . . . . . . 22
The Travelers Timed Bond Account for Variable Annuities. . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
The Travelers Money Market Account for Variable Annuities. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
The Travelers Timed Short-Term Bond Account for Variable Annuities . . . . . . . . . . . . . . . . . . . . . . 25

Investment Management And Advisory Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Advisory Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
TIMCO. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
TAMIC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
</TABLE>

1
<PAGE> 130

<TABLE>
<CAPTION>
PAGE
<S> <C>
Valuation Of Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Net Investment Factor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Federal Tax Considerations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Performance Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
The Board Of Managers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
Principal Underwriter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Distribution and Principal Underwriting Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Securities Custodian. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Independent Accountants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
</TABLE>

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<PAGE> 131

DESCRIPTION OF THE TRAVELERS INSURANCE COMPANY
AND THE SEPARATE ACCOUNTS

THE INSURANCE COMPANY

The Travelers Insurance Company (the "Company") is a stock insurance
company chartered in 1864 in Connecticut and continuously engaged in the
insurance business since that time. The Company is licensed to conduct life
insurance business in all states of the United States, the District of Columbia,
Puerto Rico, Guam, the U.S. and British Virgin Islands and the Bahamas. The
Company's Home Office is located at One Tower Square, Hartford, Connecticut
06183 and its telephone number is (860) 2770-0111.

The Company is indirectly owned by a wholly owned subsidiary of
Citigroup Inc. Citigroup Inc. consists of businesses that produce a broad range
of financial services, including asset management, banking and consumer finance,
credit and charge cards, insurance, investments, investment banking and trading.
Among its businesses are Citibank, CitiFinancial, Primerica Financial Services,
Salomon Smith Barney, Salomon Smith Barney Asset Management, and Travelers
Property Casualty.

STATE REGULATION. The Company is subject to the laws of the state of Connecticut
governing insurance companies and to regulation by the Insurance Commissioner of
the state of Connecticut (the "Commissioner"). An annual statement covering the
operations of the Company for the preceding year, as well as its financial
conditions as of December 31 of such year, must be filed with the Commissioner
in a prescribed format on or before March 1 of each year. The Company's books
and assets are subject to review or examination by the Commissioner or his
agents at all times, and a full examination of its operations is conducted at
least once every four years.

The Company is also subject to the insurance laws and regulations of all
other states in which it is licensed to operate. However, the insurance
departments of each of these states generally apply the laws of the home state
(jurisdiction of domicile) in determining the field of permissible investments.

THE SEPARATE ACCOUNTS

Each of the Separate Accounts available under the variable annuity
contracts described in this Statement of Additional Information meets the
definition of a separate account under federal securities laws, and will comply
with the provisions of the Investment Company Act of 1940, as amended (the "1940
Act"). Additionally, the operations of each of the Separate Accounts are subject
to the provisions of Section 38a-433 of the Connecticut General Statutes which
authorize the Connecticut Insurance Commissioner to adopt regulations under it.
The Section contains no restrictions on investments of the Separate Accounts,
and the Commissioner has adopted no regulations under the Section that affect
the Separate Accounts.

MIXED AND SHARED FUNDING

Certain variable annuity separate accounts and variable life insurance
separate accounts may invest in the Funding Options simultaneously (called
"mixed" and "shared" funding). It is conceivable that in the future it may be
disadvantageous to do so. Although the Company and the Funding Options do not
currently foresee any such disadvantages either to variable annuity contract
owners or variable life policy owners, each Funding Option's Board of Directors
intends to monitor events in order to identify any material conflicts between
them and to determine what action, if any, should be taken. If a Board of
Directors was to conclude that separate funds should be established for variable
life and variable annuity separate accounts, the variable annuity contract
owners would not bear any of the related expenses, but variable annuity contract
owners and variable life insurance policy owners would no longer have the
economies of scale resulting from a larger combined fund.

INVESTMENT OBJECTIVES, POLICIES AND RISKS

Each Account's investment objective and, unless noted as fundamental,
its investment policies may be changed without approval of shareholders or
holders of variable annuity and variable life insurance contracts. A change in
an Account's investment objective or policies may result in the Account having a
different investment objective from those that an owner selected as appropriate
at the time of investment.

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<PAGE> 132

Listed below for quick reference are the types of investments that each
Account may make and its investment techniques. Any investments, policies and
restrictions generally are considered at the time of purchase; the sale of
instruments is not required in the event of a subsequent change in
circumstances. More detailed information about the Accounts' investments and
investment techniques follows the chart.

<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
INVESTMENT TECHNIQUE GIS QB MM TGIS TSB TAS TB
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Affiliated Bank Transactions
- -----------------------------------------------------------------------------------------------
American Depositary Receipts X X X X
- -----------------------------------------------------------------------------------------------
Asset-Backed Mortgage Securities X X X X X
- -----------------------------------------------------------------------------------------------
Bankers' Acceptances X X X X X X X
- -----------------------------------------------------------------------------------------------
Buying Put and Call Options X X X X
- -----------------------------------------------------------------------------------------------
Certificates of Deposit X X X X X X X
- -----------------------------------------------------------------------------------------------
Commercial Paper X X X X X X X
- -----------------------------------------------------------------------------------------------
Convertible Securities X X X X X
- -----------------------------------------------------------------------------------------------
Corporate Asset-Backed Securities X X X X X X
- -----------------------------------------------------------------------------------------------
Debt Securities X X X X X X X
- -----------------------------------------------------------------------------------------------
Emerging Market Securities
- -----------------------------------------------------------------------------------------------
Equity Securities X X X X
- -----------------------------------------------------------------------------------------------
Floating & Variable Rate Instruments X X X X X X X
- -----------------------------------------------------------------------------------------------
Foreign Securities X X X X X
- -----------------------------------------------------------------------------------------------
Forward Contracts on Foreign
Currency
- -----------------------------------------------------------------------------------------------
Futures Contracts X X X X X
- -----------------------------------------------------------------------------------------------
Illiquid Securities X X X X X X X
- -----------------------------------------------------------------------------------------------
Indexed Securities X X X
- -----------------------------------------------------------------------------------------------
Index Futures Contracts X X X X X
- -----------------------------------------------------------------------------------------------
Investment Company Securities
- -----------------------------------------------------------------------------------------------
Investment in Unseasoned Companies X X X X
- -----------------------------------------------------------------------------------------------
Lending Portfolio Securities
- -----------------------------------------------------------------------------------------------
Letters of Credit X X X X X
- -----------------------------------------------------------------------------------------------
Loan Participations
- -----------------------------------------------------------------------------------------------
Money Market Instrumentss X X X X X X X
- -----------------------------------------------------------------------------------------------
Options on Foreign Currencies
- -----------------------------------------------------------------------------------------------
Options on Index Futures Contracts X X X X X X
- -----------------------------------------------------------------------------------------------
Options on Stock Indices X X
- -----------------------------------------------------------------------------------------------
Other Direct Indebtedness X X X
- -----------------------------------------------------------------------------------------------
Real Estate-Related Instruments X X X X X
- -----------------------------------------------------------------------------------------------
Repurchase Agreements X X X X X X X
- -----------------------------------------------------------------------------------------------
Reverse Repurchase Agreements X X X X X
- -----------------------------------------------------------------------------------------------
Short Sales "Against the Box"
- -----------------------------------------------------------------------------------------------
Short-Term Money Market Instruments X X X X X X X
- -----------------------------------------------------------------------------------------------
Swap Agreements
- -----------------------------------------------------------------------------------------------
Temporary Bank Borrowing X X X X X X X
- -----------------------------------------------------------------------------------------------
U.S. Government Securities X X X X X X X
- -----------------------------------------------------------------------------------------------
Variable Amount Master Demand Notes X X X X X X X
- -----------------------------------------------------------------------------------------------
When-Issued & Delayed Delivery
Securities X X X X X
- -----------------------------------------------------------------------------------------------
Writing Covered Call Options X X X X
- -----------------------------------------------------------------------------------------------
</TABLE>

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<PAGE> 133

DESCRIPTION OF CERTAIN TYPES OF INVESTMENTS AND INVESTMENT
TECHNIQUES AVAILABLE TO THE SEPARATE ACCOUNTS

WRITING COVERED CALL OPTIONS: The Accounts will write only "covered" call
options, that is, they will own the underlying securities which are acceptable
for escrow when they write the call option and until the obligation to sell the
underlying security is extinguished by exercise or expiration of the call
option, or until a call option covering the same underlying security and having
the same exercise price and expiration date is purchased. These call options
generally will be short-term contracts with a duration of nine months or less.
The Accounts will receive a premium for writing a call option, but give up,
until the expiration date, the opportunity to profit from an increase in the
underlying security's price above the exercise price. The Accounts will retain
the risk of loss from a decrease in the price of the underlying security.
Writing covered call options is a conservative investment technique which is
believed to involve relatively little risk, but which is capable of enhancing an
Account's total returns.

The premium received for writing a covered call option will be recorded as a
liability in each Account's Statement of Assets and Liabilities. This liability
will be adjusted daily to the option's current market value, which will be the
latest sale price at the close of the New York Stock Exchange, or, in the
absence of such sale, at the latest bid quotation. The liability will be
extinguished upon expiration of the option, the purchase of an identical option
in a closing transaction, or delivery of the underlying security upon exercise
of the option.

The Options Clearing Corporation is the issuer of, and the obligor on, the
covered call options written by the Accounts. In order to secure an obligation
to deliver to the Options Clearing Corporation the underlying security of a
covered call option, the Accounts will be required to make escrow arrangements.

In instances where the Accounts believe it is appropriate to close a covered
call option, they can close out the previously written call option by purchasing
a call option on the same underlying security with the same exercise price and
expiration date. The Accounts may also, under certain circumstances, be able to
transfer a previously written call option.

A previously written call option can be closed out by purchasing an identical
call option only on a national securities exchange which provides a secondary
market in the call option. There is no assurance that a liquid secondary market
will exist for a particular call option at such time. If the Accounts cannot
effect a closing transaction, they will not be able to sell the underlying
security while the previously written option remains outstanding, even though it
might otherwise be advantageous to do so.

If a substantial number of the call options are exercised, the Accounts' rates
of portfolio turnover may exceed historical levels. This would result in higher
brokerage commissions in connection with the writing of covered call options and
the purchase of call options to close out previously written options. Such
brokerage commissions are normally higher than those applicable to purchases and
sales of portfolio securities.

BUYING PUT AND CALL OPTIONS: The Accounts may purchase call options on specific
securities, or on futures contracts whose price volatility is expected to
closely match that of securities, eligible for purchase by the Accounts, in
anticipation of or as a substitute for the purchase of the securities
themselves. These options may be listed on a national exchange or executed
"over-the-counter" with a broker-dealer as the counterparty. While the
investment advisers anticipate that the majority of option purchases and sales
will be executed on a national exchange, put or call options on specific
securities or for non-standard terms are likely to be executed directly with a
broker-dealer when it is advantageous to do so. Option contracts will be
short-term in nature, generally less than nine months.

The Accounts will pay a premium in exchange for the right to purchase (call) or
sell (put) a specific number of shares of an equity security or futures contract
at a specified price (the strike price) on or before the expiration date of the
options contract. In either case, each Account's risk is limited to the option
premium paid.

The Accounts may sell the put and call options prior to their expiration and
realize a gain or loss thereby. A call option will expire worthless if the price
of the related security is below the contract strike price at the time of
expiration; a put option will expire worthless if the price of the related
security is above the contract strike price at the time of expiration.

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<PAGE> 134

put option obligation will be similarly identified and segregated. In the case
of put options on futures contracts, portfolio securities whose price volatility
is expected to match that of the underlying futures contract will be identified
and segregated.

MONEY MARKET INSTRUMENTS: Money market securities are instruments with remaining
maturities of one year or less, such as bank certificates of deposit, bankers'
acceptances, commercial paper (including master demand notes), and obligations
issued or guaranteed by the United States Government, its agencies or
instrumentalities, some of which may be subject to repurchase agreements.

SHORT-TERM MONEY MARKET INSTRUMENTS. The Accounts, may at any time invest funds
awaiting investment or held as reserves for the purposes of satisfying
redemption requests, payment of dividends or making other distributions to
shareholders, in cash and short-term money market instruments. Short-term money
market instruments may include (i) short-term U.S. Government Securities and,
short-term obligations of foreign sovereign governments and their agencies and
instrumentalities, (ii) interest bearing savings deposits on, and certificates
of deposit and bankers' acceptances of, United States and foreign banks, (iii)
commercial paper of U.S. or of foreign issuers rated A-1 or higher by S&P or
Prime-1 by Moody's, issued by companies which have an outstanding debt issue
rated AA or higher by S&P or Aa or higher by Moody's or, if not rated,
determined by the Investment Subadviser to be of comparable quality to those
rated obligations which may be purchased by the Accounts.

CERTIFICATES OF DEPOSIT: Certificates of deposit are receipts issued by a bank
in exchange for the deposit of funds. The issuer agrees to pay the amount
deposited plus interest to the bearer of the receipt on the date specified on
the certificate. The certificate usually can be traded in the secondary market
prior to maturity.

Certificates of deposit will be limited to U.S. dollar-denominated certificates
of United States banks which have at least $1 billion in deposits as of the date
of their most recently published financial statements (including foreign
branches of U.S. banks, U.S. branches of foreign banks which are members of the
Federal Reserve System or the Federal Deposit Insurance Corporation).

The Accounts will not acquire time deposits or obligations issued by the
International Bank for Reconstruction and Development, the Asian Development
Bank or the Inter-American Development Bank. Additionally, the Accounts do not
currently intend to purchase such foreign securities (except to the extent that
certificates of deposit of foreign branches of U.S. banks may be deemed foreign
securities) or purchase certificates of deposit, bankers' acceptances or other
similar obligations issued by foreign banks. Additionally, Account TSB invests
in Euro Certificates of Deposit issued by banks outside of the United States,
with interest and principal paid in U.S. dollars.

BANKERS' ACCEPTANCES: Bankers' acceptances typically arise from short-term
credit arrangements designed to enable businesses to obtain funds to finance
commercial transactions. Generally, an acceptance is a time draft drawn on a
bank by an exporter or an importer to obtain a stated amount of funds to pay for
specific merchandise. The draft is then "accepted" by the bank which, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an
earning asset or it may be sold in the secondary market at the going rate of
discount for a specific maturity. Although maturities for acceptances can be as
long as 270 days, most acceptances have maturities of six months or less.
Bankers' acceptances acquired by Accounts MM or TSB must have been accepted by
U.S. commercial banks, including foreign branches of U.S. commercial banks,
having total deposits at the time of purchase in excess of $1 billion, and must
be payable in U.S. dollars.

UNITED STATES GOVERNMENT SECURITIES: Securities issued or guaranteed by the
United States Government include a variety of Treasury securities that differ
only in their interest rates, maturities and dates of issuance. Treasury Bills
have maturities of one year or less, Treasury Notes have maturities of one to
ten years, and Treasury Bonds generally have maturities of greater than ten
years at the date of issuance.

Securities issued or guaranteed by the United States Government or its agencies
or instrumentalities include direct obligations of the United States Treasury
and securities issued or guaranteed by the Federal Housing Administration,
Farmers Home Administration, Export-Import Bank of the United States, Small
Business Administration, Government National Mortgage Association, General
Services Administration, Central Bank for Cooperatives, Federal Home Loan Banks,
Federal Loan Mortgage Corporation, Federal Intermediate Credit Banks, Federal
Land Banks, Maritime Administration, The Tennessee Valley Authority, District of
Columbia Armory Board and Federal National Mortgage Association.

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<PAGE> 135

Some obligations of United States Government agencies and instrumentalities,
such as Treasury Bills and Government National Mortgage Association pass-through
certificates, are supported by the full faith and credit of the United States;
others, such as securities of Federal Home Loan Banks, are supported by the
right of the issuer to borrow from the Treasury; still others, such as bonds
issued by the Federal National Mortgage Association, a private corporation, are
supported only by the credit of the instrumentality. Because the United States
Government is not obligated by law to provide support to an instrumentality it
sponsors, the Accounts will invest in the securities issued by such an
instrumentality only when the investment advisers determine that the credit risk
with respect to the instrumentality does not make the securities unsuitable
investments. United States Government securities will not include international
agencies or instrumentalities in which the United States Government, its
agencies or instrumentalities participate, such as the World Bank, the Asian
Development Bank or the Inter-American Development Bank, or issues insured by
the Federal Deposit Insurance Corporation.

REPURCHASE AGREEMENTS: Interim cash balances may be invested from time to time
in repurchase agreements with approved counterparties. Approved counterparties
are limited to national banks or reporting broker-dealers meeting the Advisor's
credit quality standards as presenting minimal risk of default. All repurchase
transactions must be collateralized by U.S. Government securities with market
value no less than 102% of the amount of the transaction, including accrued
interest. Repurchase transactions generally mature the next business day but, in
the event of a transaction of longer maturity, collateral will be marked to
market daily and, when required, additional cash or qualifying collateral will
be required from the counterparty.

In executing a repurchase agreement, a portfolio purchases eligible securities
subject to the seller's simultaneous agreement to repurchase them on a mutually
agreed upon date and at a mutually agreed upon price. The purchase and resale
prices are negotiated with the counterparty on the basis of current short-term
interest rates, which may be more or less than the rate on the securities
collateralizing the transaction. Physical delivery or, in the case of
"book-entry" securities, segregation in the counterparty's account at the
Federal Reserve for the benefit of the Account is required to establish a
perfected claim to the collateral for the term of the agreement in the event the
counterparty fails to fulfill its obligation.

As the securities collateralizing a repurchase transaction are generally of
longer maturity than the term of the transaction, in the event of default by the
counterparty on its obligation, the Account would bear the risks of delay,
adverse market fluctuation and transaction costs in disposing of the collateral.

WHEN-ISSUED SECURITIES. Certain Accounts may, from time to time, purchase
new-issue government or agency securities on a "when-issued,"
"delayed-delivery," or "to-be-announced" basis ("when-issued securities"). The
prices of such securities are fixed at the time the commitment to purchase is
made and may be expressed in either dollar-price or yield- maintenance terms.
Delivery and payment may be at a future date beyond customary settlement time.
It is the Accounts' customary practice to make when-issued purchases for
settlement no more than 90 days beyond the commitment date.

The commitment to purchase a when-issued security may be viewed as a senior
security, which is marked to market and reflected in the Account's net asset
value daily from the commitment date. While the adviser or subadviser intends
for the Account to take physical delivery of these securities, offsetting
transactions may be made prior to settlement, if it is advantageous to do so. An
Account does not make payment or begin to accrue interest on these securities
until settlement date. To invest its assets pending settlement, an Account
normally invests in short-term money market instruments and other securities
maturing no later than the scheduled settlement date.

The Accounts do not intend to purchase when-issued securities for speculative or
"leverage" purposes. Consistent with Section 18 of the 1940 Act and the position
of the SEC thereunder, when an Account commits to purchase a security on a
when-issued basis, the adviser or subadviser identifies and places in a
segregated account high-grade money market instruments and other liquid
securities equal in value to the purchase cost of the when-issued securities.

The adviser and subadvisers believe that purchasing securities in this manner
will be advantageous to the Accounts. However, this practice entails certain
additional risks, namely the default of the counterparty on its obligations to
deliver the security as scheduled. In this event, an Account would experience a
gain or loss equal to the appreciation or depreciation in value from the
commitment date. The adviser and subadvisers employ a rigorous credit quality
procedure in determining the counterparties to deal with in purchasing
when-issued securities and, in some

7
<PAGE> 136

circumstances, require the counterparty to post cash or some other form of
security as margin to protect the value of the delivery obligation pending
settlement.

FLOATING AND VARIABLE RATE INSTRUMENTS: Obligations that have a floating or
variable rate of interest bear interest at rates that are not fixed, but vary
with changes in specified market rates or indices, such as the prime rate, and
at specified intervals. Certain of these obligations may carry a demand feature
that would permit the holder to tender them back to the issuer at par value
prior to maturity. Each Account limits its purchases of floating and variable
rate obligations to those of the same quality as it otherwise is allowed to
purchase. The advisers or subadvisers monitor on an ongoing basis the ability of
an issuer of a demand instrument to pay principal and interest on demand. Each
Accounts' right to obtain payment at par on a demand instrument can be affected
by events occurring between the date the Accounts elect to demand payment and
the date payment is due. Those events may affect the ability of the issuer of
the instrument to make payment when due, except when such demand instruments
permit same-day settlement. To facilitate settlement, these same-day demand
instruments may be held in book entry form at a bank other than the Accounts'
custodian, subject to a subcustodian agreement approved by the Accounto between
that bank and the Accounts' custodian.

The floating and variable rate obligations that the Accounts may purchase
include certificates of participation in obligations purchased from banks. A
certificate of participation gives an Account an undivided interest in the
underlying obligations in the proportion that the Account's interest bears to
the total principal amount of such obligations. Certain of such certificates of
participation may carry a demand feature that would permit the holder to tender
them back to the issuer prior to maturity.

VARIABLE AMOUNT MASTER DEMAND NOTES: Variable amount master demand notes are
unsecured obligations that permit the investment of fluctuating amounts by an
Account at varying rates of interest pursuant to direct arrangements between the
Account as lender and the issuer as borrower. Master demand notes permit daily
fluctuations in the interest rate and daily changes in the amounts borrowed.
Each Account has the right to increase the amount under the note at any time up
to the full amount provided by the note agreement, or to decrease the amount,
and the borrower may repay up to the full amount of the note without penalty.
Because these types of notes are direct lending arrangements between the lender
and the borrower, it is not generally contemplated that such instruments will be
traded. Also, there is no secondary market for these notes, although they are
redeemable and thus repayable by the borrower at face value plus accrued
interest at any time. Accordingly, an Account's right to redeem is dependent on
the ability of the borrower to pay principal and interest on demand. In
connection with master demand note arrangements, the advisers or subadvisers
will consider the earning power, cash flow and other liquidity ratios of the
issuer. These notes, as such, are not typically rated by credit rating agencies.
Unless they are so rated, each Account will invest in them only if, at the time
of an investment, the issuer meets the criteria set forth for all other
commercial paper. Pursuant to procedures established by the adviser or
subadviser, such notes are treated as instruments maturing in one day and valued
at their par value. The advisers and subadvisers intend to continuously monitor
factors related to the ability of the borrower to pay principal and interest on
demand.

VARIABLE RATE MASTER DEMAND NOTES. Variable rate master demand notes are
unsecured obligations that permit a Fund to invest different amounts at varying
interest rates under arrangements between the Account (as lender) and the issuer
of the note (as borrower). Under the note, an Account has the right at any time
to increase the amount up to the full amount provided by the note agreement, or
to decrease the amount, and the borrower has the right to repay at any time up
to the full amount of the note without penalty. Notes purchased by an Account
permit it to demand payment of principal and accrued interest at any time (on
not more than seven days notice). Notes acquired by an Account may have
maturities of more than one year, provided that: (1) the Account is entitled to
payment of principal and accrued interest upon not more than seven days notice,
and (2) the interest rate on such notes is adjusted automatically at periodic
intervals, which normally do not exceed 31 days but may extend up to one year.
The notes are deemed to have a maturity equal to the longer of the period
remaining to the next interest-rate adjustment or the demand notice period.
Because these notes are direct lending arrangements between the lender and the
borrower, the notes normally are not traded and have no secondary market,
although the notes are redeemable and, thus, repayable at any time by the
borrower at face value plus accrued interest. Accordingly, an Account's right to
redeem depends on the borrower's ability to pay interest on demand and repay
principal. In connection with variable rate master demand notes, an adviser or
subadviser considers, under standards established by the Board, earning power,
cash flow and other liquidity ratios of a borrower and monitors the ability of a
borrower to pay principal and interest on demand. These notes are not typically
rated by credit rating agencies. Unless rated, an Account will invest in them
only if the investment adviser determines that the issuer meets the criteria
established for commercial paper.

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<PAGE> 137

ZERO COUPON BONDS AND STEP-UP BONDS. Zero coupon bonds do not pay interest. They
are sold at a substantial discount from face value. Additionally, zero coupon
bonds give the issuer the flexibility of reduced cash interest expense for
several years, and they give the purchaser the potential advantage of
compounding the coupons at a higher rate than might otherwise be available.

Zero coupon bonds are very risky, however, for the investor. Because the cash
flows from zero coupon bonds are deferred and because zero coupon bonds often
represent subordinated debt, their prices are more volatile than most other
bonds.

Step-up bonds are a variant of zero coupon bonds. Step-up bonds pay little or no
initial interest rate for several years and then a higher rate until maturity.
They are also issued at a discount from face value.

For tax purposes, a purchaser of zero coupon bonds owes income tax on the
interest that has accrued each year, even though the Account has received no
cash. Certain federal tax law income and capital-gain distribution requirements
may have an adverse effect on an Account to the extent it invests in zero coupon
bonds.

PAY-IN-KIND BONDS. Pay-in-kind bonds pay interest either in cash or in
additional securities at the issuer's option for a specified period. Like zero
coupon bonds, PIK bonds are designed to give the issuer flexibility in managing
cash flow. Unlike zero coupon bonds, however, PIK bonds offer the investor the
opportunity to sell the additional securities issued in lieu of interest and
thus obtain current income on the original investment. Certain federal tax law
income and capital gain distribution requirements may have an adverse effect on
an Account to the extent that it invests in PIK bonds.

RESET BONDS. The interest rate on reset bonds is adjusted periodically to a
level that should allow the bonds to trade at a specified dollar level,
generally par or $101. The rate can usually be raised, but the bonds have a low
call premium, limiting the opportunity for capital gain. Some reset bonds have a
maximum rate, generally 2.5% or 3% above the initial rate.

INCREASING RATE NOTES. Increasing rate notes ("IRNs") have interest rates that
increase periodically (by 1/4% per quarter, for example). IRNs are generally
used as a temporary financing instrument since the increasing rate is an
incentive for the issuer to refinance with longer term debt.

EQUITY SECURITIES. By definition, equity securities include common and preferred
stocks, convertible securities, and warrants. Common stocks, the most familiar
type, represent an equity (ownership) interest in a corporation. Although equity
securities have a history of long-term growth in value, their prices fluctuate
based on changes in a company's financial condition and on overall market and
economic conditions. Smaller companies are especially sensitive to these
factors.

STOCKS. Certain Accounts expect to remain fully invested in common stocks to the
extent practicable, and is therefore subject to the general risk of the stock
market. The value of an Account's shares can be expected to fluctuate in
response to changes in market and economic conditions as well as the financial
conditions and prospects of the issuers in which it invests. Certain Accounts
also may invest in stocks of smaller companies that may individually exhibit
more price volatility than the broad market averages. Although equity securities
have historically demonstrated long-term growth in value, their prices fluctuate
based on changes in a company's financial condition and general economic
conditions. This is especially true in the case of smaller companies. Moreover,
Accounts may invest in stocks of growth-oriented companies that intend to
reinvest earnings rather than pay dividends. An Account may make investments in
stocks that may at times have limited market liquidity and whose purchase or
sale would result in above average transaction costs. Another factor that would
increase the fundamental risk of investing in smaller companies is the lack of
publicly available information due to their relatively short operating record as
public companies.

Investing in medium capitalization stocks may involve greater risk than
investing in large capitalization stocks, since they can be subject to more
abrupt or erratic movements. However, they tend to involve less risk than stocks
of small capitalization companies.

The nature of investing in emerging growth companies involves greater risk than
is customarily associated with investments in more established companies.
Emerging growth companies often have limited product lines, markets or financial
resources, and they may be dependent on one-person management. In addition,
there may be less research

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available on many promising small and medium sized emerging growth companies
making it more difficult to find and analyze these companies. The securities of
emerging growth companies may have limited marketability and may be subject to
more abrupt or erratic market movements than securities of larger, more
established growth companies or the market averages in general. Shares of an
Account, therefore, are subject to greater fluctuation in value than shares of a
conservative equity portfolio or of a growth portfolio that invests entirely in
proven growth stocks.

CONVERTIBLE SECURITIES. Convertible securities may include corporate notes or
preferred stock but ordinarily are long-term debt obligations of an issuer that
are convertible at a stated price or exchange rate into the issuer's common
stock. Convertible securities have characteristics similar to both common stock
and debt obligations. Although to a lesser degree than with debt securities, the
market value of convertible securities tends to decline as interest rates
increase and, conversely, to increase as interest rates decline. In addition,
because of the conversion feature, the market value of convertible securities
tends to vary with fluctuations in the market value of the underlying common
stock and, therefore, reacts to variations in the general stock market. However,
when the market price of the common stock underlying a convertible security
exceeds the conversion price, the price of the convertible security tends to
reflect the value of the underlying common stock. As the market price of the
underlying common stock declines, the convertible security tends to trade
increasingly on a yield basis, and thus may not depreciate to the same extent as
the underlying common stock.

As fixed-income securities, convertible securities are investments that provide
a stable stream of income with generally higher yields than common stocks. Like
all fixed-income securities, there can be no assurance of the current income
because the issuers of the convertible securities may default on their
obligations. Convertible securities generally offer lower interest or dividend
yields than non-convertible securities of similar quality because of the
potential through the conversion feature for capital appreciation. There can be
no assurance of capital appreciation because securities prices fluctuate.

Convertible securities generally are subordinated to other similar but
not-convertible debt of the same issuer, although convertible bonds enjoy
seniority payment rights over all equity securities. Convertible preferred stock
is senior to the issuer's common stock. Because of the conversion feature,
however, convertible securities typically have lower ratings than similar
non-convertible securities.

A synthetic convertible security is comprised of two distinct securities that
together resemble convertible securities. Synthetic convertible securities
combine non-convertible bonds or preferred stock with warrants or stock call
options. The options that form a portion of the convertible security are listed
on a securities exchange or on the National Association of Securities Dealers
Automated Quotations Systems. The two components of a synthetic convertible
security generally are not offered as a unit but may be purchased and sold by a
Fund at different times. Synthetic convertible securities differ from
convertible securities in that each component of a synthetic convertible
security has a separate market value and responds differently from the other to
market fluctuations. Investing in synthetic convertible securities involves the
risks normally involved in holding the securities comprising the synthetic
convertible security.

DEBT SECURITIES. Debt securities held by an Account may be subject to several
types of investment risk, including market or interest rate risk, which relates
to the change in market value caused by fluctuations in prevailing interest
rates and credit risk, which relates to the ability of the issuer to make timely
interest payments and to repay the principal upon maturity. Call or income risk
relates to corporate bonds during periods of falling interest rates, and
involves the possibility that securities with high interest rates will be
prepaid or "called" by the issuer prior to maturity. Investment-grade debt
securities are generally regarded as having adequate capacity to pay interest
and repay principal, but have speculative characteristics.
Below-investment-grade debt securities (sometimes referred to as
"high-yield/high-risk" or "junk" bonds) have greater speculative
characteristics. Adverse business, financial, or economic conditions will likely
impair capacity or willingness to pay interest and repay principal.

The yield on debt instruments over a period of time should reflect prevailing
interest rates, which depend on a number of factors, including government action
in the capital markets, government fiscal and monetary policy, needs of
businesses for capital goods for expansion, and investor expectations as to
future inflation. The yield on a particular debt instrument is also affected by
the risk that the issuer will be unable to pay principal and interest.

Certain Accounts may invest in corporate debt obligations that may be rated
below the three highest rating categories of a nationally recognized statistical
rating organization (AAA, AA, or A for S&P and Aaa, AA, or A for Moody's (see
the Appendix for more information) or, if unrated, of comparable quality and may
have speculative characteristics or be speculative. Lower-rated or comparable
unrated bonds are commonly referred to as "junk bonds". There is no

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minimum acceptable rating for a security to be purchased or held by certain
Accounts, and an Account may, from time to time, purchase or hold securities
rated in the lowest rating category and may include bonds in default. Credit
ratings evaluate the safety of the principal and interest payments but not the
market value of high yield bonds. Further, the value of such bonds is likely to
fluctuate over time.

Lower-rated bonds usually offer higher yields with greater risks than
higher-rated bonds. Lower-rated bonds have more risk associated with them that
the issuer of such bonds will default on principal and interest payments. This
is because of reduced creditworthiness and increased risk of default.
Lower-rated securities generally tend to reflect short-term corporate and market
developments to a greater extent than higher-rated securities that react
primarily to fluctuations in the general level of interest rates. Short-term
corporate and market developments affecting the price or liquidity of
lower-rated securities could include adverse news affecting major issuers,
underwriters, or dealers of lower-rated corporate debt obligations. In addition,
since there are fewer investors in lower-rated securities, it may be harder to
sell the securities at an optimum time.

As a result of these factors, lower-rated securities tend to have more price
volatility and carry more risk to principal and income than higher-rated
securities.

An economic downturn may adversely affect the value of some lower-rated bonds.
Such a downturn may especially affect highly leveraged companies or companies in
cyclically sensitive industries, where deterioration in a company's cash flow
may impair its ability to meet its obligations to pay principal and interest to
bondholders in a timely fashion. From time to time, as a result of changing
conditions, issuers of lower-rated bonds may seek or may be required to
restructure the terms and conditions of securities they have issued. As a result
of these restructuring, holders of lower-rated securities may receive less
principal and interest than they had bargained for at the time such bonds were
purchased. In the event of a restructuring, an Account may bear additional legal
or administrative expenses in order to maximize recovery from an issuer.
Additionally, an increase in interest rates may also adversely impact the value
of high yield bonds.

The secondary trading market for lower rated bonds is generally less liquid than
the secondary trading market for higher-rated bonds. Adverse publicity and the
perception of investors relating to issuers, underwriters, dealers or underlying
business conditions, whether or not warranted by fundamental analysis, may
affect the price or liquidity of lower-rated bonds. On occasion, therefore, it
may become difficult to price or dispose of a particular security in the
Account.

An Account may, from time to time, own zero coupon bonds and pay-in-kind
securities. A zero coupon bond makes no periodic interest payments and the
entire obligation becomes due only upon maturity. Pay-in-kind securities make
periodic payments in the form of additional securities as opposed to cash. The
price of zero coupon bonds and pay-in-kind securities is generally more
sensitive to fluctuations in interest rates than are conventional bonds.
Additionally, federal tax law requires that interest on zero coupon bonds be
reported as income to the Account even though it receives no cash interest until
the maturity or payment date of such securities.

Many corporate debt obligations, including many lower rated bonds, permit the
issuers to call the security and therefore redeem their obligations earlier than
the stated maturity dates. Issuers are more likely to call bonds during periods
of declining interest rates. In these cases, if an Account owns a bond that is
called, the Account will receive its return of principal earlier than expected
and would likely be required to reinvest the proceeds at a lower interest rate,
thus reducing income to the Account.

EVALUATING THE RISKS OF LOWER-RATED SECURITIES. An Account's adviser or
subadviser will follow certain steps to evaluate the risks associated with
investing in lower-rated securities. These techniques include:

CREDIT RESEARCH. The adviser or subadviser performs its own
credit analysis in addition to using nationally recognized statistical
rating organizations and other sources, including discussions with the
issuer's management, the judgment of other investment analysts, and its
own informed judgment. The credit analysis will consider the issuer's
financial soundness, its responsiveness to changes in interest rates and
business conditions, and its anticipated cash flow, interest or dividend
coverage and earnings. In evaluating an issuer, the adviser or
subadviser places special emphasis on the estimated current value of the
issuer's assets rather than historical costs.

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DIVERSIFICATION. An Account generally invests in securities of
many different issuers, industries, and economic sectors to reduce
portfolio risk.

ECONOMIC ANALYSIS. The adviser or subadviser will also analyze
current developments and trends in the economy and in the financial
markets. When investing in lower-rated securities, timing and selection
are critical and analysis of the business cycle can be important.

Achievement by an Account investing in these bonds of its investment objective
may be more dependent on the credit analysis of a lower-rated bond than would be
the case if the Account invested exclusively in higher-rated bonds.

EXCHANGE-TRADED FINANCIAL FUTURES. Certain Accounts may use exchange-traded
financial futures contracts consisting of stock index futures contracts and
futures contracts on debt securities ("interest rate futures") as a hedge to
protect against changes in stock prices or interest rates. A stock index futures
contract is a contractual obligation to buy or sell a specified index of stock
at a future date for a fixed price.

An Account will not purchase or sell futures contracts for which the aggregate
initial margin exceeds 5% of the fair market value of its assets, after taking
into account unrealized profits and losses on any such contracts which it has
entered into. When a futurescontract is purchased, the Account will set aside an
amount of cash and cash equivalents equal to the total market value of the
futures contract, less the amount of the initial margin. At no time will the
Account's investments in such futures be used for speculative purposes.

All financial futures contracts will be traded on exchanges that are licensed
and regulated by the Commodity Futures Trading Commission ("CFTC"). To ensure
that its futures transactions meet CFTC standards, the Account will enter into
futures contracts for hedging purposes only (i.e., for the purposes or with the
intent specified in CFTC regulations and interpretations, subject to the
requirements of the Securities and Exchange Commission).

The use of options, futures contracts, options on futures contracts, forward
contracts and options on foreign currencies may result in the loss of principal,
particularly where such instruments are traded for other than hedging purposes
(e.g., to enhance current yield).

STOCK INDEX FUTURES CONTRACTS. Certain Accounts may purchase and sell stock
index futures contracts. Stock index futures contracts bind purchaser and seller
to deliver, at a future date specified in the contract, a cash amount equal to a
multiple of the difference between the value of a specified stock index on that
date and the settlement price specified by the contract. That is, the seller of
the futures contract must pay and the purchaser would receive a multiple of any
excess of the value of the index over the settlement price, and conversely, the
purchaser must pay and the seller would receive a multiple of any excess of the
settlement price over the value of the index. A public market currently exists
for stock index futures contracts based on the S&P 500 Index, the New York Stock
Exchange Composite Index, the Value Line Stock Index, and the Major Market
Index. It is expected that financial instruments related to broad-based indices,
in addition to those for which futures contracts are currently traded, will in
the future be the subject of publicly traded futures contracts. Each Account may
purchase and sell stock index futures contracts on its benchmark index or
similar index.

Positions taken in the futures markets are not normally held until delivery or
cash settlement is required, but instead are liquidated through offsetting
transactions that may result in a gain or a loss. While futures positions taken
by an Account are usually liquidated in this manner, an Account may instead make
or take delivery of underlying securities whenever it appears economically
advantageous to do so. A clearing organization associated with the relevant
exchange assumes responsibility for closing out transactions and guarantees
that, as between the clearing members of the exchange, the sale and purchase
obligations will be performed with regard to all positions that remain open at
the termination of the contract.

When futures contracts are entered into by an Account, either as the purchaser
or the seller of such contracts, the Fund is required to deposit with its
custodian in a segregated account in the name of the futures commission merchant
("FCM") an initial margin of cash or U.S. Treasury bills equaling as much as 5%
to 10% or more of the contract settlement price. The nature of initial margin
requirements in futures transactions differs from traditional margin payments
made in securities transactions in that initial margins for futures contracts do
not involve the borrowing of funds by the customer to finance the transaction.
Instead, a customer's initial margin on a futures contract represents a good
faith deposit securing the customer's contractual obligations under the futures
contract. The initial margin deposit is returned,

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assuming these obligations have been met, when the futures contract is
terminated. In addition, subsequent payments to and from the FCM, called
"variation margin," are made on a daily basis as the price of the underlying
security or stock index fluctuates reflecting the change in value in the long
(purchase) or short (sale) positions in the financial futures contract, a
process known as "marking to market."

Futures contracts generally are not entered into to acquire the underlying asset
and generally are not held to maturity. Prior to the contract settlement date,
an Account will normally close all futures positions by entering into an
offsetting transaction which operates to cancel the position held, and which
usually results in a profit or loss.

OPTIONS ON STOCK INDEX FUTURES CONTRACTS. Certain Accounts also may purchase
call and put options and write covered call and put options on stock index
futures contracts of the type into which the particular Fund is authorized to
enter. Covered put and call options on futures contracts will be covered in the
same manner as covered options on securities and securities indices. The
Accounts may invest in such options for the purpose of closing out a futures
position that has become illiquid.

Options on futures contracts are traded on exchanges that are licensed and
regulated by the CFTC. A call option on a futures contract gives the purchaser
the right in return for the premium paid, to purchase a futures contract (assume
a "long" position) at a specified exercise price at any time before the option
expires. A put option gives the purchaser the right, in return for the premium
paid, to sell a futures contract (assume a "short" position), for a specified
exercise price, at any time before the option expires.

Unlike entering into a futures contract itself, purchasing options on futures
contracts allows a buyer to decline to exercise the option, thereby avoiding any
loss beyond forgoing the purchase price (or "premium") paid for the options.
Whether, in order to achieve a particular objective, the Account enters into a
stock index futures contract, on the one hand, or an option contract on a stock
index futures contract, on the other, will depend on all the circumstances,
including the relative costs, liquidity, availability and capital requirements
of such futures and options contracts. Each Account will consider the relative
risks involved, which may be quite different. These factors, among others, will
be considered in light of market conditions and the particular objective to be
achieved.

CERTAIN ADDITIONAL RISKS OF FUTURES CONTRACTS AND OPTIONS ON FUTURES CONTRACTS.
In addition to the risks described in the Prospectus, the use of stock index
futures contracts and options on such futures contracts may entail the following
risks. First, although such instruments when used by an Account are intended to
correlate with the Account's portfolio securities, in many cases the futures
contracts or options on futures contracts used may be based on stock indices the
components of which are not identical to the portfolio securities owned or
intended to be acquired by the Account. Second, due to supply and demand
imbalances and other market factors, the price movements of stock index futures
contracts and options thereon may not necessarily correspond exactly to the
price movements of the stock indices on which such instruments are based.
Accordingly, there is a risk that an Account's transactions in those instruments
will not in fact offset the impact on the Account of adverse market developments
in the manner or to the extent contemplated or that such transactions will
result in losses to the Account which are not offset by gains with respect to
corresponding portfolio securities owned or to be purchased by that Account.

To some extent, careful management of these strategies can minimize these risks.
For example, where price movements in a futures contract are expected to be less
volatile than price movements in the related portfolio securities owned or
intended to be acquired by an Account, it may, in order to compensate for this
difference, use an amount of futures contracts which is greater than the amount
of such portfolio securities. Similarly, where the price movement of a futures
contract is anticipated to be more volatile, an Account may use an amount of
such contracts which is smaller than the amount of portfolio securities to which
such contracts relate.

The risk that the hedging technique used will not actually or entirely offset an
adverse change in the value of an Account's securities is particularly relevant
to futures contracts. An Account, in entering into a futures purchase contract,
potentially could lose any or all of the contract's settlement price. In
addition, because stock index futures contracts require delivery at a future
date of an amount of cash equal to a multiple of the difference between the
value of a specified stock index on that date and the settlement price, an
algebraic relationship exists between any price movement in the underlying index
and the potential cost of settlement to an Account. A small increase or decrease
in the value of the underlying index can, therefore, result in a much greater
increase or decrease in the cost to the Fund. Although the Accounts intend to
establish positions in these instruments only when there appears to be an active
market, there is no assurance that a liquid market for such instruments will
exist when they seek to "close out" (i.e., terminate) a

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particular stock index futures contract position. Trading in such instruments
could be interrupted, for example, because of a lack of either buyers or
sellers. In addition, the futures exchanges may suspend trading after the price
of such instruments has risen or fallen more than the maximum amount specified
by the exchange. An Account may be able, by adjusting investment strategy in the
cash or other contract markets, to offset to some extent any adverse effects of
being unable to liquidate a futures position. Nevertheless, in some cases, an
Account may experience losses as a result of such inability. Therefore it may
have to liquidate other more advantageous investments to meet its cash needs.

In addition, FCMs or brokers in certain circumstances will have access to the
Accounts' assets posted as margin in connection with these transactions as
permitted under the Act. The Accounts will use only FCMs or brokers in whose
reliability and financial soundness they have full confidence and have adopted
certain other procedures and limitations to reduce the risk of loss with respect
to any assets which brokers hold or to which they may have access. Nevertheless,
in the event of a broker's insolvency or bankruptcy, it is possible that an
Account could experience a delay or incur costs in recovering such assets or
might recover less than the full amount due. Also the value of such assets could
decline by the time the Account could effect such recovery.

The success of these techniques depends, among other things, on the adviser's or
subadviser's ability to predict the direction and volatility of price movements
in the futures markets as well as the securities markets and on its ability to
select the proper type, time, and duration of futures contracts. There can be no
assurance that these techniques will produce their intended results. In any
event, the adviser or subadviser will use stock index futures contracts and
options thereon only when it believes the overall effect is to reduce, rather
than increase, the risks to which an Account is exposed. These transactions
also, of course, may be more, rather than less, favorable to an Account than
originally anticipated.

SWAPS. Swaps are over-the-counter (OTC) agreements that typically require
counterparties to make periodic payments to each other for a specified period.
The calculation of these payments is based on an agreed-upon amount, called the
notional amount, that generally is exchanged only in currency swaps. The
periodic payments may be a fixed or floating (variable) amount. Floating
payments may change with fluctuations in interest or currency rates or equity or
commodity prices, depending on the contract terms. Swaps are used to hedge a
risk or obtain more desirable financing terms, and they can be used to profit
from correctly anticipating rate and price movements.

FOREIGN AND EMERGING MARKETS SECURITIES. Certain Accountss may invest in foreign
and/or emerging markets securities. These securities may include U.S.
dollar-denominated securities and debt securities of foreign governments
(including provinces and municipalities) or their agencies or instrumentalities,
securities issued or guaranteed by international organizations designated or
supported by multiple governments or entities to promote economic reconstruction
or development, and securities of foreign corporations and financial
institutions.

Certain Accounts may invest in American Depositary Receipts ("ADRs"), Global
Depositary Receipts ("GDRs") and European Depositary Receipts ("EDRs"), and
similar instruments providing for indirect investment in securities of foreign
issuers. Due to the absence of established securities markets in certain foreign
countries and restrictions in certain countries on direct investment by foreign
countries and restrictions in certain countries on direct investment by foreign
entities, an Account may invest in certain issuers through the purchase of
sponsored and unsponsored ADRs or other similar securities, such as American
Depositary Shares, Global Depositary Shares of International Depositary
Receipts. ADRs are receipts typically issued by U.S. banks evidencing ownership
of the underlying securities into which they are convertible. These securities
may or may not be denominated in the same currency as the underlying securities.
Unsponsored ADRs may be created without the participation of the foreign issuer.
Holders of unsponsored ADRs generally bear all the costs of the ADR facility,
whereas foreign issuers typically bear certain costs in a sponsored ADR. The
bank or trust company depository of an unsponsored ADR may be under no
obligation to distribute shareholder communications received from the foreign
issuer or to pass through voting rights.

Subject to any limit on an Account's investments in foreign securities, there
may be no limit on the amount of assets that may be invested in securities of
issuers domiciled in a single country or market. To the extent that an Account's
assets are invested substantially in a single country or market, the Account is
more susceptible to the risks of investing in that country or market than it
would be if its assets were geographically more diversified.

Investments in foreign securities may offer an Account an opportunity to pursue
the performance potential of an overseas market. Such securities, however, also
entail risks in addition to the risks of U.S. securities. Foreign governments
may nationalize or expropriate assets or impose confiscatory taxes on an
investment. Civil wars or other

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political or financial instability or diplomatic developments may affect the
value of a Fund's foreign investments. Foreign countries may impose currency
exchange controls, foreign withholding taxes, or other factors that may affect
the value of an investment. Movement in foreign currency exchange rates against
the U.S. dollar may result in significant changes in the value of overseas
investments. Generally, if the U.S. dollar weakens, the value of the foreign
investment in U.S. dollars increases. Conversely, when the U.S. dollar
strengthens, the value of the foreign investment in U.S. dollars decreases.

There is generally less information publicly available about a foreign issuer
than about a U.S. issuer, and foreign issuers generally are not subject to
accounting, auditing and financial reporting practices comparable with U.S.
practices. Some foreign securities or markets are more thinly traded and, as a
result, foreign securities may be less liquid and more volatile than U.S.
securities. Foreign settlement procedures and trade regulations may involve
risks and expenses not present in U.S. settlements.

The risks of investing in foreign securities may be intensified in the case of
investment in emerging markets. Securities of many issuers in emerging markets
may be less liquid and more volatile than comparable domestic securities.
Investment in emerging markets may be subject to delays in settlements,
resulting in periods when a portion of an Account's assets is uninvested and no
return is earned thereon. Certain markets may require payment for securities
before delivery, and in such markets the Account bears the risk that the
securities will not be delivered and that the payment will not be returned.

In addition, many emerging market countries have experienced substantial, and in
some periods extremely high, rates of inflation for many years. Inflation and
rapid fluctuations in inflation rates have had and may continue to have adverse
effects on the economies and securities markets of certain of these countries.
In many cases, emerging market countries are among the world's largest debtors
to commercial banks, foreign governments, international financial organizations
and other financial institutions. In recent years, the governments of some of
these countries have encountered difficulties in servicing their external debt
obligations, which led to defaults on certain obligations and the restructuring
of certain indebtedness.

Foreign securities transactions also include generally higher commission rates
and the risks of adverse changes in investment or exchange control regulations,
political instability that could affect U.S. investments in foreign countries,
and potential restrictions on the flow of international capital.

Additionally, dividends payable on foreign securities may be subject to foreign
taxes withheld prior to distribution. Moreover, individual foreign economies may
differ favorably or unfavorably from the U.S. economy in such respects as growth
of gross national product, rate of inflation, capital reinvestment, resource
self-sufficiency and balance of payment positions.

ILLIQUID SECURITIES. Certain Accounts may make investments in illiquid
securities. Illiquid securities are those that are not readily marketable within
seven days in the ordinary course of business and include restricted securities
that may not be publicly sold without registration under the Securities Act of
1933 (the "1933 Act") and Rule 144A securities. In most instances such
securities are traded at a discount from the market value of unrestricted
securities of the same issuer until the restriction is eliminated. If a Fund
sells such portfolio securities, it may be deemed an underwriter, as such term
is defined in the 1933 Act, with respect to those sales, and registration of
such securities under the 1933 Act may be required. The Accounts will not bear
the expense of such registration. In determining securities subject to the
percentage limitation, an Account will include, in addition to restricted
securities, repurchase agreements maturing in more than seven days and other
securities not having readily available market quotations, including options
traded over-the-counter, certain mortgage related securities and other
securities subject to restrictions on resale.

RULE 144A SECURITIES. Certain Rule 144A securities may be considered illiquid
and, therefore, their purchase is subject to a Fund's limitation on the purchase
of illiquid securities, unless the adviser under guidelines approved by the
Board determines on an ongoing basis that an adequate trading market exists for
the securities. If qualified institutional buyers become uninterested for a time
in purchasing Rule 144A securities held by an Account, the Account's level of
illiquidity could increase. The Board has established standards and procedures
for determining the liquidity of Rule 144A securities and periodically monitors
the adviser's implementation of the standards and procedures. The ability to
sell to qualified institutional buyers under Rule 144A has developed in recent
years, and the adviser cannot predict how this market will develop.

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LOANS OF SECURITIES TO BROKER DEALERS. The Account may lend securities to
brokers and dealers pursuant to agreements requiring that the loans be
continuously secured by cash, liquid securities, or any combination of cash and
liquid securities, as collateral equal at all times in value to at least 102% of
the market value of the securities loaned. The Account will not loan securities
if, after a loan, the aggregate of all outstanding securities loans exceeds one
third of the value of the Account's total assets taken at their current market
value. The Account continues to receive interest or dividends on the securities
loaned and simultaneously earns interest on the investment of any cash loan
collateral in U.S. Treasury notes, certificates of deposit, other high grade,
short-term obligations or interest-bearing cash equivalents. Although voting
rights attendant to securities loaned pass to the borrower, such loans may be
called at any time and will be called so that the Account may vote the
securities if, in the opinion of the investment adviser, a material event
affecting the investment would occur. There may be risks of delay in receiving
additional collateral, in recovering the securities loaned, or even loss of
rights in the collateral should the borrower of the securities fail financially.
However, loans may be made only to borrowers deemed to be of good standing,
under standards approved by the Board of Managers ("Board"), when the income to
be earned from the loan justifies the risks.

REVERSE REPURCHASE AGREEMENTS: A reverse repurchase agreement transaction is
similar to borrowing cash. In a reverse repurchase agreement, an Account
transfers possession of a portfolio instrument to another person, such as a
financial institution, broker, or dealer, in return for a percentage of the
instrument's market value in cash and agrees on a stipulated date in the future
to repurchase the portfolio instrument by remitting the original consideration
plus interest at an agreed upon rate. The use of reverse repurchase agreements
may enable an Account to avoid selling portfolio instruments at a time when a
sale may be deemed to be disadvantageous, but the ability to enter into reverse
repurchase agreements does not ensure that the Account will be able to avoid
selling portfolio instruments at a disadvantageous time.

The Accounts will enter into reverse repurchase agreements only with parties
whose creditworthiness has been found satisfactory to the adviser or subadviser.
Such transactions may increase fluctuations in an Account's yield or in the
market value of its assets.

When effecting reverse repurchase agreements, liquid assets of an Account, in a
dollar amount sufficient to make payment for the obligations to be purchased,
are segregated at the trade date. These securities are marked to market daily
and are maintained until the transaction is settled. During the period any
reverse repurchase agreements are outstanding, but only to the extent necessary
to assure completion of the reverse repurchase agreements, an Account may
restrict the purchase of portfolio instruments to money market instruments
maturing on or before the expiration date of the reverse repurchase agreements.

TEMPORARY INVESTMENTS. Permissible temporary investments for defensive or cash
management purposes may include U.S. government securities and money market
instruments, including instruments of banks that are members of the Federal
Deposit Insurance Corporation with assets of at least $1 billion, such as
certificates of deposit, demand and time deposits, and bankers' acceptances;
prime commercial paper, including master demand notes; and repurchase agreements
secured by U.S. government securities.

Certain Accounts may invest in debt obligations which involve equity features
such as conversion or exchange rights, warrants for the acquisition of common
stock of the same or a different issuer, participations based on revenues, sales
or profits, or the purchase of common stock in a unit transaction (where
corporate debt securities and common stock are offered as a unit).

TEMPORARY BANK BORROWING: Certain Accounts may borrow from banks for temporary
purposes, including the meeting of redemption requests which might require the
untimely disposition of securities.

LETTERS OF CREDIT: Certain Accounts may also engage in trades of municipal
obligations, certificates of participation therein, commercial paper and other
short-term obligations that are backed by irrevocable letters of credit issued
by banks which assume the obligation for payment of principal and interest in
the event of default by an issuer. Only banks the securities of which, in the
opinion of the Investment Subasviser, are of investment quality comparable to
other permitted investments of the Accounts may be used for letter of
credit-backed investment.

INVESTMENT IN UNSEASONED COMPANIES: Certain Accounts may also invest Account
assets in securities of companies that have operated for less than three years,
including the operations of predecessors. The Accounts have undertaken that they
will not make investments that will result in more than 5% of total assets being
invested in the securities of

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newly formed companies and equity securities that are not readily marketable.
Investing in securities of unseasoned companies may, under certain
circumstances, involve greater risk than is customarily associated with
investment in more established companies.

REAL ESTATE-RELATED INSTRUMENTS: Some Accounts may engage in the purchase and
sale of real estate related instruments including real estate investment trusts,
commercial and residential mortgage-backed securities, and real estate
financings. Real estate-related instruments are sensitive to factors such as
real estate values and property taxes, interest rates, cash flow of underlying
real estate assets, over building and the management skill and creditworthiness
of the issuer. Real estate-related instruments may also be affected by tax and
regulatory requirements, such as those relating to the environment.

CORPORATE ASSET-BACKED SECURITIES: Corporate asset-backed securities, issued by
trusts and special purpose corporations, are backed by a pool of assets, such as
credit card or automobile loan receivables, representing the obligations of a
number of different parties. Corporate asset-backed securities present certain
risks. For instance, in the case of credit care receivables, these securities
may not have the benefit of any security interest in the related collateral.

ASSET-BACKED MORTGAGE SECURITIES: Securities of this type include interests in
pools of lower-rated debt securities, or consumer loans or mortgages, or complex
instruments such as collateralized mortgage obligations and stripped
mortgage-backed securities. The value of these securities may be significantly
affected by changes in interest rates, the market's perception of the issuers,
and the creditworthiness of the parties involved. Some securities may have a
structure that makes their reaction to interest rates and other factors
difficult to predict, making their value highly volatile. These securities may
also be subject to prepayment risk.

LOAN PARTICIPATIONS AND OTHER DIRECT INDEBTEDNESS: By purchasing a loan
participation, a Fund acquires some or all of the interest of a bank or other
lending institution in a loan to a corporate borrower. Many such loans are
secured, and most impose restrictive covenants which must be met by the
borrower. These loans are made generally to finance internal growth, mergers,
acquisitions, stock repurchases, leveraged buy-outs and other corporate
activities. Such loans may be in default at the time of purchase.

Some Accounts may also purchase other direct indebtedness such as trade or other
claims against companies, which generally represent money owed by the company to
a supplier of goods and services. These claims may also be purchased at a time
when the company is in default. Certain of the loan participations and other
direct indebtedness acquired by these Accounts may involve revolving credit
facilities or other standby financing commitments which obligate the Accounts to
pay additional cash on a certain date or on demand.

The highly leveraged nature of many such loans and other direct indebtedness may
make such loans especially vulnerable to adverse changes in economic or market
conditions. Loan participations and other direct indebtedness may not be in the
form of securities or may be subject to restrictions on transfer, and only
limited opportunities may exist to resell such instruments. As a result, the
Accounts may be unable to sell such investments at an opportune time or may have
to resell them at less than fair market value.

INVESTMENT COMPANY SECURITIES: Generally, the Accounts may purchase and sell
securities of open and closed-end investment companies subject to the limits
prescribed under the 1940 Act.

AFFILIATED BANK TRANSACTIONS: Certain Accounts may engage in transactions with
financial institutions that are, or may be considered to be "affiliated persons"
of the fund under the Investment Company Act of 1940. These transactions may
include repurchase agreements with custodian banks; short-term obligations of,
and repurchase agreements with, the 50 largest U.S. banks (measured by
deposits); municipal securities, U.S. government securities with affiliated
financial institutions that are primary dealers in these securities; short-term
currency transactions; and short-term borrowings. The Board of Managers and the
advisers of Accounts engaged in affiliated bank transactions have established
and will periodically review procedures applicable to transactions involving
affiliated financial institutions.

INDEXED SECURITIES: Certain Accounts may purchase securities whose prices are
indexed to the prices of other securities, securities indices, currencies,
precious metals or other commodities, or other financial indicators. Indexed
securities typically, but not always, are debt securities or deposits whose
value at maturity or coupon rate is determined by reference to a specific
instrument or statistic. Gold-indexed securities, for example, typically provide
for a maturity value that depends on the price of gold, resulting, in a security
whose price tends to rise and fall together with gold

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<PAGE> 146

prices. Currency-indexed securities typically are short-term to
intermediate-term debt securities whose maturity values or interest rates are
determined by reference to the values of one or more specified foreign
currencies, and may offer higher yields than U.S. dollar-denominated securities
of equivalent issuers. Currency-indexed securities may be positively or
negatively indexed; that is, their maturity value may increase when the
specified currency value increases, resulting in a security that performs
similarly to a foreign-denominated instrument, or their maturity value may
decline when foreign currencies increase, resulting in a security whose price
characteristics are similar to a put on the underlying currency.
Currency-indexed securities may also have prices that depend on the values of a
number of different foreign currencies relative to each other.

The performance of indexed securities depends to a great extent on the
performance of the security, currency, or other instrument to which they are
indexed, and may also be influenced by interest rate changes in the United
States and abroad. At the same time, indexed securities are subject to the
credit risks associated with the issuer of the security, and their values may
decline substantially if the issuer's creditworthiness deteriorates. Recent
issuers of indexed securities have included banks, corporations, and certain
U.S. government agencies. Indexed securities may be more volatile than the
underlying instruments.

SHORT SALES "AGAINST THE BOX": Some Accounts may enter into a short sale against
the box. If an Account decides to enter into such transitions, it will be
required to set aside securities equivalent in kind and amount to the securities
sold short (or securities convertible or exchangeable into such securities) and
will be required to hold such securities while the short sale is outstanding.

COMMERCIAL PAPER RATINGS: Investments in commercial paper are limited to those
rated A-1 by Standard & Poor's Corporation and Prime-1 by Moody's Investors
Service, Inc. Commercial paper rated A-1 by S&P has the following
characteristics: (1) liquidity ratios are adequate to meet cash requirements;
(2) the issuer's long-term senior debt is rated "A" or better, although in some
cases "BBB" credits may be allowed; (3) the issuer has access to at least two
additional channels of borrowing; (4) basic earnings and cash flow have an
upward trend with allowances made for unusual circumstances; and (5) the
issuer's industry is typically well established and the issuer has a strong
position within the industry.

The rating Prime-1 is the highest commercial paper rating assigned by Moody's.
Among the factors considered by Moody's in assigning ratings are the following:
(1) evaluating the management of the issuer; (2) economic evaluation of the
issuer's industry or industries and an appraisal of speculative-type risks which
may be inherent in certain areas; (3) evaluation of the issuer's products in
relation to competition and customer acceptance; (4) liquidity; (5) amount and
quality of long-term debt; (6) trend of earnings over a period of ten years; (7)
financial strength of a parent company and the relationship which exists with
the issuer; and (8) recognition by the management of obligations which may be
present or may arise as a result of public preparations to meet such
obligations. The relative strength or weakness of the above factors determines
how the issuer's commercial paper is rated within various categories.

INVESTMENT RESTRICTIONS

The Separate Accounts each have different investment objectives and
policies, as discussed above and in the Prospectus. Each Managed Separate
Account has certain fundamental investment restrictions, which are set forth
below. Neither the investment objective nor the fundamental investment
restrictions can be changed without a vote of a majority of the outstanding
voting securities of the Accounts, as defined in the 1940 Act.

The percentage restrictions (for either fundamental investment policies
or investment restrictions) are interpreted such that if they are adhered to at
the time of investment, a later increase in a percentage beyond the specified
limit resulting from a change in the values of portfolio securities or in the
amount of net assets shall not be considered a violation. It must be recognized
that there are risks inherent in the ownership of any investment and that there
can be no assurance that the investment objectives of the Separate Accounts will
be achieved.

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS TIMED GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES

INVESTMENT RESTRICTIONS

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<PAGE> 147

The investment restrictions for Accounts GIS and TGIS, as set forth
below, are identical, except where indicated. The investment restrictions set
forth in items 1 through 9 are fundamental and may not be changed without a vote
of a majority of the outstanding voting securities of Account GIS or Account
TGIS, as defined in the 1940 Act. Items 10 through 13 may be changed by a vote
of the Board of Managers of Account GIS or Account TGIS.

1. Not more than 5% of the assets of the Account will be invested in the
securities of any one issuer, except obligations of the United States
Government and its instrumentalities.

2. Borrowings will not be made, except that the right is reserved to
borrow from banks for emergency purposes, provided that such
borrowings will not exceed 5% of the value of the assets of Account
GIS, or 10% of the value of the assets of Account TGIS, and that
immediately after the borrowing, and at all times thereafter, and
while any such borrowing is unrepaid, there will be asset coverage of
at least 300% for all borrowings of the Account.

3. Securities of other issuers will not be underwritten, except that the
Account could be deemed an underwriter when engaged in the sale of
restricted securities. (See item 13.)

4. Interests in real estate will not be purchased, except as may be
represented by securities for which there is an established market.

5. No purchase of commodities or commodity contracts will be made,
except transactions involving financial futures in order to limit
transaction and borrowing costs and for hedging purposes, as
discussed above.

6. Loans will be made only through the acquisition of a portion of
privately placed issue of bonds, debentures or other evidences of
indebtedness of a type customarily purchased by institutional
investors. (See item 13.)

7. Investments will not be made in the securities of a company for the
purpose of exercising management or control.

8. Not more than 10% of the voting securities of any one issuer will be
acquired. (It is the present practice of the Account not to exceed 5%
of the voting securities of any one issuer.)

9. Senior securities will not be issued.

10. Short sales of securities will not be made.

11. Purchases will not be made on margin, except for short-term credits
which are necessary for the clearance of transactions, and for the
placement of not more than 5% of its net asset value in total margin
deposits for positions in futures contracts.

12. The Account will not invest in the securities of other investment
companies, except as part of a plan of merger, consolidation or
acquisition of assets.

13. Not more than 5% of the value of the assets of the Account may be
invested in restricted securities (securities which may not be
publicly offered without registration under the Securities Act of
1933).

Changes in the investments of Accounts GIS and TGIS may be made from
time to time to take into account changes in the outlook for particular
industries or companies. The Accounts' investments will not, however, be
concentrated in any one industry; that is, no more than 25% of the value of
their assets will be invested in any one industry. While Accounts GIS and TGIS
may occasionally invest in foreign securities, it is not anticipated that such
investments will, at any time, account for more than 10% of their investment
portfolios.

The assets of Accounts GIS and TGIS will be kept fully invested, except
that (a) sufficient cash may be kept on hand to provide for variable annuity
contract obligations, and (b) reasonable amounts of cash, United States
Government

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or other liquid securities, such as short-term bills and notes, may be held for
limited periods, pending investment in accordance with their respective
investment policies.

PORTFOLIO TURNOVER

Although Accounts GIS and TGIS intend to purchase securities for
long-term appreciation of capital and income, and do not intend to place
emphasis on obtaining short-term trading profits, such short-term trading may
occur. A higher turnover rate should not be interpreted as indicating a
variation from the stated investment policy of seeking long-term accumulation of
capital, and will normally increase the brokerage costs of Accounts GIS and
TGIS. However, negotiated fees and the use of futures contracts will help to
reduce brokerage costs. While there is no restriction on portfolio turnover,
Account GIS expects to have a moderate to high level of portfolio turnover in
the range of 150% to 300%, and Account TGIS expects that its portfolio turnover
will be higher than normal since the Account is being timed by third party
investment advisory services. The portfolio turnover rate for Account GIS for
the years ended December 31, 1997, 1998 and 1999 was 64%, 50% and 47%,
respectively. The portfolio turnover rate for Account TGIS for the years ended
December 31, 1997, 1998 and 1999 was 63%, 81% and 51%, respectively.

THE TRAVELERS TIMED AGGRESSIVE STOCK ACCOUNT FOR VARIABLE ANNUITIES

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental and may not
be changed without a vote of a majority of the outstanding voting securities of
Account TAS, as defined in the 1940 Act. Account TAS may not:

1. invest more than 5% of its total assets, computed at market value,
in the securities of any one issuer;

2. invest in more than 10% of any class of securities of any one issuer;

3. invest more than 5% of the value of its total assets in companies
which have been in operation for less than three years;

4. borrow money, except to facilitate redemptions or for emergency or
extraordinary purposes and then only from banks and in amounts of up
to 10% of its gross assets computed at cost; while outstanding, a
borrowing may not exceed one-third of the value of its net assets,
including the amount borrowed; Account TAS has no intention of
attempting to increase its net income by means of borrowing and all
borrowings will be repaid before additional investments are made;
assets pledged to secure borrowings shall be no more than the lesser
of the amount borrowed or 10% of the gross assets of Account TAS
computed at cost;

5. underwrite securities, except that Account TAS may purchase
securities from issuers thereof or others and dispose of such
securities in a manner consistent with its other investment policies;
in the disposition of restricted securities the Account may be deemed
to be an underwriter, as defined in the Securities Act of 1933 (the
"1933 Act");

6. purchase real estate or interests in real estate, except through the
purchase of securities of a type commonly purchased by financial
institutions which do not include direct interest in real estate or
mortgages, or commodities or commodity contracts, except transactions
involving financial futures in order to limit transaction and
borrowing costs and for hedging purposes as described above;

7. invest for the primary purpose of control or management;

8. make margin purchases or short sales of securities, except for
short-term credits which are necessary for the clearance of
transactions, and to place not more than 5% of its net asset value in
total margin deposits for positions in futures contracts;

9. make loans, except that Account TAS may purchase money market
securities, enter into repurchase agreements, buy publicly and
privately distributed debt securities and lend limited amounts of its
portfolio

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securities to broker-dealers; all such investments must be consistent
with the Account's investment objective and policies;

10. invest more than 25% of its total assets in the securities of
issuers in any single industry;

12. invest in interests in oil, gas or other mineral exploration or
development programs; or

13. invest more than 5% of its net assets in warrants, valued at the
lower of cost or market; warrants acquired by the Account in units or
attached to securities will be deemed to be without value with regard
to this restriction. Account TAS is subject to restrictions in the
sale of portfolio securities to, and in its purchase or retention of
securities of, companies in which the management personnel of The
Travelers Investment Management Company ("TIMCO") have a substantial
interest.

Account TAS may make investments in an amount of up to 10% of the value
of its net assets in restricted securities which may not be publicly sold
without registration under the 1933 Act. In most instances such securities are
traded at a discount from the market value of unrestricted securities of the
same issuer until the restriction is eliminated. If and when Account TAS sells
such portfolio securities, it may be deemed an underwriter, as such term is
defined in the 1933 Act, with respect thereto, and registration of such
securities under the 1933 Act may be required. Account TAS will not bear the
expense of such registration. Account TAS intends to reach agreements with all
such issuers whereby they will pay all expenses of registration. In determining
securities subject to the 10% limitation, Account TAS will include, in addition
to restricted securities, repurchase agreements maturing in more than seven days
and other securities not having readily available market quotations.

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PORTFOLIO TURNOVER

Although Account TAS intends to invest in securities selected primarily
for prospective capital growth and does not intend to place emphasis on
obtaining short-term trading profits, such short-term trading may occur. A high
turnover rate should not be interpreted as indicating a variation from the
stated investment policy, and will normally increase Account TAS's brokerage
costs. While there is no restriction on portfolio turnover, Account TAS's
portfolio turnover rate may be high since the Account is being timed by third
party investment advisory services. The portfolio turnover rate for the years
ended December 31, 1997, 1998 and 1999 was 92%, 113% and 85%, respectively.

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

INVESTMENT RESTRICTIONS

The investment restrictions set forth in items 1 through 9 below are
fundamental and may not be changed without a vote of a majority of the
outstanding voting securities of Account QB, as defined in the 1940 Act. Items
10 through 13 may be changed by a vote of the Board of Managers of Account QB.

1. Not more than 15% of the value of the assets of Account QB will be
invested in the securities of any one issuer, except obligations of
the United States Government and its instrumentalities, for which
there is no limit.

2. Borrowings will not be made, except that the right is reserved to
borrow from banks for emergency purposes, provided that these
borrowings will not exceed 5% of the value of the assets of Account
QB and that immediately after the borrowing, and at all times
thereafter, and while any borrowing is unrepaid, there will be asset
coverage of at least 300% for all borrowings of Account QB.

3. Securities of other issuers will not be underwritten, except that
Account QB could be deemed to be an underwriter when engaged in the
sale of restricted securities.

4. Interests in real estate will not be purchased, except as may be
represented by securities for which there is an established market.

5. No purchase of commodities or commodity contracts will be made,
except transactions involving financial futures used as a hedge
against unanticipated changes in prevailing levels of interest rates.

6. Loans will be made only through the acquisition of a portion of
privately placed issue of bonds, debentures and other evidences of
indebtedness of a type customarily purchased by institutional
investors.

7. Investments will not be made in the securities of a company for the
purpose of exercising management or control.

8. Not more than 10% of the voting securities of any one issuer will
be acquired.

9. Senior securities will not be issued.

10. Short sales of securities will not be made.

11. Purchases will not be made on margin, except for any short-term
credits that are necessary for the clearance of transactions and to
place up to 5% of the value of its net assets in total margin
deposits for positions in futures contracts.

12. Account QB will not invest in the securities of other investment
companies, except as part of a plan of merger, consolidation or
acquisition of assets.

13. The average period of maturity (or in the case of mortgage-backed
securities, the estimated average life of cash flows) of all fixed
interest debt instruments held by Account QB will not exceed five
years.

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<PAGE> 151

The investments of Account QB will not be concentrated in any one
industry; that is, no more than 25% of the value of its assets will be invested
in any one industry. There is no investment policy as to Account QB's investment
in foreign securities.

PORTFOLIO TURNOVER

Brokerage costs associated with short-term debt instruments are
significantly lower than those incurred on equity investments, and thus, a high
portfolio turnover rate would not adversely affect the brokerage costs of
Account QB to the same extent as high turnover in a separate account which
invests primarily in common stock. The portfolio turnover rate for Account QB
for the years ended December 31, 1997, 1998 and 1999 was 196%, 438% and 340%,
respectively.

THE TRAVELERS TIMED BOND ACCOUNT FOR VARIABLE ANNUITIES

INVESTMENT RESTRICTIONS

The investment restrictions set forth below are fundamental and may not
be changed without a vote of a majority of the outstanding voting securities of
Account TB, as defined in the 1940 Act. Account TB may not:

1. invest more than 5% of its total assets, computed at market value, in
the securities of any one issuer (exclusive of securities of the
United States Government, its agencies or instrumentalities, for
which there is no limit);

2. invest in more than 10% of any class of securities of any one issuer;

3. invest more than 5% of the value of its total assets in companies
which have been in operation for less than three years;

4. borrow money, except to facilitate redemptions or for emergency or
extraordinary purposes and then only from banks and in amounts of up
to 10% of its gross assets computed at cost; while outstanding
according to the 1940 Act, a borrowing may not exceed one-third of
the value of the net assets, including the amount borrowed; Account
TB has no intention of attempting to increase its net income by
borrowing and all borrowings will be repaid before additional
investments are made; assets pledged to secure borrowings shall be no
more than the lesser of the amount borrowed or 10% of the gross
assets computed at cost;

5. underwrite securities, except that Account TB may purchase securities
from issuers thereof or others and dispose of such securities in a
manner consistent with its other investment policies; in the
disposition of restricted securities Account TB may be deemed to be
an underwriter, as defined in the 1933 Act;

6. purchase real estate or interests in real estate, except through the
purchase of securities of a type commonly purchased by financial
institutions which do not include direct interest in real estate or
mortgages, or commodities or commodity contracts, except transactions
involving financial futures in order to limit transactions and
borrowing costs and for hedging purposes as discussed above;

7. invest for the primary purpose of control or management;

9. make loans, except that Account TB may purchase money market
securities, enter into repurchase agreements, buy publicly and
privately distributed debt securities and lend limited amounts of its
portfolio securities to brokers-dealers; all such investments must be
consistent with the investment objective and policies;

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10. invest more than 25% of its total assets in the securities of
issuers in any single industry (exclusive of securities of the
United States government, its agencies or instrumentalities, for
which there is no limit); or

11. purchase the securities of any other investment company, except
in the open market and at customary brokerage rates and in no event
more than 3% of the voting securities of any investment company.
When consistent with its investment objectives, Account TB may
purchase securities of brokers, dealers, underwriters or investment
advisers. Account TB is subject to restrictions in the sale of
portfolio securities to, and in its purchase or retention of
securities of, companies in which the management personnel of
Travelers Asset Management International Company LLC ("TAMIC") have
a substantial interest.

PORTFOLIO TURNOVER

Brokerage costs associated with debt instruments are significantly lower
than those incurred on equity investments, and thus, a high portfolio turnover
rate would not adversely affect the brokerage costs of Account TB to the same
extent as high turnover in a separate account which invests primarily in common
stock. While there is no restriction on portfolio turnover, Account TB's
turnover rate may be high since the Account is being timed by third party
investment advisory services. The portfolio turnover rate for Account TB for the
years ended December 31, 1997, 1998 and 1999 was 129%, 0% and 0%, respectively.

THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES

INVESTMENT RESTRICTIONS

In keeping with the objective of obtaining the highest possible current
income consistent with a high degree of liquidity and preservation of capital,
Account MM operates under the following restrictions, which restrictions are
fundamental and may not be changed without a vote of a majority of the
outstanding voting securities of Account MM, as defined in the 1940 Act. Account
MM may not:

1. purchase any security which has a maturity date more than one
year from the date of the Account's purchase;

2. invest more than 25% of its assets in the securities of issuers
in any single industry (exclusive of securities issued by domestic
banks and savings and loan associations, or securities issued or
guaranteed by the United States Government, its agencies,
authorities or instrumentalities). Neither all finance companies, as
a group, nor all utility companies, as a group, are considered a
single industry for the purpose of restriction;

3. acquire more than 10% of the outstanding securities of any one
issuer, including repurchase agreements with any one bank or dealer
(exclusive of securities issued or guaranteed by the United States
Government, its agencies or instrumentalities);

4. invest more than 5% of its assets in the securities of any one
issuer, other than securities issued or guaranteed by the United
States Government. However, the Fund may invest up to 25% of its
total assets in first tier securities, as defined in Rule 2a-7, of a
single issuer for a period of up to three business days after the
purchase thereof;

5. borrow money, except from banks on a temporary basis in an
aggregate amount not to exceed one-third of the Account's assets
(including the amount borrowed); the borrowings may be used
exclusively to facilitate the orderly maturation and sale of
portfolio securities during any periods of abnormally heavy
redemption requests, if they should occur; such borrowings may not
be used to purchase investments and the Account will not purchase
any investment while any such borrowing exists; immediately after
the borrowing, and at all times thereafter while any borrowing is
unrepaid, there will be asset coverage of at least 300% for all
borrowings of the Account;

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6. pledge, hypothecate or in any manner transfer, as security for
indebtedness, any securities owned or held by the Account, except as
may be necessary in connection with any borrowing mentioned above
and in an aggregate amount not to exceed 5% of the Account's assets;

7. make loans, provided that the Account may purchase money market
securities and enter into repurchase agreements;

8. (a) make investments for the purpose of exercising control; (b)
purchase securities of other investment companies, except in
connection with a merger, consolidation, acquisition or
reorganization; (c) invest in real estate (other than money market
securities secured by real estate or interests therein, or money
market securities issued by companies which invest in real estate or
interests therein), commodities or commodity contracts, interests in
oil, gas or other mineral exploration or other development programs;
(d) purchase any securities on margin; (e) make short sales of
securities or maintain a short position or write, purchase or sell
puts, calls, straddles, spreads or combinations thereof; (f) invest
in securities of issuers (other than agencies, authorities or
instrumentalities of the United States Government) having a record,
together with predecessors, of less than three years of continuous
operation if more than 5% of the Account's assets would be invested
in such securities; (g) purchase or retain securities of any issuer
if the officers and directors of the investment adviser who
individually own more than 0.5% of the outstanding securities of
such issuer together own more than 5% of the securities of such
issuer; or (h) act as an underwriter of securities;

9. invest in securities which under the 1933 Act or other securities
laws cannot be readily disposed of with registration or which are
otherwise not readily marketable at the time of purchase, including
repurchase agreements that mature in more than seven days, if as a
result more than 10% of the value of the Account's assets is
invested in these securities. At present, the Account has no
investments in these securities and has no present expectation of
purchasing any, although it may in the future; and

10. issue senior securities.

PORTFOLIO TURNOVER

A portfolio turnover rate is not applicable to Account MM which invests
only in money market instruments.

THE TRAVELERS TIMED SHORT-TERM BOND ACCOUNT FOR VARIABLE ANNUITIES

INVESTMENT RESTRICTIONS

In keeping with the objective of obtaining the highest possible current
income consistent with a high degree of liquidity and preservation of capital,
Account TSB operates under the following restrictions, which restrictions are
fundamental and may not be changed without a vote of a majority of the
outstanding voting securities of Account TSB, as defined in the 1940 Act.
Account TSB may not:

1. purchase any security which has a maturity date more than three
years from the date such security was purchased;

2. invest more than 25% of its assets in the securities of issuers
in any single industry (exclusive of securities issued by domestic
banks and savings and loan associations, or securities issued or
guaranteed by the United States Government, its agencies,
authorities or instrumentalities); neither all finance companies, as
a group, nor all utility companies, as a group, are considered a
single industry for the purpose of restriction;

3. invest more than 10% of its assets in the securities of any one
issuer, including repurchase agreements with any one bank or dealer
(exclusive of securities issued or guaranteed by the United States
Government, its agencies or instrumentalities);

4. acquire more than 10% of the outstanding securities of any one
issuer (exclusive of securities issued or guaranteed by the United
States Government, its agencies or instrumentalities);

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7. make loans, provided that the Account may purchase money market
securities and enter into repurchase agreements;

10. issue senior securities.

PORTFOLIO TURNOVER

Brokerage costs associated with short-term debt instruments are
significantly lower than those incurred on equity investments, and thus, a high
portfolio turnover rate would not adversely affect the brokerage costs of
Account TSB to the same extent as high turnover in a separate account which
invests primarily in common stock. While there is no restriction on portfolio
turnover, Account TSB's turnover rate may be high since the Account is being
timed by third party investment advisory services.

A portfolio turnover rate is not applicable to Account TSB which invests only in
short-term instruments.

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<PAGE> 155

INVESTMENT MANAGEMENT AND ADVISORY SERVICES

The investments and administration of the separate accounts are under
the direction of the Board of Managers. The Travelers Investment Management
Company (TIMCO) furnishes investment management and advisory services to
Accounts TGIS, TSB and TAS according to the terms of written Investment Advisory
Agreements. The Investment Advisory Agreements between Account TGIS and TIMCO
and Account TSB and TIMCO, were each approved by a vote of the variable annuity
contract owners at their meeting held on April 23, 1993. The Investment Advisory
Agreement between Account TAS and TIMCO was approved by a vote of the variable
annuity contract owners at their meeting held on April 23, 1993, and amended
effective May 1, 1996 by virtue of contract owner approval at a meeting held on
April 19, 1996.

Travelers Asset Management International Company LLC (TAMIC) furnishes
investment management and advisory services to Accounts GIS, QB, MM and TB
according to the terms of written Investment Advisory Agreements. The Investment
Advisory Agreements between Account QB and TAMIC, Account MM and TAMIC, and
Account TB and TAMIC, were each approved by a vote of variable annuity contract
owners at their meeting held on April 23, 1993. The Investment Adviosry
Agreement between Account GIS and TAMIC was approved by a vote of the variable
annuity contract owners at their meeting held on April 27, 1998.

The agreements between Accounts TGIS, TSB and TAS and TIMCO, and the
agreements between Accounts GIS, QB, MM and TB and TAMIC, will all continue in
effect as described below in (3), as required by the 1940 Act. Each of the
agreements:

1. provides that for investment management and advisory services, the
Company will pay to TIMCO and TAMIC, on an annual basis, an advisory
fee based on the current value of the assets of the accounts for
which TIMCO and TAMIC act as investment advisers (see "Advisory Fees"
in the prospectus);

2. may not be terminated by TIMCO or TAMIC without the prior approval of
a new investment advisory agreement by those casting a majority of
the votes entitled to be cast and will be subject to termination
without the payment of any penalty, upon sixty days written notice,
by the Board of Managers or by a vote of those casting a majority of
the votes entitled to be cast;

3. will continue in effect for a period more than two years from the
date of its execution, only so long as its continuance is
specifically approved at least annually by a vote of a majority of
the Board of Managers, or by a vote of a majority of the outstanding
voting securities of the Accounts. In addition, and in either event,
the terms of the agreements must be approved annually by a vote of a
majority of the Board of Managers who are not parties to, or
interested persons of any party to, the agreements, cast in person at
a meeting called for the purpose of voting on the approval and at
which the Board of Managers has been furnished the information that
is reasonably necessary to evaluate the terms of the agreements; and

4. will automatically terminate upon assignment.

ADVISORY FEES

The advisory fee for each Separate Account is described in the
prospectus.

The advisory fees paid to TIMCO by each of the Accounts during the last
three fiscal years were:

<TABLE>
<CAPTION>
ACCOUNT GIS ACCOUNT TSB ACCOUNT TGIS ACCOUNT TAS
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
1997 $ 2,723,508 $ 248,469 $ 631,320 $ 281,157
1998 $ 1,094,293* $ 517,425 $ 461,300 $ 256,041
1999 $ 0* $ 585,299 $ 398,256 $ 216,715
</TABLE>

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<PAGE> 156

The advisory fees paid to TAMIC by each of the Accounts during the last
three fiscal years were:

<TABLE>
<CAPTION>
ACCOUNT GIS ACCOUNT QB ACCOUNT MM ACCOUNT TB
----------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
1997 $ - 0 - $ 529,458 $ 290,557 $ 10,088
1998 $3,274,491* $ 518,262 $ 324,122 $ - 0 -
1999 $5,840,016* $ 495,204 $ 407,307 $ - 0 -
</TABLE>

*TIMCO served as investment adviser from January 1, 1998 through April 30, 1998.
Effective May 1, 1998, TIMCO became the Subadviser and TAMIC became the Adviser.
The subadvisory fee paid to TIMCO by TAMIC for Account GIS for the period May 1,
1998 through December 31, 1998 was $2,291,392 and for the year ended December
1999 was $3,895,005.

TIMCO

Investment decisions for Accounts TGIS, TSB and TAS will be made
independently from each other and from any other accounts that may be or become
managed by TIMCO. If, however, accounts managed by TIMCO are simultaneously
engaged in the purchase of the same security, then available securities may be
allocated to each account and may be averaged as to price in whatever manner
TIMCO deems to be fair. In some cases, this system might adversely affect the
price or volume of securities being bought or sold by an account, while in other
cases it may produce better executions or lower brokerage rates.

BROKERAGE

Subject to approval of the Board of Managers, and in accordance with the
Investment Advisory Agreements, TIMCO will place purchase and sale orders for
portfolio securities of the Accounts through brokerage firms which it may select
from time to time with the objective of seeking the best execution by
responsible brokerage firms at reasonably competitive rates. To the extent
consistent with this policy, certain brokerage transactions may be placed with
firms, which provide brokerage, and research services to TIMCO, and such
transactions may be paid for at higher rates than other firms would charge. The
term "brokerage and research services" includes advice as to the value of
securities; the advisability of investing in, purchasing or selling securities;
the availability of securities for purchasers or sellers of securities;
furnishing analyses and reports concerning issues, industries, securities,
economic factors and trends, portfolio strategy and performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). These brokerage and research services may be
utilized in providing investment advice to Accounts TGIS, TSB and TAS, and may
also be utilized in providing investment advice and management to all accounts
over which TIMCO exercises investment discretion, but not all of such services
will necessarily be utilized in providing investment advice to all accounts.
This practice may be expected to result in greater cost to the Accounts than
might otherwise be the case if brokers whose charges were based on execution
alone were used for such transactions. TIMCO believes that brokers' research
services are very important in providing investment advice to the Accounts, but
is unable to give the services a dollar value. While research services are not
expected to reduce the expenses of TIMCO, TIMCO will, through the use of these
services, avoid the additional expenses which would be incurred if it should
attempt to develop comparable information through its own staff.

Transactions in the over-the-counter market are placed with the
principal market makers unless better price and execution may be obtained
otherwise. Brokerage fees will be incurred in connection with futures
transactions, and Accounts TGIS and TAS will be required to deposit and maintain
funds with brokers as margin to guarantee performance of future obligations.

The overall reasonableness of brokerage commissions paid is evaluated by
personnel of TIMCO responsible for trading and managing the portfolios of
Accounts GIS, TGIS, TSB and TAS by comparing brokerage firms utilized by TIMCO
to other firms with respect to the following factors: the prices paid or
received in securities transactions, speed of execution and settlement, size and
difficulty of the brokerage transactions, the financial soundness of the firms,
and the quality, timeliness and quantity of research information and reports.

28
<PAGE> 157

The total brokerage commissions paid by Account GIS for the fiscal years
ended December 31, 1997, 1998 and 1999 were $818,411, $896,520 and $970,607,
respectively. For the fiscal year ended December 31, 1999, portfolio
transactions in the amount of $739,890,351 were directed to certain brokers
because of research services, of which $753,650 was paid in commissions with
respect to these transactions. Commissions in the amount of $25,640 and $32,490
were paid to Salomon Smith Barney Inc. and The Robinson Humphrey Company, Inc.,
respectively, both affiliates of TIMCO, which equals, for each, 2.6% and 3.3% of
Account GIS's aggregate brokerage commissions paid to such brokers during 1999.
The percentage of the Account GIS's aggregate dollar amount of transactions
involving the payment of commissions effected through Salomon Smith Barney and
Robinson Humphrey was 2.4% and 2.9% respectively.

The total brokerage commissions paid by Account TGIS for the fiscal
years ended December 31, 1997, 1998 and 1999 were $235,144, $348,258 and
$147,504, respectively. For the fiscal year ended December 31, 1999, portfolio
transactions in the amount of $113,417,544 were directed to certain brokers
because of research services, of which $123,976 were paid in commissions with
respect to these transactions. Commissions in the amount of $2,980 and $3,409
were paid to Salomon Smith Barney Inc. and The Robinson Humphrey Company, Inc.,
respectively, both affiliates of TIMCO, which equals, for each, 2.0% and 2.3% of
Account TGIS's aggregate brokerage commissions paid to such brokers during 1999.
The percentage of the Account TGIS's aggregate dollar amount of transactions
involving the payment of commissions effected through Salomon Smith Barney and
Robinson Humphrey was 1.9% and 2.3% respectively.

The total brokerage commissions paid by Account TAS for the fiscal years
ended December 31, 1997, 1998 and 1999 were $168,647, $259,177 and $165,806,
respectively. For the fiscal year ended December 31, 1999, portfolio
transactions in the amount of $87,771,361 were directed to certain brokers
because of research services, of which $130,314 were paid in commissions with
respect to these transactions. Commissions in the amount of $5,735 and $8,020
were paid to Salomon Smith Barney Inc. and The Robinson Humphrey Company, Inc.,
respectively, both affiliates of TIMCO, which equals, for each, 3.5% and 4.8% of
Account TAS's aggregate brokerage commissions paid to such brokers during 1999.
The percentage of the Account TAS's aggregate dollar amount of transactions
involving the payment of commissions effected through Salomon Smith Barney and
Robinson Humphrey was 3.4% and 3.9%, respectively.

No formulas were used in placing portfolio transactions with brokers who
provided research services, and no specific amount of transactions was allocated
for research services.

TAMIC

Investment advice and management for TAMIC's clients (Accounts GIS, QB,
MM and TB) are furnished in accordance with their respective investment
objectives and policies and investment decisions for the Accounts will be made
independently from those of any other accounts managed by TAMIC. However,
securities owned by Accounts GIS, QB, MM or TB may also be owned by other
clients and it may occasionally develop that the same investment advice and
decision for more than one client is made at the same time. Furthermore, it may
develop that a particular security is bought or sold for only some clients even
though it might be held or bought or sold for other clients, or that a
particular security is bought for some clients when other clients are selling
the security. When two or more accounts are engaged in the purchase or sale of
the same security, the transactions are allocated as to amount in accordance
with a formula which is equitable to each account. It is recognized that in some
cases this system could have a detrimental effect on the price or volume of the
security as far as Accounts GIS, QB, MM or TB are concerned. In other cases,
however, it is believed that the ability of the accounts to participate in
volume transactions will produce better executions for the accounts.

BROKERAGE

29
<PAGE> 158

possible difficult transactions in the future, and the financial strength and
stability of the broker. Such considerations are judgmental and are weighed by
management in determining the overall reasonableness of brokerage commissions
paid. Subject to the foregoing, a factor in the selection of brokers is the
receipt of research services, analyses and reports concerning issuers,
industries, securities, economic factors and trends, and other statistical and
factual information. Any such research and other statistical and factual
information provided by brokers is considered to be in addition to and not in
lieu of services required to be performed by TAMIC under its Investment Advisory
Agreements. The cost, value and specific application of such information are
indeterminable and hence are not practicably allocable among Accounts QB and TB
and other clients of TAMIC who may indirectly benefit from the availability of
such information. Similarly, Accounts QB and TB may indirectly benefit from
information made available as a result of transactions for such clients.

Purchases and sales of bonds and money market instruments will usually
be principal transactions and will normally be purchased directly from the
issuer or from the underwriter or market maker for the securities. There usually
will be no brokerage commissions paid for such purchases. Purchases from the
underwriters will include the underwriting commission or concession, and
purchases from dealers serving as market makers will include the spread between
the bid and asked prices. Where transactions are made in the over-the-counter
market, Accounts GIS, QB and TB will deal with primary market makers unless more
favorable prices are otherwise obtainable. Brokerage fees will be incurred in
connection with futures transactions, and Accounts QB and TB will be required to
deposit and maintain funds with brokers as margin to guarantee performance of
future obligations.

TAMIC may follow a policy of considering the sale of units of Account QB
and TB a factor in the selection of broker-dealers to execute portfolio
transactions, subject to the requirements of best execution described above.

The policy of TAMIC with respect to brokerage is and will be reviewed by
the Board of Managers periodically. Because of the possibility of further
regulatory developments affecting the securities exchanges and brokerage
practices generally, the foregoing practices may be changed, modified or
eliminated.

There were no brokerage commissions paid by Account QB for the fiscal
years ended December 31, 1997, 1998 and 1999. For the fiscal year ended December
31, 1999, no portfolio transactions were directed to certain brokers because of
research services.

There were no brokerage commissions paid by Account TB for the fiscal
years ended December 31, 1997, 1998 and 1999. For the fiscal year ended December
31, 1999, no portfolio transactions were directed to certain brokers because of
research services.

PORTFOLIO TRANSACTIONS

Subject to the general supervision of the Board of Managers, TAMIC is
responsible for the investment decisions and the placement of orders for
portfolio transactions of Account MM. Portfolio transactions occur primarily
with issuers, underwriters or major dealers in money market instruments acting
as principals. Such transactions are normally on a net basis and do not involve
payment of brokerage commissions. The cost of securities purchased from an
underwriter usually includes a commission paid by the issuer to the underwriter,
and transactions with dealers normally reflect the spread between the bid and
asked prices. TAMIC seeks to obtain the best net price and most favorable
execution of orders for the purchase and sale of portfolio securities.

CODE OF ETHICS. Pursuant to Rule 17j-1 of the 1940 Act, the Funds, their
investment advisers and principal underwriter have adopted codes of ethics that
permit personnel to invest in securities for their own accounts, including
securities that may be purchased or held by the funds. All personnel must place
the interest of clients first and avoid activities, interests and relationships
that might interfere with the duty to make decisions in the best interests of
the clients. All personnel securities transactions by employees must adhere to
the requirements of the codes and must be conducted in such a manner as to avoid
any actual or potential conflict of interest, the appearance of such a conflict,
or the abuse of an employee's position of trust and responsibility.

30
<PAGE> 159

VALUATION OF ASSETS

The value of the assets of each Funding Option is determined at 4:00 p.m.
eastern time on each business day, unless we need to close earlier due to an
emergency. A business day is any day the New York Stock Exchange is open. Each
security traded on a national securities exchange is valued at the last reported
sale price on the business day. If there has been no sale on that day, then the
value of the security is taken to be the mean between the reported bid and asked
prices on the business day or on the basis of quotations received from a
reputable broker or any 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 value by management at prices
which it deems in good faith to be fair.

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

NET INVESTMENT FACTOR

THE CONTRACT VALUE: The value of an Accumulation Unit on any business day is
determined by multiplying the value on the preceding business day by the net
investment factor for the valuation period just ended. The net investment factor
is used to measure the investment performance of an investment alternative from
one Valuation Period to the next. The net investment factor is determined by
dividing (a) by (b) and adding (c) to the result where:

(a) is the net result of the Valuation Period's investment income
(including, in the case of assets invested in an underlying mutual
fund, distributions whose ex-dividend date occurs during the
Valuation Period), PLUS capital gains and losses (whether realized
or unrealized), LESS any deduction for applicable taxes (presently
zero);

(b) is the value of the assets at the beginning of the Valuation Period
(or, in the case of assets invested in an underlying mutual fund,
value is based on the net asset value of the mutual fund);

(c) is the net result of 1.000, LESS the Valuation Period deduction for
the insurance charge, LESS the applicable deduction for the
investment advisory fee, and in the case of Accounts TGIS, TSB, TAS
and TB, LESS the applicable deduction for market timing fees (the
deduction for the investment advisory fee is not applicable in the
case of assets invested in an Underlying Fund, since the fee is
reflected in the net asset value of the fund).

The net investment factor may be more or less than one.

ACCUMULATION UNIT VALUE. The value of an accumulation unit on any business day
is determined by multiplying the value on the preceding business day by the net
investment factor for the business day just ended. The net investment factor is
calculated for each funding option and takes into account the investment
performance, expenses and the deduction of certain expenses.

ANNUITY UNIT VALUE. An Annuity Unit Value as of any business day is equal to (a)
the value of the Annuity Unit on the preceding business day, multiplied by (b)
the corresponding net investment factor for the business day just ended, divided
by (c) the assumed net investment factor for the valuation period. (For example,
the assumed net investment factor based on an annual assumed net investment rate
of 3.0% for a valuation period of one day is 1.000081 and, for a period of two
days, is 1.000081 x 1.000081.)

<PAGE> 160
FEDERAL TAX CONSIDERATIONS

The following description of the federal income tax consequences under
this Contract is not exhaustive and is not intended to cover all situations.
Because of the complexity of the law and the fact that the tax results will vary
according to the factual status of the individual involved, tax advice may be
needed by a person contemplating purchase of an annuity contract and by a
contract owner or beneficiary who may make elections under a contract. For
further information, please consult a qualified tax adviser.

MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS

Federal tax law generally requires that minimum annual distributions
begin by April 1st of the calendar year following the calendar year in which a
participant under a qualified plan, a Section 403(b) annuity, or an IRA attains
age 70 1/2. Distributions must also begin or be continued according to required
patterns following the death of the contract owner or the annuitant.

NONQUALIFIED ANNUITY CONTRACTS

Individuals may purchase tax-deferred annuities without tax law funding
limits. The purchase payments receive no tax benefit, deduction or deferral, but
increases in the value of the contract are generally deferred from tax until
distribution. If a nonqualified annuity is owned by other than an individual,
however, (e.g., by a corporation), the increases in value attributable to
purchase payments made after February 28, 1986 are includable in income
annually. Furthermore, for contracts issued after April 22, 1987, all deferred
increases in value will be includable in the income of a contract owner when the
contract owner transfers the contract without adequate consideration.

If two or more annuity contracts are purchased from the same insurer
within the same calendar year, distributions from any of them will be taxed
based upon the amount of income in all of the same calendar year series of
annuities. This will generally have the effect of causing taxes to be paid
sooner on the deferred gain in the contracts.

Those receiving partial distributions made before the maturity date will
generally be taxed on an income-first basis to the extent of income in the
contract. If you are exchanging another annuity contract for this annuity,
certain pre-August 14, 1982 deposits into an annuity contract that have been
placed in the contract by means of a tax-deferred exchange under Section 1035 of
the Code may be withdrawn first without income tax liability. This information
on deposits must be provided to the Company by the other insurance company at
the time of the exchange. There is income in the contract generally to the
extent the cash value exceeds the investment in the contract. The investment in
the contract is equal to the amount of premiums paid less any amount received
previously which was excludable from gross income. Any direct or indirect
borrowing against the value of the contract or pledging of the contract as
security for a loan will be treated as a cash distribution under the tax law.

The federal tax law requires that nonqualified annuity contracts meet
minimum mandatory distribution requirements upon the death of the contract
owner, including the first of joint owners. Failure to meet these requirements
will cause the surviving joint owner, or the beneficiary to lose the tax
benefits associated with annuity contracts, i.e., primarily the tax deferral
prior to distribution. The distribution required depends, among other things,
upon whether an annuity option is elected or whether the new contract owner is
the surviving spouse. Contracts will be administered by the Company in
accordance with these rules and the Company will make a notification when
payments should be commenced.

INDIVIDUAL RETIREMENT ANNUITIES

To the extent of earned income for the year and not exceeding $2,000 per
individual, an individual may make deductible contributions to an individual
retirement annuity (IRA). There are certain limits on the deductible amount
based on the adjusted gross income of the individual and spouse and based on
their participation in a retirement plan. If an individual is married and the
spouse does not have earned income, the individual may establish IRAs for the
individual and spouse. Purchase payments may then be made annually into IRAs for
both spouses in the maximum amount of 100% of earned income up to a combined
limit of $4,000.

The Code provides for the purchase of a Simplified Employee Pension
(SEP) plan. A SEP is funded through an IRA with an annual employer contribution
limit of 15% of compensation up to $30,000 for each participant.

SIMPLE Plan IRA Form

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<PAGE> 161

Effective January 1, 1997, employers may establish a savings incentive
match plan for employees ("SIMPLE plan") under which employees can make elective
salary reduction contributions to an IRA based on a percentage of compensation
of up to $6,000. (Alternatively, the employer can establish a SIMPLE cash or
deferred arrangement under IRS Section 401(k)). Under a SIMPLE plan IRA, the
employer must either make a matching contribution of 100% on the first 3% or 7%
contribution for all eligible employees. Early withdrawals are subject to the
10% early withdrawal penalty generally applicable to IRAs, except that an early
withdrawal by an employee under a SIMPLE plan IRA, within the first two years of
participation, shall be subject to a 25% early withdrawal tax.

ROTH IRAS

Effective January 1, 1998, Section 408A of the Code permits certain
individuals to contribute to a Roth IRA. Eligibility to make contributions is
based upon income, and the applicable limits vary based on marital status and/or
whether the contribution is a rollover contribution from another IRA or an
annual contribution. Contributions to a Roth IRA, which are subject to certain
limitations, ($2,000 per year for annual contributions), are not deductible and
must be made in cash or as a rollover or transfer from another Roth IRA or other
IRA. A conversion of a "traditional" IRA to a Roth IRA may be subject to tax and
other special rules apply. You should consult a tax adviser before combining any
converted amounts with other Roth IRA contributions, including any other
conversion amounts from other tax years.

Qualified distributions from a Roth IRA are tax-free. A qualified
distribution requires that the Roth IRA has been held for at least 5 years, and
the distribution is made after age 59 1/2, on death or disability of the owner,
or for a limited amount ($10,000) for a qualified first time home purchase for
the owner or certain relatives. Income tax and a 10% penalty tax may apply to
distributions made (1) before age 59 1/2 (subject to certain exceptions) or (2)
during five taxable years starting with the year in which the first contribution
is made to the Roth IRA.

QUALIFIED PENSION AND PROFIT-SHARING PLANS

Under a qualified pension or profit-sharing plan, purchase payments made
by an employer are not currently taxable to the participant and increases in the
value of a contract are not subject to taxation until received by a participant
or beneficiary.

Distributions are taxable to the participant or beneficiary as ordinary
income in the year of receipt. Any distribution that is considered the
participant's "investment in the contract" is treated as a return of capital and
is not taxable. Certain lump-sum distributions may be eligible for special
forward averaging tax treatment for certain classes of individuals.

FEDERAL INCOME TAX WITHHOLDING

The portion of a distribution which is taxable income to the recipient
will be subject to federal income tax withholding as follows:

1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(b) PLANS OR ARRANGEMENTS OR
FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS

There is a mandatory 20% tax withholding for plan distributions that are
eligible for rollover to an IRA or to another retirement plan but that are not
directly rolled over. A distribution made directly to a participant or
beneficiary may avoid this result if:

(a) a periodic settlement distribution is elected based upon a life or life
expectancy calculation, or

(b) a term-for-years settlement distribution is elected for a period of ten
years or more, payable at least annually, or

(c) a minimum required distribution as defined under the tax law is taken
after the attainment of the age of 70 1/2 or as otherwise required by
law.

A distribution including a rollover that is not a direct rollover will
be subject to the 20% withholding, and a 10% additional tax penalty may apply to
any amount not added back in the rollover. The 20% withholding may be recovered
when the participant or beneficiary files a personal income tax return for the
year if a rollover was completed within 60 days of receipt of the funds, except
to the extent that the participant or spousal beneficiary is otherwise
underwithheld or short on estimated taxes for that year.

33
<PAGE> 162

2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS)

To the extent not described as requiring 20% withholding in 1 above, the
portion of a non-periodic distribution which constitutes taxable income will be
subject to federal income tax withholding, if the aggregate distributions exceed
$200 for the year, unless the recipient elects not to have taxes withheld. If no
such election is made, 10% of the taxable distribution will be withheld as
federal income tax. Election forms will be provided at the time distributions
are requested. This form of withholding applies to all annuity programs.

3. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN ONE
YEAR)

The portion of a periodic distribution which constitutes taxable income will
be subject to federal income tax withholding under the wage withholding tables
as if the recipient were married claiming three exemptions. A recipient may
elect not to have income taxes withheld or have income taxes withheld at a
different rate by providing a completed election form. Election forms will be
provided at the time distributions are requested. This form of withholding
applies to all annuity programs. As of January 1, 2000, a recipient receiving
periodic payments (e.g., monthly or annual payments under an annuity option)
which total $14,850 or less per year, will generally be exempt from periodic
withholding.

Recipients who elect not to have withholding made are liable for payment
of federal income tax on the taxable portion of the distribution. All recipients
may also be subject to penalties under the estimated tax payment rules if
withholding and estimated tax payments are not sufficient to cover tax
liabilities.

Recipients who do not provide a social security number or other taxpayer
identification number will not be permitted to elect out of withholding.
Additionally, U.S citizens residing outside of the country, or U.S. legal
residents temporarily residing outside the country, are not permitted to elect
out of withholding.

PERFORMANCE INFORMATION

From time to time, the Company may advertise several types of historical
performance for Accounts GIS, QB, MM, TGIS, TSB, TAS, TB and the Funding Options
of Fund U.

STANDARDIZED METHOD. Quotations of average annual total returns are
computed according to a formula in which a hypothetical initial investment of
$1,000 is applied to an Account or Funding Option, and then related to ending
redeemable values over one-, five-, and ten-year periods, or for a period
covering the time during which the Funding Option has been in existence, if
less. If a Funding Option has been in existence for less than one year, the
"since inception" total return performance quotations are year-to-date and are
not average annual total returns. These quotations reflect the deduction of all
recurring charges during each period (on a pro rata basis in the case of
fractional periods). The deduction for the annual contract administrative charge
is converted to a percentage of assets based on the actual fee collected,
divided by the average net assets for contracts sold under the Prospectus to
which this Statement of Additional Information relates. Each quotation assumes a
total redemption at the end of each period with the assessment of any applicable
withdrawal charge at that time. For Accounts TGIS, TSB, TAS and TB, market
timing fees are included in expenses in the calculation of performance for
periods on or after May 1, 1990, the date on which the market timing fee became
a charge against the daily assets of the timed accounts. The performance for
periods prior to May 1, 1990 does not reflect the deduction of the market-timing
fee.

NONSTANDARDIZED METHOD. Nonstandardized "total returns" will be
calculated in a similar manner based on the performance of the Funding Options
over a period of time, usually for the calendar year-to-date, and for the past
one-, three-, five- and ten-year periods. Nonstandardized total returns will not
reflect the deduction of any applicable withdrawal charge or the annual contract
administrative charge, which, if reflected, would decrease the level of
performance shown. The withdrawal charge is not reflected because the Contract
is designed for long-term investment.

For funding options that were in existence before they became available
under Fund U, the nonstandardized average total return quotations will reflect
the investment performance that such funding options would have achieved
(reduced by the applicable charges) had they been held available under the
Contract for the period quoted. The total return quotations are based upon
historical earnings and are not necessarily representative of future
performance.

34
<PAGE> 163

TOTAL RETURN QUOTATIONS FOR TIMED ACCOUNTS. Because Accounts TGIS, TSB,
TAS and TB are primarily available to Contract Owners who have entered into
third party market timing services agreements, the Accounts may experience wide
fluctuations in assets over a given time period. Consequently, performance data
computed according to both the standardized and nonstandardized methods for
Accounts TGIS, TSB, TAS and TB may not always be useful in evaluating the
performance of these Accounts. In addition, performance data for Accounts TGIS,
TSB, TAS and TB alone will not generally be useful to the purchase of evaluating
the performance of a market timing strategy that uses these Accounts.

GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including, but not limited to, the Dow Jones Industrial
Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman
Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value
Line Index, and the Morgan Stanley Capital International's EAFE Index).
Advertisements may also include published editorial comments and performance
rankings compiled by independent organizations (including, but not limited to,
Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that
monitor the performance of Fund U and the Funding Options.

Average annual total returns of each managed Separate Account computed
according to the standardized and non-standardized methods for the periods ended
December 31, 1999 are set forth in the following tables.

35
<PAGE> 164

36
<PAGE> 165

<TABLE>
<CAPTION>
TRAVELERS UNIVERSAL ANNUITY
STANDARDIZED PERFORMANCE UPDATE AS OF 12/31/99
- ----------------------------------------------------------------------------------------------------------------------------
STOCK ACCOUNTS: 1 Year 5 Year 10 Year (or inception)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alliance Growth Portfolio 25.43% - 28.53% 2/13/95
- ----------------------------------------------------------------------------------------------------------------------------
American Odyssey Core Equity Fund -6.59% 18.77% 13.69% 6/1/93
- ----------------------------------------------------------------------------------------------------------------------------
American Odyssey Emerging Opportunities Fund 29.83% 9.07% 9.31% 5/18/93
- ----------------------------------------------------------------------------------------------------------------------------
American Odyssey International Equity Fund 25.69% 16.14% 13.27% 5/17/93
- ----------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund (Janus) 46.41% 38.25% 22.60%
- ----------------------------------------------------------------------------------------------------------------------------
Dreyfus Small Cap Portfolio 16.45% - -0.38% 5/8/98
- ----------------------------------------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund 13.93% 25.89% 17.50% 1/28/92
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Equity Income Portfolio -0.16% 16.41% 14.34% 7/21/93
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio 30.54% 27.55% 19.10% 1/28/92
- ----------------------------------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 60.44% - 18.28% 2/17/95
- ----------------------------------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio -6.27% - 14.28% 2/24/95
- ----------------------------------------------------------------------------------------------------------------------------
Social Awareness Stock Portfolio (Smith Barney) 9.23% 23.38% 16.13% 5/1/92
- ----------------------------------------------------------------------------------------------------------------------------
Templeton Global Stock Fund 22.31% 15.33% 13.46% 1/27/92
- ----------------------------------------------------------------------------------------------------------------------------
Travelers Disciplined Mid Cap Stock Portfolio 6.89% - 6.68% 5/8/98
- ----------------------------------------------------------------------------------------------------------------------------
Utilities Portfolio (Smith Barney) -6.42% 13.29% 11.21% 2/4/94
- ----------------------------------------------------------------------------------------------------------------------------
BOND ACCOUNTS:
- ----------------------------------------------------------------------------------------------------------------------------
American Odyssey Global High-Yield Bond Fund 4.13% - -1.77% 5/1/98
- ----------------------------------------------------------------------------------------------------------------------------
American Odyssey Intermediate-Term Bond Fund -4.94% 4.87% 3.48% 6/1/93
- ----------------------------------------------------------------------------------------------------------------------------
American Odyssey Long-Term Bond Fund -8.91% 5.77% 4.43% 6/1/93
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio 1.64% 8.60% 9.10% 2/14/92
- ----------------------------------------------------------------------------------------------------------------------------
Putnam Diversified Income Portfolio -5.30% - 4.08% 3/3/95
- ----------------------------------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio -3.85% - 6.55% 3/6/95
- ----------------------------------------------------------------------------------------------------------------------------
Templeton Global Bond Fund -11.84% 3.05% 3.08% 1/28/92
- ----------------------------------------------------------------------------------------------------------------------------
Travelers High Yield Bond Trust -2.05% 9.45% 7.94%
- ----------------------------------------------------------------------------------------------------------------------------
Travelers U.S. Government Securities Portfolio -10.23% 6.19% 4.71% 1/28/92
- ----------------------------------------------------------------------------------------------------------------------------
BALANCED ACCOUNTS:
- ----------------------------------------------------------------------------------------------------------------------------
Fidelity VIP II Asset Manager Portfolio 4.54% 13.41% 10.79% 1/28/92
- ----------------------------------------------------------------------------------------------------------------------------
MFS Total Return Portfolio -3.81% - 12.29% 2/17/95
- ----------------------------------------------------------------------------------------------------------------------------
Templeton Global Asset Allocation Fund 16.15% 14.88% 12.51% 1/27/92
- ----------------------------------------------------------------------------------------------------------------------------
Travelers Managed Assets Trust 7.63% 17.27% 11.20%
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>

THE INCEPTION DATE USED TO CALCULATE STANDARDIZED PERFORMANCE IS BASED ON THE
DATE THAT THE INVESTMENT OPTION BECAME ACTIVE UNDER THE PRODUCT.

37
<PAGE> 166

TRAVELERS UNIVERSAL ANNUITY
NONSTANDARDIZED PERFORMANCE UPDATE AS OF 12/31/99

<TABLE>
<CAPTION>
CUMULATIVE RETURNS
-----------------------------------------
YTD 1 YR 3YR 5YR 10YR
- -------------------------------------------------------------------------------------------------
STOCK ACCOUNTS:
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Growth Portfolio 30.62% 30.62% 112.16% 260.93% -
- -------------------------------------------------------------------------------------------------
American Odyssey Core Equity Fund -1.52% -1.52% 46.19% 143.29% -
- -------------------------------------------------------------------------------------------------
American Odyssey Emerging Opportunities Fund 35.02% 35.02% 28.62% 60.66% -
- -------------------------------------------------------------------------------------------------
American Odyssey International Equity Fund 30.88% 30.88% 54.11% 117.99% -
- -------------------------------------------------------------------------------------------------
Capital Appreciation Fund (Janus) 51.62% 51.62% 201.53% 414.12% 690.55%
- -------------------------------------------------------------------------------------------------
Dreyfus Small Cap Portfolio 21.63% 21.63% 34.26% 97.59% -
- -------------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund 19.11% 19.11% 98.06% 223.74% 350.18%
- -------------------------------------------------------------------------------------------------
Fidelity VIP Equity Income Portfolio 5.01% 5.01% 46.47% 120.52% 241.41%
- -------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio 35.74% 35.74% 128.05% 245.33% 443.82%
- -------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 65.66% 65.66% 76.52% 125.31% -
- -------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio -1.18% -1.18% 34.05% 108.41% -
- -------------------------------------------------------------------------------------------------
Social Awareness Stock Portfolio (Smith Barney) 14.40% 14.40% 87.85% 193.20% -
- -------------------------------------------------------------------------------------------------
Templeton Global Stock Fund 27.50% 27.50% 40.87% 110.66% 214.96%
- -------------------------------------------------------------------------------------------------
Travelers Disciplined Mid Cap Stock Portfolio 12.06% 12.06% - - -
- -------------------------------------------------------------------------------------------------
Utilities Portfolio (Smith Barney) -1.32% -1.32% 42.57% 93.19% -
- -------------------------------------------------------------------------------------------------
BOND ACCOUNTS:
- -------------------------------------------------------------------------------------------------
American Odyssey Global High-Yield Bond Fund 9.31% 9.31% - - -
- -------------------------------------------------------------------------------------------------
American Odyssey Intermediate-Term Bond Fund 0.24% 0.24% 14.01% 32.92% -
- -------------------------------------------------------------------------------------------------
American Odyssey Long-Term Bond Fund -3.95% -3.95% 14.46% 38.47% -
- -------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio 6.81% 6.81% 17.28% 57.31% 185.53%
- -------------------------------------------------------------------------------------------------
Putnam Diversified Income Portfolio -0.15% -0.15% 5.58% 30.83% -
- -------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio 1.32% 1.32% 13.01% 48.52% -
- -------------------------------------------------------------------------------------------------
Templeton Global Bond Fund -7.04% -7.04% -0.39% 22.19% 58.12%
- -------------------------------------------------------------------------------------------------
Travelers High Yield Bond Trust 3.13% 3.13% 24.93% 63.34% 124.96%
- -------------------------------------------------------------------------------------------------
Travelers U.S. Government Securities Portfolio -5.34% -5.34% 14.61% 41.15% -
- -------------------------------------------------------------------------------------------------
BALANCED ACCOUNTS:
- -------------------------------------------------------------------------------------------------
Fidelity VIP II Asset Manager Portfolio 9.71% 9.71% 48.54% 94.18% 203.34%
- -------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 1.36% 1.36% 33.78% 87.72% -
- -------------------------------------------------------------------------------------------------
Templeton Global Asset Allocation Fund 21.34% 21.34% 45.48% 106.68% 201.56%
- -------------------------------------------------------------------------------------------------
Travelers Managed Assets Trust 12.81% 12.81% 62.10% 128.63% 201.20%
- -------------------------------------------------------------------------------------------------

<CAPTION>
AVERAGE ANNUAL RETURNS
----------------------------------------
3YR 5YR 10YR Inception*
- ------------------------------------------------------------------------------------------------
STOCK ACCOUNTS:
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Alliance Growth Portfolio 28.50% 29.25% - 27.15% 6/20/94
- ------------------------------------------------------------------------------------------------
American Odyssey Core Equity Fund 13.49% 19.45% - 14.08% 5/1/93
- ------------------------------------------------------------------------------------------------
American Odyssey Emerging Opportunities Fund 8.75% 9.94% - 9.90% 5/1/93
- ------------------------------------------------------------------------------------------------
American Odyssey International Equity Fund 15.51% 16.86% - 13.76% 5/1/93
- ------------------------------------------------------------------------------------------------
Capital Appreciation Fund (Janus) 44.47% 38.72% 22.95% 14.23% 5/16/83
- ------------------------------------------------------------------------------------------------
Dreyfus Small Cap Portfolio 10.32% 14.58% - 34.05% 8/31/90
- ------------------------------------------------------------------------------------------------
Dreyfus Stock Index Fund 25.58% 26.47% 16.23% 16.00% 9/30/89
- ------------------------------------------------------------------------------------------------
Fidelity VIP Equity Income Portfolio 13.57% 17.13% 13.06% 12.36% 10/9/86
- ------------------------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio 31.63% 28.11% 18.44% 17.29% 10/9/86
- ------------------------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 20.85% 17.63% - 14.84% 6/20/94
- ------------------------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 10.26% 15.81% - 13.80% 6/20/94
- ------------------------------------------------------------------------------------------------
Social Awareness Stock Portfolio (Smith Barney) 23.39% 23.99% - 16.61% 5/1/92
- ------------------------------------------------------------------------------------------------
Templeton Global Stock Fund 12.10% 16.06% 12.15% 12.09% 8/31/88
- ------------------------------------------------------------------------------------------------
Travelers Disciplined Mid Cap Stock Portfolio - - - 21.87% 4/1/97
- ------------------------------------------------------------------------------------------------
Utilities Portfolio (Smith Barney) 12.55% 14.07% - 11.90% 2/4/94
- ------------------------------------------------------------------------------------------------
BOND ACCOUNTS:
- ------------------------------------------------------------------------------------------------
American Odyssey Global High-Yield Bond Fund - - - 1.39% 5/1/98
- ------------------------------------------------------------------------------------------------
American Odyssey Intermediate-Term Bond Fund 4.47% 5.85% - 4.25% 5/1/93
- ------------------------------------------------------------------------------------------------
American Odyssey Long-Term Bond Fund 4.60% 6.72% - 5.15% 5/1/93
- ------------------------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio 5.46% 9.48% 11.06% 9.52% 9/19/85
- ------------------------------------------------------------------------------------------------
Putnam Diversified Income Portfolio 1.83% 5.52% - 5.13% 6/20/94
- ------------------------------------------------------------------------------------------------
Smith Barney High Income Portfolio 4.16% 8.02% - 7.17% 6/22/94
- ------------------------------------------------------------------------------------------------
Templeton Global Bond Fund -0.13% 4.09% 4.69% 4.82% 8/31/88
- ------------------------------------------------------------------------------------------------
Travelers High Yield Bond Trust 7.70% 10.31% 8.44% 7.89% 5/16/83
- ------------------------------------------------------------------------------------------------
Travelers U.S. Government Securities Portfolio 4.65% 7.13% - 5.39% 1/28/92
- ------------------------------------------------------------------------------------------------
BALANCED ACCOUNTS:
- ------------------------------------------------------------------------------------------------
Fidelity VIP II Asset Manager Portfolio 14.10% 14.19% 11.73% 11.39% 9/6/89
- ------------------------------------------------------------------------------------------------
MFS Total Return Portfolio 10.19% 13.42% - 11.61% 6/20/94
- ------------------------------------------------------------------------------------------------
Templeton Global Asset Allocation Fund 13.31% 15.62% 11.66% 11.55% 8/31/88
- ------------------------------------------------------------------------------------------------
Travelers Managed Assets Trust 17.47% 17.97% 11.65% 10.20% 5/16/83
- ------------------------------------------------------------------------------------------------

<CAPTION>
CALENDAR YEAR RETURNS
------------------------
1998 1997 1996
- --------------------------------------------------------------------------------
STOCK ACCOUNTS:
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Alliance Growth Portfolio 27.43% 27.47% 27.77%
- --------------------------------------------------------------------------------
American Odyssey Core Equity Fund 14.11% 30.09% 21.61%
- --------------------------------------------------------------------------------
American Odyssey Emerging Opportunities Fund -9.79% 5.59% -4.36%
- --------------------------------------------------------------------------------
American Odyssey International Equity Fund 13.47% 3.76% 20.36%
- --------------------------------------------------------------------------------
Capital Appreciation Fund (Janus) 59.63% 24.58% 26.60%
- --------------------------------------------------------------------------------
Dreyfus Small Cap Portfolio -4.27% 15.31% 15.15%
- --------------------------------------------------------------------------------
Dreyfus Stock Index Fund 26.62% 31.32% 21.00%
- --------------------------------------------------------------------------------
Fidelity VIP Equity Income Portfolio 10.24% 26.52% 12.85%
- --------------------------------------------------------------------------------
Fidelity VIP Growth Portfolio 37.76% 21.95% 13.27%
- --------------------------------------------------------------------------------
Smith Barney International Equity Portfolio 5.14% 1.35% 16.18%
- --------------------------------------------------------------------------------
Smith Barney Large Cap Value Portfolio 8.46% 25.07% 18.31%
- --------------------------------------------------------------------------------
Social Awareness Stock Portfolio (Smith Barney) 30.63% 25.70% 18.47%
- --------------------------------------------------------------------------------
Templeton Global Stock Fund 0.00% 10.49% 20.89%
- --------------------------------------------------------------------------------
Travelers Disciplined Mid Cap Stock Portfolio 15.49% - -
- --------------------------------------------------------------------------------
Utilities Portfolio (Smith Barney) 16.77% 23.74% 6.12%
- --------------------------------------------------------------------------------
BOND ACCOUNTS:
- --------------------------------------------------------------------------------
American Odyssey Global High-Yield Bond Fund - - -
- --------------------------------------------------------------------------------
American Odyssey Intermediate-Term Bond Fund 7.13% 6.17% 2.63%
- --------------------------------------------------------------------------------
American Odyssey Long-Term Bond Fund 7.69% 10.66% 0.04%
- --------------------------------------------------------------------------------
Fidelity VIP High Income Portfolio -5.52% 16.21% 12.61%
- --------------------------------------------------------------------------------
Putnam Diversified Income Portfolio -0.58% 6.36% 6.89%
- --------------------------------------------------------------------------------
Smith Barney High Income Portfolio -0.80% 12.44% 11.75%
- --------------------------------------------------------------------------------
Templeton Global Bond Fund 5.84% 1.23% 8.08%
- --------------------------------------------------------------------------------
Travelers High Yield Bond Trust 5.23% 15.12% 14.60%
- --------------------------------------------------------------------------------
Travelers U.S. Government Securities Portfolio 8.84% 11.24% 0.18%
- --------------------------------------------------------------------------------
BALANCED ACCOUNTS:
- --------------------------------------------------------------------------------
Fidelity VIP II Asset Manager Portfolio 13.62% 19.15% 13.17%
- --------------------------------------------------------------------------------
MFS Total Return Portfolio 10.28% 19.69% 13.02%
- --------------------------------------------------------------------------------
Templeton Global Asset Allocation Fund 5.09% 14.09% 17.38%
- --------------------------------------------------------------------------------
Travelers Managed Assets Trust 19.94% 19.81% 12.36%
- --------------------------------------------------------------------------------
</TABLE>

*The inception date reflects the date the underlying fund began operating.

38
<PAGE> 167

TRAVELERS UNIVERSAL ANNUITY
MANAGED SEPARATE ACCOUNTS
STANDARDIZED PERFORMANCE UPDATE AS OF 12/31/99

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
MANAGED SEPARATE ACCOUNTS: 1 Year 5 Year 10 Year or Inception* Inception Date*
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Travelers Growth and Income Stock Account 16.54% 27.06% 15.63%
- ------------------------------------------------------------------------------------------------------------------------------------
Travelers Quality Bond Account -4.39% 5.36% 5.84%
- ------------------------------------------------------------------------------------------------------------------------------------
Travelers Money Market Account -1.46% 3.00% 3.24%
- ------------------------------------------------------------------------------------------------------------------------------------
Travelers Timed Growth and Income Stock Account 15.77% 25.05% 13.71% (1/88)
- ------------------------------------------------------------------------------------------------------------------------------------
Travelers Timed Short-Term Bond Account -2.72% 1.93% 2.11% (11/87)
- ------------------------------------------------------------------------------------------------------------------------------------
Travelers Timed Aggressive Stock Account 9.03% 19.91% 13.56% (12/87)
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

* The inception date used to calculate standardized performance is based on the
date that the investment option became active under the Separate Account.

TRAVELERS UNIVERSAL ANNUITY
MANAGED SEPARATE ACCOUNTS
NONSTANDARDIZED PERFORMANCE UPDATE AS OF 12/31/99

<TABLE>
<CAPTION>
CUMULATIVE RETURNS
-----------------------------------
1 Year 3 Years 5 Years 10 Years
- ------------------------------------------------------------------------------------------------
Travelers Growth and Income Stock Account 21.73% 106.10% 238.80% 342.35%
- ------------------------------------------------------------------------------------------------
Travelers Quality Bond Account 0.78% 14.83% 35.92% 85.68%
- ------------------------------------------------------------------------------------------------
Travelers Money Market Account 3.72% 12.32% 21.92% 45.99%
- ------------------------------------------------------------------------------------------------
Travelers Timed Growth and Income Stock Account 20.72% 98.65% 218.33% 272.74%
- ------------------------------------------------------------------------------------------------
Travelers Timed Short-Term Bond Account 2.46% 8.20% 13.94% 28.18%
- ------------------------------------------------------------------------------------------------
Travelers Timed Aggressive Stock Account 11.87% 66.61% 156.20% 267.74%
- ------------------------------------------------------------------------------------------------

<CAPTION>
AVERAGE ANNUAL RETURNS
----------------------------------------------
3 Years 5 Years 10 Years Inception*
- -----------------------------------------------------------------------------------------------------------
Travelers Growth and Income Stock Account 27.26% 27.62% 16.02% 13.73% (5/16/83)
- -----------------------------------------------------------------------------------------------------------
Travelers Quality Bond Account 4.72% 6.33% 6.38% 7.36% (5/16/83)
- -----------------------------------------------------------------------------------------------------------
Travelers Money Market Account 3.95% 4.04% 3.85% 5.05% (5/16/83)
- -----------------------------------------------------------------------------------------------------------
Travelers Timed Growth and Income Stock Account 25.69% 25.57% 14.05% 15.10% (1/88)
- -----------------------------------------------------------------------------------------------------------
Travelers Timed Short-Term Bond Account 2.66% 2.60% 2.51% 3.25% (11/87)
- -----------------------------------------------------------------------------------------------------------
Travelers Timed Aggressive Stock Account 18.55% 20.32% 13.90% 13.06% (12/87)
- -----------------------------------------------------------------------------------------------------------

<CAPTION>
CALENDAR YEAR RETURNS
--------------------------
1998 1997 1996
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Travelers Growth and Income Stock Account 28.73% 31.52% 21.37%
- ---------------------------------------------------------------------------------------
Travelers Quality Bond Account 6.90% 6.58% 3.38%
- ---------------------------------------------------------------------------------------
Travelers Money Market Account 4.03% 4.10% 3.94%
- ---------------------------------------------------------------------------------------
Travelers Timed Growth and Income Stock Account 26.72% 29.80% 20.03%
- ---------------------------------------------------------------------------------------
Travelers Timed Short-Term Bond Account 2.71% 2.81% 2.07%
- ---------------------------------------------------------------------------------------
Travelers Timed Aggressive Stock Account 15.27% 29.19% 16.43%
- ---------------------------------------------------------------------------------------
</TABLE>

* The inception date is the date that the underlying fund commenced operations

39
<PAGE> 168
TRAVELERS UNIVERSAL ANNUITY CHART PROGRAM
STANDARDIZED PERFORMANCE UPDATE AS OF 12/31/99

<TABLE>
<CAPTION>
----------------------------------
1 YR 5 YR 10 YR or Inception
-------------------------------------------------------------------------------------------------------------
STOCK ACCOUNTS:
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
American Odyssey Core Equity Fund -7.78% - 12.16% 6/1/1993
-------------------------------------------------------------------------------------------------------------
American Odyssey Emerging Opportunities Fund 28.20% - 7.93% 5/18/1993
-------------------------------------------------------------------------------------------------------------
American Odyssey International Equity Fund 24.08% - 11.78% 5/17/1993
-------------------------------------------------------------------------------------------------------------
BOND ACCOUNTS
-------------------------------------------------------------------------------------------------------------
American Odyssey Global High -Yield Bond Fund 2.78% - -3.14% 5/1/1998
-------------------------------------------------------------------------------------------------------------
American Odyssey Intermediate-Term Bond Fund -6.12% - 2.10% 6/1/1993
-------------------------------------------------------------------------------------------------------------
American Odyssey Long-Term Bond Fund -10.04% - 3.02% 6/1/1993
-------------------------------------------------------------------------------------------------------------
</TABLE>

TRAVELERS UNIVERSAL ANNUITY CHART PROGRAM
NONSTANDARDIZED PERFORMANCE UPDATE AS OF 12/31/99

<TABLE>
<CAPTION>
CUMULATIVE RETURNS AVERAGE ANNUAL RETURNS
----------------------------------------- ----------------------------------------
YTD 1 YR 3YR 5YR 10YR 3YR 5YR 10YR Inception
- ----------------------------------------------------------------------------------------- ----------------------------------------
STOCK ACCOUNTS `
- ----------------------------------------------------------------------------------------- ----------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
American Odyssey Core Equity Fund -2.76% -2.76% 40.75% 128.44% - 12.07% 17.94% - 12.64% 5/1/93
- ----------------------------------------------------------------------------------------- ----------------------------------------
American Odyssey Emerging Opportunities Fund 33.41% 33.41% 23.96% 51.03% - 7.42% 8.59% - 8.58% 5/1/93
- ----------------------------------------------------------------------------------------- ----------------------------------------
American Odyssey International Equity Fund 29.30% 29.30% 48.47% 104.85% - 14.08% 15.40% - 12.34% 5/1/93
- ----------------------------------------------------------------------------------------- ----------------------------------------
BOND ACCOUNTS
- ----------------------------------------------------------------------------------------- ----------------------------------------
American Odyssey Global High -Yield Bond Fund 7.96% 7.96% - - - - - - 0.08% 5/1/98
- ----------------------------------------------------------------------------------------- ----------------------------------------
American Odyssey Intermediate-Term Bond Fund -1.01% -1.01% 9.82% 24.87% - 3.17% 4.54% - 2.93% 5/1/93
- ----------------------------------------------------------------------------------------- ----------------------------------------
American Odyssey Long-Term Bond Fund -5.14% -5.14% 10.24% 30.08% - 3.30% 5.39% - 3.83% 5/1/93
- ----------------------------------------------------------------------------------------- ----------------------------------------

<CAPTION>
CALENDAR YEAR RETURNS
------------------------
1998 1997 1996
- ------------------------------------------------------------------------
<C> <C> <C> <C>
STOCK ACCOUNTS
- ------------------------------------------------------------------------
American Odyssey Core Equity Fund -2.76% 12.68% 28.46%
- ------------------------------------------------------------------------
American Odyssey Emerging Opportunities Fund 33.41% -10.90% 4.28%
- ------------------------------------------------------------------------
American Odyssey International Equity Fund 29.30% 12.06% 2.47%
- ------------------------------------------------------------------------
BOND ACCOUNTS
- ------------------------------------------------------------------------
American Odyssey Global High -Yield Bond Fund 7.96% - -
- ------------------------------------------------------------------------
American Odyssey Intermediate-Term Bond Fund -1.01% 5.80% 4.85%
- ------------------------------------------------------------------------
American Odyssey Long-Term Bond Fund -5.14% 6.35% 9.28%
- ------------------------------------------------------------------------
</TABLE>

40
<PAGE> 169

THE BOARD OF MANAGERS

The investments and administration of each of the Separate Accounts are
under the direction of the Board of Managers, listed below. Members of the Board
of Managers of Accounts GIS, QB, MM, TGIS, TSB, TAS and TB are elected annually
by those Contract Owners participating in the Separate Accounts. A majority of
the members of the Board of Managers are persons who are not affiliated with The
Travelers Insurance Company, TIMCO, TAMIC or their affiliates.

TRUSTEES AND OFFICERS

Under Massachusetts law, the Fund's Board has absolute and exclusive control
over the management and disposition of all the Fund's assets. Subject to the
provisions of its Declaration of Trust, the Fund's business and affairs are
managed by the trustees or other parties so designated by the trustees. The
Fund's trustees and officers are listed below.

<TABLE>
<CAPTION>
Name and Position
With the Fund Principal Occupation During Last Five Years
- ---------------- -------------------------------------------
<S> <C>
*Heath B. McLendon Managing Director (1993-present), Salomon Smith Barney, Inc.
Chairman and Trustee ("Salomon Smith Barney"); President and Director (1994-present),
7 World Trade Center SSB Citi Fund Management LLC; (successor to SSBC Fund Management
New York, NY Inc.); Director and President (1996-present),
Age 66 Travelers Investment Adviser, Inc.; Chairman and Director of sixty
investment companies associated with Salomon Smith Barney; Trustee
(1999) of 6 Trusts of Citifunds' family of Trusts; Trustee, Drew
University; Advisory Director, M&T Bank; Board of Managers, seven
Variable Annuity Separate Accounts of The Travelers Insurance
Company+; Chairman, Board of Trustees, five Mutual Funds sponsored
by The Travelers Insurance Company++; prior to July 1993, Senior
Executive Vice President of Shearson Lehman Brothers Inc.

Knight Edwards Of Counsel (1988-present), Partner (1956-1988), Edwards & Angell,
Trustee Attorneys; Member, Advisory Board (1973-1994), thirty-one
154 Arlington Avenue mutual funds sponsored by Keystone Group, Inc.; Member, Board of
Providence, RI Managers, seven Variable Annuity Separate Accounts of The
Age 76 Travelers Insurance Company+; Trustee, five Mutual Funds
sponsored by The Travelers Insurance Company.++

Robert E. McGill, III Retired manufacturing executive. Director (1983-1995), Executive
Trustee Vice President (1989-1994) and Senior Vice President, Finance and
295 Hancock Street Administration (1983-1989), The Dexter Corporation (manufacturer
Williamstown, MA of specialty chemicals and materials); Vice Chairman (1990-1992),
Age 68 Director (1983-1995), Life Technologies, Inc. (life
science/biotechnology products); Director, (1994-1999), The
Connecticut Surety Corporation (insurance); Director
(1995-present), Chemfab Corporation (specialty materials
manufacturer); Director (1999-present), Ravenwood Winery, Inc.;
Director (1999-present), Lydall Inc. (manufacturer of fiber
materials); Member, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Trustee,
five Mutual Funds sponsored by The Travelers Insurance Company.++

Lewis Mandell Dean, School of Management (1998-present), University at Buffalo;
Trustee Dean, College of Business Administration (1995-1998), Marquette
160 Jacobs Hall University; Professor of Finance (1980-1995) and Associate Dean
Buffalo, NY (1993-1995), School of Business Administration, and Director,
Age 57 Center for Research and Development in Financial Services
(1980-1995), University of Connecticut; Director (2000-present),
Delaware North Corp. (hospitality business); Director
(1992-present), GZA Geoenvironmental Tech, Inc. (engineering
services); Member, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Trustee,
five Mutual Funds sponsored by The Travelers Insurance Company.++

Name and Position
</TABLE>
41
<PAGE> 170

<TABLE>
<CAPTION>
With the Fund Principal Occupation During Last Five Years
- ---------------- -------------------------------------------
<S> <C>
Frances M. Hawk, Private Investor, (1997-present); Portfolio Manager (1992-1997, HLM
CFA, CFP Management Company, Inc. (investment management); Assistant Treasurer,
Trustee Pensions and Benefits. Management (1989-1992), United Technologies
28 Woodland Street Corporation (broad-based designer and manufacturer of high technology
Sherborn, MA products); Member, Board of Managers, seven Variable Annuity Separate
Age 52 Accounts of The Travelers Insurance Company+; Trustee, five Mutual
Funds sponsored by The Travelers Insurance Company.++

Ernest J. Wright Vice President and Secretary (1996-present), Assistant Secretary
Secretary to the Board (1994-1996), Counsel (1987-present), The Travelers Insurance
One Tower Square Company; Secretary, Board of Managers, seven Variable Annuity
Hartford, Connecticut Separate Accounts of The Travelers Insurance Company+; Secretary,
Age 59 Board of Trustees, five Mutual Funds sponsored by The Travelers
Insurance Company.++

Kathleen A. McGah Deputy General Counsel (1999 - present); Assistant Secretary
Assistant Secretary to (1995-present), The Travelers Insurance Company; Assistant Secretary,
The Board Board of Managers, seven Variable Annuity Separate Accounts of The
One Tower Square Travelers Insurance Company+; Assistant Secretary, Board of Trustees,
Hartford, Connecticut five Mutual Funds sponsored by The Travelers Insurance Company.++
Age 49 Prior to January 1995, Counsel, ITT Hartford Life Insurance Company.

David A. Golino Vice President (1999-present), Second Vice President (1996-1999), The
Principal Accounting Travelers Insurance Company; Principal Accounting Officer, seven
Officer Variable Annuity Separate Accounts of The Travelers Insurance
To the Board Company.+ Prior to May 1996, Senior Manager, Deloitte & Touche LLP.
One Tower Square
Hartford, Connecticut
Age 38
</TABLE>

+ These seven Variable Annuity Separate Accounts are: 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, The Travelers Timed Growth and Income Stock Account for
Variable Annuities, The Travelers Timed Short-Term Bond Account for
Variable Annuities, The Travelers Timed Aggressive Stock Account for
Variable Annuities and The Travelers Timed Bond Account for Variable
Annuities.

++ These five Mutual Funds are: Capital Appreciation Fund, Money Market
Portfolio, High Yield Bond Trust, Managed Assets Trust and The Travelers
Series Trust.

* Mr. McLendon is an "interested person" within the meaning of the 1940
Act by virtue of his position as Managing Director of Salomon Smith Barney Inc.,
an indirect wholly owned subsidiary of Citigroup Inc. and also owns shares and
options to purchase shares of Citigroup Inc., the indirect parent of The
Travelers Insurance Company.

The Company is responsible for payment of the fees and expenses of the
Board of Managers, and the expenses of audit of the Separate Accounts, as well
as other expenses for services related to the operations of the accounts, for
which it deducts certain amounts from purchase payments and from the accounts.

Members of the Board of Managers who are also officers or employees of
Citigroup Inc. or its subsidiaries are not entitled to any fee. Members of the
Board of Managers who are not affiliated as employees of Citigroup Inc. or its
subsidiaries receive an aggregate retainer of $19,000 for service on the Boards
of the seven Variable Annuity Separate Accounts established by The Travelers
Insurance Company and the five Mutual Funds sponsored by The Travelers Insurance
Company. They also receive an aggregate fee of $2,500 for each meeting of such
Boards attended. Board Members with 10 years of service may agree to provide
services as emeritus director at age 72 or upon reaching 80 years of age and
will receive 50% of the annual retainer and 50% of meeting fees if attended.

42
<PAGE> 171
PRINCIPAL UNDERWRITER

CFBDS, Inc. serves as principal underwriter for Fund U and each
Separate Account. The offering is continuous. CFBDS, Inc.'s principal executive
offices are located at 21 Milk Street, Boston, MA 02116. CFBDS is not affliated
with the Company or Fund U or each Separate Account. However, it is currently
anticipated that Travelers Distribution LLC, an affiliated broker dealer, may
become the principal underwriter for the Contracts during the year 2000.

DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT

Under the terms of the Distribution and Principal Underwriting
Agreement among Fund U and each Separate Account, CFBDS and the Company, CFBDs
acts as agent for the distribution of the Contracts and as principal
underwriter for the Contracts. The Company reimburses CFBDS for certain sales
and overhead expenses connected with sales functions.

ADMINISTRATIVE SERVICES

Under the terms of an Administrative Services Agreement and Agreement to
Provide Guarantees (formerly the Distribution and Management Agreement) between
each Separate Account and the Company, the Company provides all administrative
services and mortality and expense risk guarantees related to variable annuity
contracts issued by the Company in connection with the Separate Accounts and
assumes the risk of minimum death benefits, as applicable. The Company also pays
all sales costs (including costs associated with the preparation of sales
literature); all costs of qualifying the Separate Accounts and the variable
annuity contracts with regulatory authorities; the costs of proxy solicitation;
all custodian, accountants' and legal fees; and all compensation paid to the
unaffiliated members of the Board of Managers. In addition, under the terms of
the Administrative Services Agreement and Agreement to Provide Guarantees
between the Company and Accounts TGIS, TSB, TAS and TB, the Company deducts
amounts necessary to pay fees to third-party registered investment advisers
which provide market timing investment advisory services to Contract Owners in
those accounts and, in turn, pays such fees to the registered investment
advisers. The Company also provides without cost to the Separate Accounts all
necessary office space, facilities, and personnel to manage its affairs.

The Company received the following amounts from the Separate Accounts in
each of the last three fiscal years for services provided under the
Administrative Services Agreement and Agreement to Provide Guarantees:

<TABLE>
<CAPTION>
SEPARATE ACCOUNT 1999 1998 1997
---------------- ---- ----
<S> <C> <C> <C>
GIS $12,365,601 $ 9,908,196 $ 7,623,733
QB $ 1,998,726 $ 2,069,452 $ 2,144,373
MM $ 1,876,534 $ 1,489,538 $ 1,296,431
U $92,724,337 $76,905,285 $60,630,629
TGIS $ 1,723,168 $ 1,966,228 $ 2,750,311
TSB $ 2,525,763 $ 2,222,330 $ 1,092,109
TAS $ 773,987 $ 1,063,785 $ 1,191,956
TB $ 0 $ 0 $ 32,789
</TABLE>

SECURITIES CUSTODIAN

Chase Manhattan Bank, N.A., Chase MetroTech Center, Brooklyn, New York,
is the custodian of the portfolio securities and similar investments of Accounts
GIS, QB, MM, TGIS, TSB, TAS and TB.

INDEPENDENT ACCOUNTANTS

Financial statements as of and for the year ended December 31, 1999 of
Accounts GIS, QB, MM, TGIS, TSB, and TAS, included in the Annual Reports (for
each) incorporated by reference in this SAI, have been incorporated herein in
reliance on the reports of KPMG LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing. These financial
statements include prior period amounts which were audited by other independent
accountants.

The consolidated financial statements of The Travelers Insurance
Company and subsidiaries as of December 31, 1999 and 1998, and for each of the
years in the three-year period ended December 31, 1999, included herein, and
the financial statements of Fund U as of and for the year ended December 31,
1999, also included herein, have been included in reliance upon the reports of
KPMG LLP, independent certified public accountants, appearing elsewhere herein,
and upon the authority of said firm as experts in accounting and auditing.

43
<PAGE> 172
ANNUAL REPORT
DECEMBER 31, 1999

THE TRAVELERS FUND U
FOR VARIABLE ANNUITIES

[TRAVELERS LIFE & ANNUITY LOGO]

The Travelers Insurance Company
The Travelers Life and Annuity Company
One Tower Square
Hartford, CT 06183

<PAGE> 173

THE TRAVELERS FUND U
FOR VARIABLE ANNUITIES

STATEMENT OF ASSETS AND LIABILITIES
DECEMBER 31, 1999

<TABLE>
<S> <C> <C>
ASSETS:
Investments in eligible funds at market value:
American Odyssey Funds, Inc., 102,766,453 shares (cost $1,320,353,464) .............. $1,549,254,402
Capital Appreciation Fund, 12,052,818 shares (cost $600,862,985) .................... 1,311,346,582
Dreyfus Stock Index Fund, 16,267,862 shares (cost $403,900,755) ..................... 625,499,282
Dreyfus Variable Investment Fund, 141,025 shares (cost $8,083,668) .................. 9,355,569
Fidelity's Variable Insurance Products Fund, 51,377,716 shares (cost $1,176,630,438) 1,866,720,234
Fidelity's Variable Insurance Products Fund II, 24,367,451 shares (cost $369,556,816) 454,940,310
High Yield Bond Trust, 2,701,581 shares (cost $25,338,169) .......................... 25,583,973
Managed Assets Trust, 14,721,423 shares (cost $222,429,022) ......................... 310,916,460
Templeton Variable Products Series Fund, 27,742,986 shares (cost $529,532,725) ...... 651,517,708
The Travelers Series Trust, 7,643,703 shares (cost $115,155,969) .................... 131,722,007
Travelers Series Fund Inc., 10,108,813 shares (cost $186,978,857) ................... 237,538,986
--------------

Total Investments (cost $4,958,822,868) ........................................... $7,174,395,513

Receivables:
Purchase payments and transfers from other Travelers accounts ....................... 7,359,257
Other assets ......................................................................... 13,643
--------------

Total Assets ...................................................................... 7,181,768,413
--------------

LIABILITIES:
Payables:
Contract surrenders and transfers to other Travelers accounts ....................... 11,024,478
Insurance charges ................................................................... 2,181,403
Accrued liabilities ................................................................... 5,947
--------------

Total Liabilities ................................................................... 13,211,828
--------------

NET ASSETS: $7,168,556,585
==============
</TABLE>

See Notes to Financial Statements

-1-
<PAGE> 174

THE TRAVELERS FUND U
FOR VARIABLE ANNUITIES

STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1999

<TABLE>
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................................. $ 442,165,724

EXPENSES:
Insurance charges .......................................................... 79,327,353
---------------
Net investment income .................................................... 362,838,371
---------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ........................................... $ 724,840,180
Cost of investments sold ................................................. 618,721,402
---------------
Net realized gain (loss) ............................................... 106,118,778

Change in unrealized gain (loss) on investments:
Unrealized gain at December 31, 1998 ..................................... 1,383,867,788
Unrealized gain at December 31, 1999 ..................................... 2,215,572,645
---------------
Net change in unrealized gain (loss) for the year ...................... 831,704,857
---------------
Net realized gain (loss) and change in unrealized gain (loss)......... 937,823,635
---------------
Net increase in net assets resulting from operations ....................... $1,300,662,006
===============
</TABLE>

See Notes to Financial Statements

-2-
<PAGE> 175

THE TRAVELERS FUND U
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
1999 1998
---- ----
<S> <C> <C>
OPERATIONS:
Net investment income ........................................................ $ 362,838,371 $ 301,541,256
Net realized gain (loss) from investment transactions ........................ 106,118,778 125,559,194
Net change in unrealized gain (loss) on investments .......................... 831,704,857 427,505,080
---------------- ----------------

Net increase in net assets resulting from operations ....................... 1,300,662,006 854,605,530
---------------- ----------------

UNIT TRANSACTIONS:
Participant purchase payments
(applicable to 297,874,773 and 372,315,281 units, respectively)............. 758,823,301 788,454,196
Participant transfers from other Travelers accounts
(applicable to 377,053,591 and 481,886,548 units, respectively)............. 1,069,251,529 991,422,546
Administrative and asset allocation charges
(applicable to 11,186,839 and 11,515,000 units, respectively)............... (21,676,748) (20,522,746)
Contract surrenders
(applicable to 231,915,651 and 168,802,399 units, respectively)............. (578,809,057) (364,757,379)
Participant transfers to other Travelers accounts
(applicable to 511,738,836 and 504,720,342 units, respectively)............. (1,230,265,377) (1,021,491,251)
Other payments to participants
(applicable to 6,311,271 and 4,642,537 units, respectively)................. (16,624,427) (10,989,089)
---------------- ----------------

Net increase (decrease) in net assets resulting from unit transactions...... (19,300,779) 362,116,277
---------------- ----------------

Net increase in net assets ............................................... 1,281,361,227 1,216,721,807

NET ASSETS:
Beginning of year ............................................................ 5,887,195,358 4,670,473,551
---------------- ----------------

End of year .................................................................. $ 7,168,556,585 $ 5,887,195,358
================ ================
</TABLE>

See Notes to Financial Statements

-3-
<PAGE> 176

NOTES TO FINANCIAL STATEMENTS

1. SIGNIFICANT ACCOUNTING POLICIES

The Travelers Fund U for Variable Annuities ("Fund U") is a separate account
of The Travelers Insurance Company ("The Travelers"), an indirect wholly
owned subsidiary of Citigroup Inc., and is available for funding certain
variable annuity contracts issued by The Travelers. Fund U is registered
under the Investment Company Act of 1940, as amended, as a unit investment
trust. Fund U is comprised of the Universal Annuity product.

Participant purchase payments applied to Fund U are invested in one or more
eligible funds in accordance with the selection made by the contract owner.
As of December 31, 1999, the eligible funds available under Fund U were:
Managed Assets Trust; High Yield Bond Trust; Capital Appreciation Fund; U.S.
Government Securities Portfolio, Social Awareness Stock Portfolio, Utilities
Portfolio and Disciplined Mid Cap Stock Portfolio of The Travelers Series
Trust; American Odyssey Core Equity Fund, American Odyssey Emerging
Opportunities Fund, American Odyssey International Equity Fund, American
Odyssey Long-Term Bond Fund, American Odyssey Intermediate-Term Bond Fund
and American Odyssey Global High-Yield Bond Fund, of American Odyssey Funds,
Inc.; Alliance Growth Portfolio, Smith Barney High Income Portfolio, Smith
Barney International Equity Portfolio, Smith Barney Large Cap Value
Portfolio, Putnam Diversified Income Portfolio and MFS Total Return
Portfolio of Travelers Series Fund Inc. (all of which are managed by
affiliates of The Travelers); Templeton Bond Fund (Class 1), Templeton Stock
Fund (Class 1) and Templeton Asset Allocation Fund (Class 1) of Templeton
Variable Products Series Fund; High Income Portfolio, Growth Portfolio and
Equity-Income Portfolio of Fidelity's Variable Insurance Products Fund;
Asset Manager Portfolio of Fidelity's Variable Insurance Products Fund II;
Dreyfus Stock Index Fund; and Small Cap Portfolio of Dreyfus Variable
Investment Fund. All of the funds are Massachusetts business trusts, except
for American Odyssey Funds, Inc., Dreyfus Stock Index Fund and Travelers
Series Fund Inc. which are incorporated under Maryland law. Not all funds
may be available in all states or to all contract owners.

Effective May 1, 1996, INVESCO Strategic Income Portfolio (formerly G.T.
Global Strategic Income Portfolio) of Travelers Series Fund Inc. is no
longer available to new contract owners under Fund U.

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

SECURITY VALUATION. Investments are valued daily at the net asset values per
share of the underlying funds.

SECURITY TRANSACTIONS. Security transactions are accounted for on the trade
date. Dividend income is recorded on the ex-dividend date.

FEDERAL INCOME TAXES. The operations of Fund U 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 of Fund U. Fund U 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.

-4-
<PAGE> 177

NOTES TO FINANCIAL STATEMENTS - CONTINUED

2. INVESTMENTS

The aggregate costs of purchases and proceeds from sales of investments were
$1,078,198,591 and $724,840,180 respectively, for the year ended December
31, 1999. Realized gains and losses from investment transactions are
reported on an average cost basis. The cost of investments in eligible funds
was $4,958,822,868 at December 31, 1999. Gross unrealized appreciation for
all investments at December 31, 1999 was $2,227,247,814 Gross unrealized
depreciation for all investments at December 31, 1999 was $11,675,169.

3. CONTRACT CHARGES

Insurance charges are paid for the mortality and expense risks assumed by
The Travelers. Each business day, The Travelers deducts a mortality and
expense risk charge, which is reflected in the calculation of accumulation
and annuity unit values. This charge equals, on an annual basis, 1.25% of
the amounts held in each variable funding option. 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.

No sales charge is deducted from participant purchase payments when they are
received. However, 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 include $5,742,272 and
$4,408,181 of contingent deferred sales charges for the years ended December
31, 1999 and 1998, respectively.

Participants in American Odyssey Funds, Inc. (the "Funds"), may elect to
enter into a separate asset allocation advisory agreement with Copeland
Financial Services, Inc. ("Copeland"), an affiliate of The Travelers. Under
this arrangement, Copeland provides asset allocation advice and charges
participants an annual fee, plus a one-time set-up fee of $30. The annual
fee, which decreases as a participant's assets in the Funds increase, is
equivalent to an amount of up to 1.50% of the participant's assets in the
Funds. These fees totaled $14,022,036 and $13,404,283 for the years ended
December 31, 1999 and 1998, respectively.

4. NET ASSETS HELD ON BEHALF OF AN AFFILIATE

Approximately $38,082,000 and $31,559,000 of the net assets of Fund U were
held on behalf of an affiliate of The Travelers as of December 31, 1999 and
1998, respectively. Transactions with this affiliate during the years ended
December 31, 1999 and 1998, comprised participant purchase payments of
approximately $8,866,000 and $7,573,000 and contract surrenders of
approximately $6,102,000 and $5,810,000, respectively.

5. CHANGE IN ACCOUNTING

On January 1, 1999, in conjunction with the implementation of a new system,
Fund U changed its basis of reporting realized gains and losses for
investment transactions from an identified cost basis to an average cost
basis. The accounting change had no effect on net assets.

-5-
<PAGE> 178

NOTES TO FINANCIAL STATEMENTS - CONTINUED

6. NET CONTRACT OWNERS' EQUITY

<TABLE>
<CAPTION>
DECEMBER 31, 1999
---------------------------------------------------------------

ACCUMULATION ANNUITY UNIT NET
UNITS UNITS VALUE ASSETS
----- ----- ----- ------
<S> <C> <C> <C> <C>
American Odyssey Funds, Inc.
American Odyssey Core Equity Fund ................... 176,492,672 49,552 $2.408 $ 425,083,086
American Odyssey Emerging Opportunities Fund ........ 181,925,758 29,482 1.877 341,587,038
American Odyssey Global High-Yield Bond Fund ........ 70,720,945 8,009 1.229 86,939,624
American Odyssey Intermediate-Term Bond Fund ........ 87,143,296 74,054 1.320 115,100,927
American Odyssey International Equity Fund .......... 147,953,250 40,456 2.364 349,816,254
American Odyssey Long-Term Bond Fund ................ 163,740,903 80,666 1.398 229,032,510

Capital Appreciation Fund
Qualified ......................................... 131,025,826 48,999 9.148 1,199,045,561
Non-qualified ..................................... 11,682,494 122,772 9.487 111,995,601

Dreyfus Stock Index Fund .............................. 168,530,019 289,107 3.704 625,357,659

Dreyfus Variable Investment Fund
Small Cap Portfolio ................................. 8,724,596 11,977 1.046 9,139,440

Fidelity's Variable Insurance Products Fund
Equity-Income Portfolio ............................. 216,456,977 250,806 2.452 531,396,834
Growth Portfolio .................................... 301,654,356 160,978 4.117 1,242,465,744
High Income Portfolio ............................... 43,861,626 60,165 2.071 90,952,189

Fidelity's Variable Insurance Products Fund II
Asset Manager Portfolio ............................. 193,377,184 171,763 2.343 453,470,054

High Yield Bond Trust
Qualified ......................................... 6,313,578 5,419 3.539 22,366,028
Non-qualified ..................................... 888,993 8,631 3.576 3,210,162

Managed Assets Trust
Qualified ......................................... 54,861,666 101,078 5.033 276,624,264
Non-qualified ..................................... 6,160,146 87,731 5.417 33,846,379

Templeton Variable Products Series Fund
Templeton Asset Allocation Fund (Class 1)............ 88,465,385 85,232 2.640 233,792,619
Templeton Bond Fund (Class 1) ....................... 7,644,191 31,966 1.345 10,327,196
Templeton Stock Fund (Class 1) ...................... 144,116,075 32,287 2.819 406,306,455
</TABLE>

-6-

<PAGE> 179

NOTES TO FINANCIAL STATEMENTS - CONTINUED

6. NET CONTRACT OWNERS' EQUITY (CONTINUED)

<TABLE>
<CAPTION>
DECEMBER 31, 1999
------------------------------------------------------------------------

ACCUMULATION ANNUITY UNIT NET
UNITS UNITS VALUE ASSETS
----- ----- ----- ------
<S> <C> <C> <C> <C>
The Travelers Series Trust
Social Awareness Stock Portfolio ................ 17,998,888 - $3.251 $ 58,518,133
Disciplined Mid Cap Stock Portfolio ............. 2,428,698 - 1.165 2,830,172
U.S. Government Securities Portfolio ............ 27,084,470 16,845 1.517 41,101,809
Utilities Portfolio ............................. 15,035,212 - 1.943 29,207,425

Travelers Series Fund Inc.
Alliance Growth Portfolio ....................... 37,603,939 3,923 3.480 130,858,621
INVESCO Strategic Income Portfolio .............. 193,477 - 1.403 271,362
MFS Total Return Portfolio ...................... 23,129,371 13,018 1.822 42,172,727
Putnam Diversified Income Portfolio ............. 6,580,248 - 1.273 8,377,405
Smith Barney International Equity Portfolio ..... 11,828,513 - 2.332 27,585,313
Smith Barney High Income Portfolio .............. 2,379,162 - 1.419 3,375,799
Smith Barney Large Cap Value Portfolio .......... 13,347,284 17,579 1.975 26,402,195
---------------

Net Contract Owners' Equity .......................................................................... $7,168,556,585
===============
</TABLE>

-7-
<PAGE> 180

NOTES TO FINANCIAL STATEMENTS - CONTINUED

7. STATEMENT OF INVESTMENTS

<TABLE>
<CAPTION>
INVESTMENT OPTIONS NO. OF MARKET
SHARES VALUE
-------------- ----------------
<S> <C> <C>
AMERICAN ODYSSEY FUNDS, INC. (21.6%)
American Odyssey Core Equity Fund (Cost $380,808,598) 24,164,501 $ 425,536,854
American Odyssey Emerging Opportunities Fund (Cost $283,234,100) 20,831,002 342,045,052
American Odyssey Global High-Yield Bond Fund (Cost $87,277,444) 8,450,744 87,042,658
American Odyssey Intermediate-Term Bond Fund (Cost $114,874,921) 11,117,804 115,180,451
American Odyssey International Equity Fund (Cost $221,112,237) 15,683,041 350,202,295
American Odyssey Long-Term Bond Fund (Cost $233,046,164) 22,519,361 229,247,092
-------------- ----------------
Total (Cost $1,320,353,464) 102,766,453 1,549,254,402
-------------- ----------------
CAPITAL APPRECIATION FUND (18.3%)
Total (Cost $600,862,985) 12,052,818 1,311,346,582
-------------- ----------------
DREYFUS STOCK INDEX FUND (8.7%)
Total (Cost $403,900,755) 16,267,862 625,499,282
-------------- ----------------
DREYFUS VARIABLE INVESTMENT FUND (0.1%)
Small Cap Portfolio
Total (Cost $8,083,668) 141,025 9,355,569
-------------- ----------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND (26.0%)
Equity-Income Portfolio (Cost $402,085,243) 20,682,812 531,755,108
Growth Portfolio (Cost $679,363,888) 22,645,708 1,243,928,719
High Income Portfolio (Cost $95,181,307) 8,049,196 91,036,407
-------------- ----------------
Total (Cost $1,176,630,438) 51,377,716 1,866,720,234
-------------- ----------------
FIDELITY'S VARIABLE INSURANCE PRODUCTS FUND II (6.4%)
Asset Manager Portfolio
Total (Cost $369,556,816) 24,367,451 454,940,310
-------------- ----------------
HIGH YIELD BOND TRUST (0.4%)
Total (Cost $25,338,169) 2,701,581 25,583,973
-------------- ----------------
MANAGED ASSETS TRUST (4.3%)
Total (Cost $222,429,022) 14,721,423 310,916,460
-------------- ----------------
TEMPLETON VARIABLE PRODUCTS SERIES FUND (9.1%)
Templeton Asset Allocation Fund (Class 1) (Cost $182,335,089) 10,025,715 234,300,962
Templeton Bond Fund (Class 1) (Cost $11,160,966) 1,035,242 10,342,069
Templeton Stock Fund (Class 1) (Cost $336,036,670) 16,682,029 406,874,677
-------------- ----------------
Total (Cost $529,532,725) 27,742,986 651,517,708
-------------- ----------------
</TABLE>

-8-
<PAGE> 181

NOTES TO FINANCIAL STATEMENTS - CONTINUED

7. STATEMENT OF INVESTMENTS (CONTINUED)

<TABLE>
<CAPTION>
NO. OF MARKET
SHARES VALUE
------------ ---------------
<S> <C> <C>
THE TRAVELERS SERIES TRUST (1.8%)
Social Awareness Stock Portfolio (Cost $42,468,449) 1,990,543 $ 58,561,762
Disciplined Mid Cap Stock Portfolio (Cost $2,510,856) 181,942 2,840,115
U.S. Government Securities Portfolio (Cost $43,280,241) 3,636,293 41,126,470
Utilities Portfolio (Cost $26,896,423) 1,834,925 29,193,660
------------ ---------------
Total (Cost $115,155,969) 7,643,703 131,722,007
------------ ---------------
TRAVELERS SERIES FUND INC. (3.3%)
Alliance Growth Portfolio (Cost $90,089,917) 3,972,414 130,612,957
INVESCO Global Strategic Income Portfolio (Cost $302,617) 26,021 271,395
MFS Total Return Portfolio (Cost $39,363,752) 2,601,857 42,228,136
Putnam Diversified Income Portfolio (Cost $8,768,731) 732,228 8,384,010
Smith Barney International Equity Portfolio (Cost $20,695,743) 1,142,685 26,247,466
Smith Barney High Income Portfolio (Cost $3,484,119) 279,497 3,376,319
Smith Barney Large Cap Value Portfolio (Cost $24,273,978) 1,354,111 26,418,703
------------ ---------------
Total (Cost $186,978,857) 10,108,813 237,538,986
------------ ---------------
TOTAL INVESTMENT OPTIONS (100%)
(COST $4,958,822,868) $7,174,395,513
===============
</TABLE>

-9-
<PAGE> 182

NOTES TO FINANCIAL STATEMENTS - CONTINUED

8. SCHEDULE OF FUND U OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
AMERICAN ODYSSEY CORE AMERICAN ODYSSEY EMERGING
EQUITY FUND OPPORTUNITIES FUND
----------------------------------------------------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ............................................. $ 67,558,393 $ 46,677,574 $ 24,435,726 $ -
--------------- -------------- --------------- ----------------
EXPENSES:
Insurance charges ..................................... 5,674,660 5,425,624 3,508,800 3,115,429
--------------- -------------- --------------- ----------------
Net investment income (loss) ...................... 61,883,733 41,251,950 20,926,926 (3,115,429)
--------------- -------------- --------------- ----------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ...................... 45,497,343 49,606,277 31,909,726 12,399,704
Cost of investments sold ............................ 35,357,310 23,755,070 31,878,972 9,569,848
--------------- -------------- --------------- ----------------

Net realized gain (loss) .......................... 10,140,033 25,851,207 30,754 2,829,856
--------------- -------------- --------------- ----------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year ............ 122,035,533 131,243,327 (10,969,519) 12,099,286
Unrealized gain (loss) end of year .................. 44,728,256 122,035,533 58,810,952 (10,969,519)
--------------- -------------- --------------- ----------------

Net change in unrealized gain (loss) for the year.. (77,307,277) (9,207,794) 69,780,471 (23,068,805)
--------------- -------------- --------------- ----------------
Net increase (decrease) in net assets
resulting from operations ......................... (5,283,511) 57,895,363 90,738,151 (23,354,378)
--------------- -------------- --------------- ----------------

UNIT TRANSACTIONS:
Participant purchase payments ......................... 68,195,942 81,763,760 42,975,799 53,638,920
Participant transfers from other Travelers accounts ... 26,945,594 37,206,594 33,331,462 45,760,051
Administrative and asset allocation charges ........... (4,837,656) (4,838,233) (3,068,753) (2,732,557)
Contract surrenders ................................... (46,351,366) (33,129,517) (27,601,404) (18,278,210)
Participant transfers to other Travelers accounts ..... (72,341,020) (77,563,428) (55,444,080) (43,769,243)
Other payments to participants ........................ (583,604) (305,480) (337,924) (168,407)
--------------- -------------- --------------- ----------------
Net increase (decrease) in net assets
resulting from unit transactions .................. (28,972,110) 3,133,696 (10,144,900) 34,450,554
--------------- -------------- --------------- ----------------
Net increase (decrease) in net assets ............. (34,255,621) 61,029,059 80,593,251 11,096,176

NET ASSETS:
Beginning of year ................................... 459,338,707 398,309,648 260,993,787 249,897,611
--------------- -------------- --------------- ----------------
End of year ......................................... $ 425,083,086 $ 459,338,707 $ 341,587,038 $ 260,993,787
=============== ============== =============== ================
</TABLE>

<TABLE>
<CAPTION>
AMERICAN ODYSSEY GLOBAL HIGH-
------------------------------------
YIELD BOND FUND
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends .................................................. $ 5,146,905 $ 19,922
--------------- ---------------
EXPENSES:
Insurance charges .......................................... 1,041,351 886,667
--------------- ---------------
Net investment income (loss) ........................... 4,105,554 (866,745)
--------------- ---------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ........................... 5,872,805 3,729,374
Cost of investments sold ................................. 5,989,912 3,686,621
--------------- ---------------

Net realized gain (loss) ............................... (117,107) 42,753
--------------- ---------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year ................. (3,711,334) (234,573)
Unrealized gain (loss) end of year ....................... (234,786) (3,711,334)
--------------- ---------------

Net change in unrealized gain (loss) for the year....... 3,476,548 (3,476,761)
--------------- ---------------
Net increase (decrease) in net assets
resulting from operations .............................. 7,464,995 (4,300,753)
--------------- ---------------
UNIT TRANSACTIONS:
Participant purchase payments .............................. 14,656,848 14,988,891
Participant transfers from other Travelers accounts ........ 6,957,704 51,325,396
Administrative and asset allocation charges ................ (1,083,067) (894,268)
Contract surrenders ........................................ (8,245,594) (5,092,328)
Participant transfers to other Travelers accounts .......... (12,278,248) (34,330,232)
Other payments to participants ............................. (91,482) (30,199)
--------------- ---------------
Net increase (decrease) in net assets
resulting from unit transactions ....................... (83,839) 25,967,260
--------------- ---------------
Net increase (decrease) in net assets .................. 7,381,156 21,666,507

NET ASSETS:
Beginning of year ........................................ 79,558,468 57,891,961
--------------- ---------------
End of year .............................................. $ 86,939,624 $ 79,558,468
=============== ===============
</TABLE>

-10-
<PAGE> 183

NOTES TO FINANCIAL STATEMENTS - CONTINUED

<TABLE>
<CAPTION>
AMERICAN ODYSSEY INTERMEDIATE- AMERICAN ODYSSEY INTERNATIONAL
TERM BOND FUND EQUITY FUND
- --------------------------------------- ---------------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C>
$ 9,819,394 $ 565,998 $ - $ 14,854,934
- ---------------- ------------------ ---------------- -----------------
1,491,618 1,455,856 3,811,719 3,312,672
- ---------------- ------------------ ---------------- -----------------
8,327,776 (889,858) (3,811,719) 11,542,262
- ---------------- ------------------ ---------------- -----------------

14,445,848 7,357,934 41,066,068 10,797,636
13,940,012 7,043,316 30,986,585 7,100,512
- ---------------- ------------------ ---------------- -----------------

505,836 314,618 10,079,483 3,697,124
- ---------------- ------------------ ---------------- -----------------

8,858,575 223,245 50,005,303 32,965,656
305,530 8,858,575 129,090,058 50,005,303
- ---------------- ------------------ ---------------- -----------------

(8,553,045) 8,635,330 79,084,755 17,039,647
- ---------------- ------------------ ---------------- -----------------

280,567 8,060,090 85,352,519 32,279,033
- ---------------- ------------------ ---------------- -----------------

16,965,777 20,537,920 46,310,208 53,964,961
9,636,926 33,156,307 22,421,892 36,619,915
(1,301,686) (1,326,654) (3,502,085) (3,204,340)
(13,914,926) (9,223,413) (30,732,341) (20,115,640)
(19,336,294) (34,887,500) (61,740,227) (36,562,094)
(274,342) (84,470) (301,021) (90,422)
- ---------------- ------------------ ---------------- -----------------

(8,224,545) 8,172,190 (27,543,574) 30,612,380
- ---------------- ------------------ ---------------- -----------------

(7,943,978) 16,232,280 57,808,945 62,891,413
123,044,905 106,812,625 292,007,309 229,115,896
- ---------------- ------------------ ---------------- -----------------

$ 115,100,927 $ 123,044,905 $ 349,816,254 $ 292,007,309
================ ================== ================ =================
</TABLE>

<TABLE>
<CAPTION>
AMERICAN ODYSSEY LONG-TERM
BOND FUND CAPITAL APPRECIATION FUND
------------------------------------------ ------------------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C>
$ 20,307,842 $ 4,470,572 $ 23,026,406 $ 14,135,170
----------------- ------------------- ----------------- -------------------
2,933,072 2,935,546 11,685,349 6,012,974
----------------- ------------------- ----------------- -------------------
17,374,770 1,535,026 11,341,057 8,122,196
----------------- ------------------- ----------------- -------------------

25,344,199 14,957,547 26,227,235 21,971,380
24,290,758 14,409,510 14,069,803 10,392,975
----------------- ------------------- ----------------- -------------------

1,053,441 548,037 12,157,432 11,578,405
----------------- ------------------- ----------------- -------------------

24,212,390 8,825,835 313,309,985 92,967,437
(3,799,072) 24,212,390 710,483,597 313,309,985
----------------- ------------------- ----------------- -------------------

(28,011,462) 15,386,555 397,173,612 220,342,548
----------------- ------------------- ----------------- -------------------

(9,583,251) 17,469,618 420,672,101 240,043,149
----------------- ------------------- ----------------- -------------------

37,812,244 45,702,320 127,742,083 79,270,131
19,091,615 40,315,496 330,558,232 161,977,456
(2,852,723) (2,986,144) (1,013,466) (630,932)
(24,694,581) (16,952,126) (72,279,438) (27,972,894)
(37,973,091) (51,796,437) (196,508,406) (104,303,975)
(314,268) (102,409) (2,424,858) (877,684)
----------------- ------------------- ----------------- -------------------

(8,930,804) 14,180,700 186,074,147 107,462,102
----------------- ------------------- ----------------- -------------------

(18,514,055) 31,650,318 606,746,248 347,505,251
247,546,565 215,896,247 704,294,914 356,789,663
----------------- ------------------- ----------------- -------------------

$ 229,032,510 $ 247,546,565 $ 1,311,041,162 $ 704,294,914
================= =================== ================= ===================
</TABLE>

-11-
<PAGE> 184

NOTES TO FINANCIAL STATEMENTS - CONTINUED

8. SCHEDULE OF FUND U OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998 (CONTINUED)

<TABLE>
<CAPTION>
DREYFUS STOCK INDEX FUND SMALL CAP PORTFOLIO
----------------------------------- -----------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ........................................... $ 11,077,617 $ 5,800,637 $ 3,261 $ 41,649
--------------- --------------- --------------- ---------------
EXPENSES:
Insurance charges ................................... 6,760,302 4,491,740 76,073 15,334
--------------- --------------- --------------- ---------------
Net investment income (loss) .................... 4,317,315 1,308,897 (72,812) 26,315
--------------- --------------- --------------- ---------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold .................... 16,942,696 16,018,909 8,243,757 5,622,928
Cost of investments sold .......................... 11,646,876 8,909,613 7,577,102 5,896,492
--------------- --------------- --------------- ---------------

Net realized gain (loss) ........................ 5,295,820 7,109,296 666,655 (273,564)
--------------- --------------- --------------- ---------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year .......... 135,198,407 58,505,927 484,027 -
Unrealized gain (loss) end of year ................ 221,598,527 135,198,407 1,271,901 484,027
--------------- --------------- --------------- ---------------

Net change in unrealized gain (loss) for the
year ......................................... 86,400,120 76,692,480 787,874 484,027
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets
resulting from operations ....................... 96,013,255 85,110,673 1,381,717 236,778
--------------- --------------- --------------- ---------------

UNIT TRANSACTIONS:
Participant purchase payments ....................... 89,563,257 80,671,020 2,075,658 694,477
Participant transfers from other Travelers accounts.. 115,116,270 134,900,117 15,849,695 10,602,881
Administrative and asset allocation charges ......... (760,511) (609,730) (10,659) (2,208)
Contract surrenders ................................. (39,482,305) (20,907,506) (470,072) (23,435)
Participant transfers to other Travelers accounts ... (92,515,856) (88,144,761) (13,839,638) (7,366,668)
Other payments to participants ...................... (1,388,159) (696,649) 11,458 (544)
--------------- --------------- --------------- ---------------
Net increase (decrease) in net assets
resulting from unit transactions ................ 70,532,696 105,212,491 3,616,442 3,904,503
--------------- --------------- --------------- ---------------

Net increase (decrease) in net assets ........... 166,545,951 190,323,164 4,998,159 4,141,281

NET ASSETS:
Beginning of year ................................. 458,811,708 268,488,544 4,141,281 -
--------------- --------------- --------------- ---------------

End of year ....................................... $ 625,357,659 $ 458,811,708 $ 9,139,440 $ 4,141,281
=============== =============== =============== ===============
</TABLE>

<TABLE>
<CAPTION>
EQUITY-INCOME PORTFOLIO
----------------------------------
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ........................................... $ 26,915,610 $ 32,590,206
--------------- ---------------
EXPENSES:
Insurance charges ................................... 7,027,374 6,842,230
--------------- ---------------
Net investment income (loss) .................... 19,888,236 25,747,976
--------------- ---------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold .................... 78,275,162 33,293,579
Cost of investments sold .......................... 59,606,992 21,077,424
--------------- ---------------

Net realized gain (loss) ........................ 18,668,170 12,216,155
--------------- ---------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year .......... 140,571,025 127,348,119
Unrealized gain (loss) end of year ................ 129,669,865 140,571,025
--------------- ---------------

Net change in unrealized gain (loss) for the
year ......................................... (10,901,160) 13,222,906
--------------- ---------------
Net increase (decrease) in net assets
resulting from operations ....................... 27,655,246 51,187,037
--------------- ---------------

UNIT TRANSACTIONS:
Participant purchase payments ....................... 53,705,216 74,658,757
Participant transfers from other Travelers accounts.. 35,257,052 52,447,275
Administrative and asset allocation charges ......... (565,159) (642,381)
Contract surrenders ................................. (52,396,159) (35,527,251)
Participant transfers to other Travelers accounts ... (100,271,705) (72,713,766)
Other payments to participants ...................... (1,669,199) (1,851,500)
--------------- ---------------
Net increase (decrease) in net assets
resulting from unit transactions .................. (65,939,954) 16,371,134
--------------- ---------------

Net increase (decrease) in net assets ........... (38,284,708) 67,558,171

NET ASSETS:
Beginning of year ................................. 569,681,542 502,123,371
--------------- ---------------

End of year ....................................... $ 531,396,834 $ 569,681,542
=============== ===============

</TABLE>

-12-
<PAGE> 185

NOTES TO FINANCIAL STATEMENTS - CONTINUED

<TABLE>
<CAPTION>
GROWTH PORTFOLIO HIGH INCOME PORTFOLIO
---------------------------------- -----------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C>
$ 102,997,658 $ 88,523,163 $ 9,021,149 $ 11,574,745
--------------- --------------- --------------- ---------------

12,812,429 9,216,556 1,156,604 1,275,579
--------------- --------------- --------------- ---------------
90,185,229 79,306,607 7,864,545 10,299,166
--------------- --------------- --------------- ---------------

49,847,778 33,362,222 23,680,364 16,425,963
32,368,299 17,803,231 25,125,383 14,802,190
--------------- --------------- --------------- ---------------

17,479,479 15,558,991 (1,445,019) 1,623,773
--------------- --------------- --------------- ---------------
345,891,339 197,882,791 (3,997,079) 14,018,911
564,564,831 345,891,339 (4,144,900) (3,997,079)
--------------- --------------- --------------- ---------------

218,673,492 148,008,548 (147,821) (18,015,990)
--------------- --------------- --------------- ---------------

326,338,200 242,874,146 6,271,705 (6,093,051)
--------------- --------------- --------------- ---------------

91,542,467 85,134,952 8,837,666 14,356,459
146,915,176 72,900,644 18,656,291 24,860,418
(968,655) (882,746) (85,703) (100,706)
(84,839,972) (49,161,771) (11,056,757) (8,203,135)
(132,455,481) (88,261,829) (27,120,213) (29,256,156)
(1,699,986) (1,185,267) (219,101) (221,371)
--------------- --------------- --------------- ---------------

18,493,549 18,543,983 (10,987,817) 1,435,509
--------------- --------------- --------------- ---------------

344,831,749 261,418,129 (4,716,112) (4,657,542)

897,633,995 636,215,866 95,668,301 100,325,843
--------------- --------------- --------------- ---------------

$ 1,242,465,744 $ 897,633,995 $ 90,952,189 $ 95,668,301
=============== =============== =============== ===============
</TABLE>

<TABLE>
<CAPTION>
ASSET MANAGER PORTFOLIO HIGH YIELD BOND TRUST
---------------------------------- ----------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C>
$ 35,806,493 $ 57,148,255 $ 2,227,586 $ 1,876,659
--------------- --------------- --------------- ---------------

5,775,403 5,831,150 342,467 348,176
--------------- --------------- --------------- ---------------
30,031,090 51,317,105 1,885,119 1,528,483
--------------- --------------- --------------- ---------------

80,618,817 37,768,088 7,357,413 6,813,491
69,916,446 31,507,759 7,019,091 5,931,421
--------------- --------------- --------------- ---------------

10,702,371 6,260,329 338,322 882,070
--------------- --------------- --------------- ---------------
84,013,267 81,897,954 1,634,786 2,694,688
85,383,494 84,013,267 245,804 1,634,786
--------------- --------------- --------------- ---------------

1,370,227 2,115,313 (1,388,982) (1,059,902)
--------------- --------------- --------------- ---------------

42,103,688 59,692,747 834,459 1,350,651
--------------- --------------- --------------- ---------------

28,817,854 35,223,767 2,432,450 3,200,947
15,850,588 20,421,148 7,164,671 11,597,997
(394,402) (446,135) (25,236) (25,851)
(50,615,853) (37,864,291) (2,678,864) (2,675,319)
(64,735,911) (42,546,794) (9,393,380) (10,956,362)
(1,570,667) (1,650,068) (149,233) (73,257)
--------------- --------------- --------------- ---------------

(72,648,391) (26,862,373) (2,649,592) 1,068,155
--------------- --------------- --------------- ---------------

(30,544,703) 32,830,374 (1,815,133) 2,418,806

484,014,757 451,184,383 27,391,323 24,972,517
--------------- --------------- --------------- ---------------

$ 453,470,054 $ 484,014,757 $ 25,576,190 $ 27,391,323
=============== =============== =============== ===============
</TABLE>

-13-
<PAGE> 186

NOTES TO FINANCIAL STATEMENTS - CONTINUED

8. SCHEDULE OF FUND U OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998 (CONTINUED)

<TABLE>
<CAPTION>
TEMPLETON ASSET ALLOCATION FUND
MANAGED ASSETS TRUST (CLASS 1)
------------------------------ ------------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ............................................. $ 21,939,049 $ 16,770,815 $ 32,526,684 $ 14,789,784
------------- ------------- ------------- -------------
EXPENSES:
Insurance charges ..................................... 3,647,581 3,028,890 2,792,150 3,122,304
------------- ------------- ------------- -------------
Net investment income (loss) ...................... 18,291,468 13,741,925 29,734,534 11,667,480
------------- ------------- ------------- -------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ...................... 18,119,219 14,756,579 44,784,639 44,487,185
Cost of investments sold ............................ 13,603,990 9,793,241 38,603,075 30,642,639
------------- ------------- ------------- -------------
Net realized gain (loss) .......................... 4,515,229 4,963,338 6,181,564 13,844,546
------------- ------------- ------------- -------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year ............ 75,866,162 50,173,134 44,571,614 58,515,862
Unrealized gain (loss) end of year .................. 88,487,438 75,866,162 51,965,873 44,571,614
------------- ------------- ------------- -------------

Net change in unrealized gain (loss) for the year.. 12,621,276 25,693,028 7,394,259 (13,944,248)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from operations ......................... 35,427,973 44,398,291 43,310,357 11,567,778
------------- ------------- ------------- -------------
UNIT TRANSACTIONS:
Participant purchase payments ......................... 22,166,299 17,146,878 16,283,134 22,415,693
Participant transfers from other Travelers accounts ... 32,473,573 25,803,164 12,599,159 10,995,174
Administrative and asset allocation charges ........... (248,522) (209,695) (184,722) (219,356)
Contract surrenders ................................... (22,271,722) (19,187,264) (24,569,127) (16,288,049)
Participant transfers to other Travelers accounts ..... (25,295,414) (18,642,309) (42,961,903) (55,068,273)
Other payments to participants ........................ (877,446) (1,172,090) (946,168) (1,130,546)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets
resulting from unit transactions .................. 5,946,768 3,738,684 (39,779,627) (39,295,357)
------------- ------------- ------------- -------------
Net increase (decrease) in net assets ............. 41,374,741 48,136,975 3,530,730 (27,727,579)

NET ASSETS:
Beginning of year ................................... 269,095,902 220,958,927 230,261,889 257,989,468
------------- ------------- ------------- -------------

End of year ......................................... $ 310,470,643 $ 269,095,902 $ 233,792,619 $ 230,261,889
============= ============= ============= =============
</TABLE>

<TABLE>
<CAPTION>
TEMPLETON BOND FUND
(CLASS 1)
-------------------------------
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ............................................. $ 547,968 $ 946,710
------------- -------------
EXPENSES:
Insurance charges ..................................... 148,471 177,689
------------- -------------
Net investment income (loss) ...................... 399,497 769,021
------------- -------------

REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ...................... 4,030,847 2,499,690
Cost of investments sold ............................ 4,239,220 2,747,815
------------- -------------

Net realized gain (loss) .......................... (208,373) (248,125)
------------- -------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year ............ 277,796 (6,936)
Unrealized gain (loss) end of year .................. (818,897) 277,796
------------- -------------

Net change in unrealized gain (loss) for the year.. (1,096,693) 284,732
------------- -------------

Net increase (decrease) in net assets
resulting from operations ......................... (905,569) 805,628
------------- -------------
UNIT TRANSACTIONS:
Participant purchase payments ......................... 943,577 1,447,960
Participant transfers from other Travelers accounts ... 993,848 1,459,526
Administrative and asset allocation charges ........... (9,234) (11,467)
Contract surrenders ................................... (1,752,214) (1,271,679)
Participant transfers to other Travelers accounts ..... (3,081,556) (2,480,553)
Other payments to participants ........................ (135,130) (35,014)
------------- -------------
Net increase (decrease) in net assets
resulting from unit transactions .................. (3,040,709) (891,227)
------------- -------------
Net increase (decrease) in net assets ............. (3,946,278) (85,599)

NET ASSETS:
Beginning of year ................................... 14,273,474 14,359,073
------------- -------------
End of year ......................................... $ 10,327,196 $ 14,273,474
============= =============
</TABLE>

-14-
<PAGE> 187

NOTES TO FINANCIAL STATEMENTS - CONTINUED

<TABLE>
<CAPTION>
TEMPLETON STOCK FUND
(CLASS 1) SOCIAL AWARENESS STOCK PORTFOLIO
------------------------------- -----------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C>
$ 34,687,128 $ 42,669,054 $ 1,051,908 $ 672,066
-------------- -------------- --------------- -----------------

4,509,412 4,894,283 624,749 354,599
-------------- -------------- --------------- -----------------
30,177,716 37,774,771 427,159 317,467
-------------- -------------- --------------- -----------------

61,403,072 54,346,711 2,208,432 2,308,800
60,060,985 41,692,625 1,666,759 1,206,061
-------------- -------------- --------------- -----------------

1,342,087 12,654,086 541,673 1,102,739
-------------- -------------- --------------- -----------------

12,920,546 63,878,387 10,483,334 4,220,553
70,838,007 12,920,546 16,093,313 10,483,334
-------------- -------------- --------------- -----------------

57,917,461 (50,957,841) 5,609,979 6,262,781
-------------- -------------- --------------- -----------------

89,437,264 (528,984) 6,578,811 7,682,987
-------------- -------------- --------------- -----------------

34,557,364 50,998,219 10,557,915 7,266,564
32,582,792 38,910,545 15,448,514 9,104,448
(347,050) (410,794) (83,042) (59,197)
(34,744,713) (25,811,154) (3,454,105) (1,702,931)
(77,716,046) (98,707,032) (7,733,570) (5,233,159)
(1,078,691) (712,616) (608,016) (467)
-------------- -------------- --------------- -----------------

(46,746,344) (35,732,832) 14,127,696 9,375,258
-------------- -------------- --------------- -----------------

42,690,920 (36,261,816) 20,706,507 17,058,245

363,615,535 399,877,351 37,811,626 20,753,381
-------------- -------------- --------------- -----------------

$ 406,306,455 $ 363,615,535 $ 58,518,133 $ 37,811,626
============== ============== =============== =================
</TABLE>

<TABLE>
<CAPTION>
DISCIPLINED MID CAP STOCK U.S. GOVERNMENT SECURITIES
PORTFOLIO PORTFOLIO
-------------------------------- -----------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C>
$ 86,113 $ 4,339 $ 4,167 $ 4,731,069
-------------- ------------- --------------- ---------------

26,854 5,912 602,941 559,905
-------------- ------------- --------------- ---------------
59,259 (1,573) (598,774) 4,171,164
-------------- ------------- --------------- ---------------

1,929,357 272,115 21,885,915 12,327,483
1,826,164 295,499 22,623,468 11,025,709
-------------- ------------- --------------- ---------------

103,193 (23,384) (737,553) 1,301,774
-------------- ------------- --------------- ---------------

160,004 - (765,332) 1,220,341
329,259 160,004 (2,153,771) (765,332)
-------------- ------------- --------------- ---------------

169,255 160,004 (1,388,439) (1,985,673)
-------------- ------------- --------------- ---------------

331,707 135,047 (2,724,766) 3,487,265
-------------- ------------- --------------- ---------------

438,011 169,583 4,620,645 4,550,126
2,941,597 1,552,025 15,967,766 46,331,070
(2,616) (658) (40,648) (40,986)
(346,129) (50,215) (6,990,061) (6,460,221)
(1,974,753) (362,432) (27,554,036) (23,056,732)
(995) - (395,359) (166,160)
-------------- ------------- --------------- ---------------

1,055,115 1,308,303 (14,391,693) 21,157,097
-------------- ------------- --------------- ---------------

1,386,822 1,443,350 (17,116,459) 24,644,362

1,443,350 - 58,218,268 33,573,906
-------------- ------------- --------------- ---------------

$ 2,830,172 $ 1,443,350 $ 41,101,809 $ 58,218,268
============== ============= =============== ===============
</TABLE>

-15-
<PAGE> 188

NOTES TO FINANCIAL STATEMENTS - CONTINUED

8. SCHEDULE OF FUND U OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998 (CONTINUED)

UTILITIES PORTFOLIO ALLIANCE GROWTH PORTFOLIO
------------------------------- -------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ............................................. $ 2,488,637 $ 1,230,537 $ 5,606,858 $ 3,806,491
------------- --------------- -------------- ---------------
EXPENSES:
Insurance charges ..................................... 409,404 318,646 1,270,547 755,688
------------- --------------- -------------- ---------------
Net investment income (loss) ...................... 2,079,233 911,891 4,336,311 3,050,803
------------- --------------- -------------- ---------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ...................... 9,199,950 3,706,928 9,117,467 6,101,233
Cost of investments sold ............................ 8,020,463 2,799,586 7,176,217 4,284,568
------------- --------------- -------------- ---------------

Net realized gain (loss) .......................... 1,179,487 907,342 1,941,250 1,816,665
------------- --------------- -------------- ---------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year ............ 5,891,592 3,616,391 17,345,749 7,226,780
Unrealized gain (loss) end of year .................. 2,297,237 5,891,592 40,523,040 17,345,749
------------- --------------- -------------- ---------------

Net change in unrealized gain (loss) for the year.. (3,594,355) 2,275,201 23,177,291 10,118,969
------------- --------------- -------------- ---------------
Net increase (decrease) in net assets
resulting from operations ......................... (335,635) 4,094,434 29,454,852 14,986,437
------------- --------------- -------------- ---------------

UNIT TRANSACTIONS:
Participant purchase payments ......................... 3,756,810 3,282,295 18,228,487 17,511,898
Participant transfers from other Travelers accounts ... 9,694,724 14,975,019 30,097,853 30,296,505
Administrative and asset allocation charges ........... (27,627) (24,711) (140,321) (107,469)
Contract surrenders ................................... (3,337,767) (1,966,420) (8,611,187) (2,842,283)
Participant transfers to other Travelers accounts ..... (12,574,282) (9,004,651) (21,829,799) (16,431,733)
Other payments to participants ........................ (211,562) (253,985) (555,864) (37,359)
------------- --------------- -------------- ---------------
Net increase (decrease) in net assets
resulting from unit transactions .................. (2,699,704) 7,007,547 17,189,169 28,389,559
------------- --------------- -------------- ---------------
Net increase (decrease) in net assets ............. (3,035,339) 11,101,981 46,644,021 43,375,996

NET ASSETS:
Beginning of year ................................... 32,242,764 21,140,783 84,214,600 40,838,604
------------- --------------- -------------- ---------------

End of year ......................................... $ 29,207,425 $ 32,242,764 $ 130,858,621 $ 84,214,600
============= =============== ============== ===============
</TABLE>

INVESCO STRATEGIC INCOME
PORTFOLIO
--------------------------------
1999 1998
---- ----
<S> <C> <C>
INVESTMENT INCOME:
Dividends ............................................. $ 18,065 $ 33,319
-------------- ----------------
EXPENSES:
Insurance charges ..................................... 3,749 4,206
-------------- ----------------
Net investment income (loss) ...................... 14,316 29,113
-------------- ----------------
REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ...................... 253,084 890,614
Cost of investments sold ............................ 289,265 878,724
-------------- ----------------

Net realized gain (loss) .......................... (36,181) 11,890
-------------- ----------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year ............ (42,635) 6,975
Unrealized gain (loss) end of year .................. (31,222) (42,635)
-------------- ----------------

Net change in unrealized gain (loss) for the year.. 11,413 (49,610)
-------------- ----------------
Net increase (decrease) in net assets
resulting from operations ......................... (10,452) (8,607)
-------------- ----------------

UNIT TRANSACTIONS:
Participant purchase payments ......................... 56,498 77,651
Participant transfers from other Travelers accounts ... 136,771 842,460
Administrative and asset allocation charges ........... (511) (592)
Contract surrenders ................................... (111,259) (23,054)
Participant transfers to other Travelers accounts ..... (144,817) (871,710)
Other payments to participants ........................ (1,565) -
-------------- ----------------
Net increase (decrease) in net assets
resulting from unit transactions .................. (64,883) 24,755
-------------- ----------------
Net increase (decrease) in net assets ............. (75,335) 16,148

NET ASSETS:
Beginning of year ................................... 346,697 330,549
-------------- ----------------

End of year ......................................... $ 271,362 $ 346,697
============== ================
</TABLE>

-16-
<PAGE> 189

NOTES TO FINANCIAL STATEMENTS - CONTINUED

<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED INCOME
MFS TOTAL RETURN PORTFOLIO PORTFOLIO
-------------------------------- ----------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C>

$ 3,125,773 $ 1,488,852 $ 511,532 $ 385,914
--------------- --------------- ---------------- ----------------

536,324 408,402 109,708 108,989
--------------- --------------- ---------------- ----------------
2,589,449 1,080,450 401,824 276,925
--------------- --------------- ---------------- ----------------

5,098,710 662,935 3,278,307 1,403,350
4,617,723 455,479 3,413,409 1,323,174
--------------- --------------- ---------------- ----------------

480,987 207,456 (135,102) 80,176
--------------- --------------- ---------------- ----------------

5,410,168 3,538,470 (95,821) 368,087
2,864,384 5,410,168 (384,721) (95,821)
--------------- --------------- ---------------- ----------------

(2,545,784) 1,871,698 (288,900) (463,908)
--------------- --------------- ---------------- ----------------

524,652 3,159,604 (22,178) (106,807)
--------------- --------------- ---------------- ----------------

6,211,232 8,301,748 1,741,350 2,366,619
5,827,505 9,974,351 1,078,015 3,239,345
(50,268) (43,407) (10,162) (10,084)
(2,639,351) (1,227,990) (1,165,164) (816,530)
(8,422,051) (3,091,160) (2,854,194) (1,678,866)
(183,580) (60,584) (15,177) -
--------------- --------------- ---------------- ----------------

743,487 13,852,958 (1,225,332) 3,100,484
--------------- --------------- ---------------- ----------------
1,268,139 17,012,562 (1,247,510) 2,993,677

40,904,588 23,892,026 9,624,915 6,631,238
--------------- --------------- ---------------- ----------------

$ 42,172,727 $ 40,904,588 $ 8,377,405 $ 9,624,915
=============== =============== ================ ================
</TABLE>

<TABLE>
<CAPTION>
SMITH BARNEY INTERNATIONAL SMITH BARNEY HIGH INCOME
EQUITY PORTFOLIO PORTFOLIO
-------------------------------- ---------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C>

$ 40,866 $ - $ 225,443 $ 214,361
--------------- --------------- ----------------- --------------

173,802 138,274 40,964 35,412
--------------- --------------- ----------------- --------------
(132,936) (138,274) 184,479 178,949
--------------- --------------- ----------------- --------------

79,829,724 48,181,535 3,524,627 923,721
74,904,332 48,355,372 3,738,297 886,215
--------------- --------------- ----------------- --------------

4,925,392 (173,837) (213,670) 37,506
--------------- --------------- ----------------- --------------

676,330 (372,217) (184,818) 97,305
5,551,723 676,330 (107,800) (184,818)
--------------- --------------- ----------------- --------------

4,875,393 1,048,547 77,018 (282,123)
--------------- --------------- ----------------- --------------

9,667,849 736,436 47,827 (65,668)
--------------- --------------- ----------------- --------------

2,255,537 2,672,639 651,669 1,128,337
97,770,050 56,343,156 3,433,058 1,572,316
(22,391) (19,768) (5,303) (5,146)
(1,086,552) (522,579) (254,074) (93,320)
(92,516,457) (57,640,335) (3,655,539) (1,202,278)
(273,712) (782) (1,660) (19,263)
--------------- --------------- ----------------- --------------

6,126,475 832,331 168,151 1,380,646
--------------- --------------- ----------------- --------------
15,794,324 1,568,767 215,978 1,314,978

11,790,989 10,222,222 3,159,821 1,844,843
--------------- --------------- ----------------- --------------

$ 27,585,313 $ 11,790,989 $ 3,375,799 $ 3,159,821
=============== =============== ================= ==============
</TABLE>

-17-
<PAGE> 190

NOTES TO FINANCIAL STATEMENTS - CONTINUED

8. SCHEDULE OF FUND U OPERATIONS AND CHANGES IN NET ASSETS FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998 (CONTINUED)

<TABLE>
<CAPTION>
SMITH BARNEY LARGE CAP VALUE
PORTFOLIO COMBINED
-------------------------------- -------------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
INVESTMENT INCOME:
Dividends ............................................. $ 961,493 $ 897,102 $ 442,165,724 $ 366,919,897
--------------- --------------- --------------- ----------------
EXPENSES:
Insurance charges ..................................... 333,476 299,909 79,327,353 65,378,641
--------------- --------------- --------------- ----------------
Net investment income (loss) ...................... 628,017 597,193 362,838,371 301,541,256
--------------- --------------- --------------- ----------------

REALIZED GAIN (LOSS) AND CHANGE IN UNREALIZED
GAIN (LOSS) ON INVESTMENTS:
Realized gain (loss) from investment transactions:
Proceeds from investments sold ...................... 4,847,619 2,825,617 724,840,180 465,819,528
Cost of investments sold ............................ 4,164,494 1,987,645 618,721,402 340,260,334
--------------- --------------- --------------- ----------------

Net realized gain (loss) .......................... 683,125 837,972 106,118,778 125,559,194
--------------- --------------- --------------- ----------------
Change in unrealized gain (loss) on investments:
Unrealized gain (loss) beginning of year ............ 3,816,394 3,440,973 1,383,867,788 956,362,708
Unrealized gain (loss) end of year .................. 2,144,725 3,816,394 2,215,572,645 1,383,867,788
--------------- --------------- --------------- ----------------

Net change in unrealized gain (loss) for the year.. (1,671,669) 375,421 831,704,857 427,505,080
--------------- --------------- --------------- ----------------
Net increase (decrease) in net assets
resulting from operations ......................... (360,527) 1,810,586 1,300,662,006 854,605,530
--------------- --------------- --------------- ----------------

UNIT TRANSACTIONS:
Participant purchase payments ......................... 4,721,304 5,310,704 758,823,301 788,454,196
Participant transfers from other Travelers accounts ... 4,453,136 5,931,747 1,069,251,529 991,422,546
Administrative and asset allocation charges ........... (34,570) (36,531) (21,676,748) (20,522,746)
Contract surrenders ................................... (2,116,000) (1,366,854) (578,809,057) (364,757,379)
Participant transfers to other Travelers accounts ..... (5,997,410) (5,560,783) (1,230,265,377) (1,021,491,251)
Other payments to participants ........................ (327,116) (62,496) (16,624,427) (10,989,089)
--------------- --------------- --------------- ----------------
Net increase (decrease) in net assets
resulting from unit transactions .................. 699,344 4,215,787 (19,300,779) 362,116,277
--------------- --------------- --------------- ----------------

Net increase (decrease) in net assets ............. 338,817 6,026,373 1,281,361,227 1,216,721,807

NET ASSETS:
Beginning of year ................................... 26,063,378 20,037,005 5,887,195,358 4,670,473,551
--------------- --------------- --------------- ----------------

End of year ......................................... $ 26,402,195 $ 26,063,378 $ 7,168,556,585 $ 5,887,195,358
=============== =============== =============== ================
</TABLE>

-18-
<PAGE> 191

NOTES TO FINANCIAL STATEMENTS - CONTINUED

9. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND U FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998

<TABLE>
<CAPTION>
AMERICAN ODYSSEY CORE AMERICAN ODYSSEY EMERGING
EQUITY FUND OPPORTUNITIES FUND
----------------------------- ------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year ......................... 187,872,118 185,895,286 187,717,148 162,145,977
Accumulation units purchased and
transferred from other Travelers accounts.. 38,287,489 51,119,051 52,605,446 69,443,965
Accumulation units redeemed and
transferred to other Travelers accounts ... (49,614,095) (49,141,159) (58,365,549) (43,868,898)
Annuity units ............................... (3,288) (1,060) (1,805) (3,896)
------------ -------------- ------------- --------------
Accumulation and annuity units
end of year ............................... 176,542,224 187,872,118 181,955,240 187,717,148
============ ============== ============= ==============
</TABLE>

<TABLE>
<CAPTION>
AMERICAN ODYSSEY GLOBAL HIGH-
YIELD BOND FUND
------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year ......................... 70,747,253 48,928,831
Accumulation units purchased and
transferred from other Travelers accounts.. 18,452,650 55,863,221
Accumulation units redeemed and
transferred to other Travelers accounts ... (18,470,618) (34,044,625)
Annuity units ............................... (331) (174)
------------- --------------
Accumulation and annuity units
end of year ............................... 70,728,954 70,747,253
============= ==============
</TABLE>

<TABLE>
<CAPTION>
AMERICAN ODYSSEY INTERMEDIATE- AMERICAN ODYSSEY INTERNATIONAL
TERM BOND FUND EQUITY FUND
------------------------------ ------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year ......................... 93,456,080 86,914,035 161,689,822 143,959,193
Accumulation units purchased and
transferred from other Travelers accounts.. 20,210,357 42,470,104 35,323,719 52,587,915
Accumulation units redeemed and
transferred to other Travelers accounts ... (26,442,869) (35,926,504) (49,017,304) (34,858,767)
Annuity units ............................... (6,218) (1,555) (2,531) 1,481
------------ ------------ ------------ -------------
Accumulation and annuity units
end of year ............................... 87,217,350 93,456,080 147,993,706 161,689,822
============ ============ ============ =============
</TABLE>

<TABLE>
<CAPTION>
AMERICAN ODYSSEY LONG-TERM
BOND FUND
-----------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year ......................... 170,066,956 159,728,032
Accumulation units purchased and
transferred from other Travelers accounts.. 40,239,876 61,724,429
Accumulation units redeemed and
transferred to other Travelers accounts ... (46,478,714) (51,384,748)
Annuity units ............................... (6,549) (757)
------------ -------------
Accumulation and annuity units
end of year ............................... 163,821,569 170,066,956
============ =============
</TABLE>

<TABLE>
<CAPTION>
CAPITAL APPRECIATION FUND DREYFUS STOCK INDEX FUND
------------------------------ ------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year ......................... 116,306,330 94,040,565 147,530,631 109,316,975
Accumulation units purchased and
transferred from other Travelers accounts.. 64,997,825 51,253,792 61,323,838 78,673,391
Accumulation units redeemed and
transferred to other Travelers accounts ... (38,410,346) (28,979,462) (40,019,013) (40,448,140)
Annuity units ............................... (13,718) (8,565) (16,330) (11,595)
------------ ------------ ------------ -------------
Accumulation and annuity units
end of year ............................... 142,880,091 116,306,330 168,819,126 147,530,631
============ ============ ============ =============
</TABLE>

<TABLE>
<CAPTION>
SMALL CAP PORTFOLIO
-----------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year ......................... 4,814,869 -
Accumulation units purchased and
transferred from other Travelers accounts.. 19,642,815 13,843,963
Accumulation units redeemed and
transferred to other Travelers accounts ... (15,721,018) (9,029,094)
Annuity units ............................... (93) -
------------ -------------
Accumulation and annuity units
end of year ............................... 8,736,573 4,814,869
============ =============
</TABLE>

-19-
<PAGE> 192

NOTES TO FINANCIAL STATEMENTS - CONTINUED

9. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND U FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998 (CONTINUED)

<TABLE>
<CAPTION>
EQUITY-INCOME PORTFOLIO GROWTH PORTFOLIO
------------------------------ -----------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year ......................... 243,963,799 237,049,548 295,980,481 289,001,967
Accumulation units purchased and
transferred from other Travelers accounts.. 36,393,892 57,116,973 70,553,262 62,734,395
Accumulation units redeemed and
transferred to other Travelers accounts ... (63,628,932) (50,174,806) (64,700,033) (55,736,282)
Annuity units ............................... (20,976) (27,916) (18,376) (19,599)
------------ ------------ ------------ ------------
Accumulation and annuity units
end of year ............................... 216,707,783 243,963,799 301,815,334 295,980,481
============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
HIGH INCOME PORTFOLIO
-----------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year ......................... 49,346,978 48,895,121
Accumulation units purchased and
transferred from other Travelers accounts.. 13,423,439 19,272,033
Accumulation units redeemed and
transferred to other Travelers accounts ... (18,844,863) (18,815,614)
Annuity units ............................... (3,763) (4,562)
------------ ------------
Accumulation and annuity units
end of year ............................... 43,921,791 49,346,978
============ ============
</TABLE>

<TABLE>
<CAPTION>
ASSET MANAGER PORTFOLIO HIGH YIELD BOND TRUST
----------------------------- -----------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year ......................... 226,655,322 240,063,870 7,970,201 7,646,747
Accumulation units purchased and
transferred from other Travelers accounts.. 20,386,501 28,144,055 2,704,576 4,396,698
Accumulation units redeemed and
transferred to other Travelers accounts ... (53,476,965) (41,539,270) (3,457,030) (4,072,453)
Annuity units ............................... (15,911) (13,333) (1,126) (791)
------------ ------------ ------------ ------------
Accumulation and annuity units
end of year ............................... 193,548,947 226,655,322 7,216,621 7,970,201
============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
MANAGED ASSETS TRUST
-----------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year ......................... 59,858,513 59,004,559
Accumulation units purchased and
transferred from other Travelers accounts.. 11,673,649 10,499,495
Accumulation units redeemed and
transferred to other Travelers accounts ... (10,313,037) (9,624,228)
Annuity units ............................... (8,504) (21,313)
------------ ------------
Accumulation and annuity units
end of year ............................... 61,210,621 59,858,513
============ ============
</TABLE>

<TABLE>
<CAPTION>
TEMPLETON ASSET ALLOCATION FUND TEMPLETON BOND FUND
(CLASS 1) (CLASS 1)
----------------------------- -----------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year ......................... 105,823,748 124,603,105 9,862,746 10,501,579
Accumulation units purchased and
transferred from other Travelers accounts.. 12,297,130 15,521,675 1,404,308 2,078,814
Accumulation units redeemed and
transferred to other Travelers accounts ... (29,562,461) (34,295,026) (3,588,404) (2,715,176)
Annuity units ............................... (7,800) (6,006) (2,493) (2,471)
------------ ------------ ------------ ------------
Accumulation and annuity units
end of year ............................... 88,550,617 105,823,748 7,676,157 9,862,746
============ ============ ============ ============
</TABLE>

<TABLE>
<CAPTION>
TEMPLETON STOCK FUND
(CLASS 1)
-----------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year ......................... 164,479,451 180,875,987
Accumulation units purchased and
transferred from other Travelers accounts.. 27,812,195 39,423,108
Accumulation units redeemed and
transferred to other Travelers accounts ... (48,120,691) (55,795,848)
Annuity units ............................... (22,593) (23,796)
------------ ------------
Accumulation and annuity units
end of year ............................... 144,148,362 164,479,451
============ ============
</TABLE>

-20-
<PAGE> 193

NOTES TO FINANCIAL STATEMENTS - CONTINUED

9. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND U FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998 (CONTINUED)

<TABLE>
<CAPTION>
DISCIPLINED MID CAP
SOCIAL AWARENESS STOCK PORTFOLIO STOCK PORTFOLIO
-------------------------------- --------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year ......................... 13,304,949 9,539,133 1,388,007 -
Accumulation units purchased and
transferred from other Travelers accounts.. 8,599,489 6,610,923 3,285,564 1,841,704
Accumulation units redeemed and
transferred to other Travelers accounts ... (3,905,550) (2,845,107) (2,244,873) (453,697)
Annuity units ............................... - - - -
----------- ----------- ----------- -----------
Accumulation and annuity units
end of year ............................... 17,998,888 13,304,949 2,428,698 1,388,007
=========== =========== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
U.S. GOVERNMENT
SECURITIES PORTFOLIO
---------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year ......................... 36,339,224 22,809,036
Accumulation units purchased and
transferred from other Travelers accounts.. 13,155,672 32,683,383
Accumulation units redeemed and
transferred to other Travelers accounts ... (22,384,521) (19,145,101)
Annuity units ............................... (9,060) (8,094)
----------- -----------
Accumulation and annuity units
end of year ............................... 27,101,315 36,339,224
=========== ===========
</TABLE>

UTILITIES PORTFOLIO ALLIANCE GROWTH PORTFOLIO
---------------------------- ----------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year ......................... 16,377,929 12,539,047 31,613,033 19,535,233
Accumulation units purchased and
transferred from other Travelers accounts.. 6,842,483 10,054,198 16,724,519 20,780,277
Accumulation units redeemed and
transferred to other Travelers accounts ... (8,185,200) (6,215,316) (10,729,357) (8,702,013)
Annuity units ............................... - - (333) (464)
----------- ----------- ----------- -----------
Accumulation and annuity units
end of year ............................... 15,035,212 16,377,929 37,607,862 31,613,033
=========== =========== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
INVESCO STRATEGIC
INCOME PORTFOLIO
---------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year ......................... 239,757 222,251
Accumulation units purchased and
transferred from other Travelers accounts.. 137,682 606,119
Accumulation units redeemed and
transferred to other Travelers accounts ... (183,962) (588,613)
Annuity units ............................... - -
----------- -----------
Accumulation and annuity units
end of year ............................... 193,477 239,757
=========== ===========
</TABLE>

<TABLE>
<CAPTION>
PUTNAM DIVERSIFIED
MFS TOTAL RETURN PORTFOLIO INCOME PORTFOLIO
---------------------------- --------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year ......................... 22,751,440 14,655,213 7,549,029 5,170,756
Accumulation units purchased and
transferred from other Travelers accounts.. 6,611,405 10,669,351 2,223,051 4,334,575
Accumulation units redeemed and
transferred to other Travelers accounts ... (6,214,287) (2,568,202) (3,191,832) (1,956,302)
Annuity units ............................... (6,169) (4,922) - -
----------- ----------- ----------- -----------
Accumulation and annuity units
end of year ............................... 23,142,389 22,751,440 6,580,248 7,549,029
=========== =========== =========== ===========
</TABLE>

<TABLE>
<CAPTION>
SMITH BARNEY INTERNATIONAL
EQUITY PORTFOLIO
---------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year ......................... 8,375,884 7,634,378
Accumulation units purchased and
transferred from other Travelers accounts.. 62,248,325 42,750,259
Accumulation units redeemed and
transferred to other Travelers accounts ... (58,795,696) (42,008,753)
Annuity units ............................... - -
----------- -----------
Accumulation and annuity units
end of year ............................... 11,828,513 8,375,884
=========== ===========
</TABLE>

-21-
<PAGE> 194

NOTES TO FINANCIAL STATEMENTS - CONTINUED

9. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS FOR FUND U FOR THE YEARS ENDED
DECEMBER 31, 1999 AND 1998 (CONTINUED)

<TABLE>
<CAPTION>
SMITH BARNEY HIGH SMITH BARNEY LARGE
INCOME PORTFOLIO CAP VALUE PORTFOLIO
-------------------------- ---------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Accumulation and annuity units
beginning of year ......................... 2,256,378 1,306,786 13,037,850 10,871,165
Accumulation units purchased and
transferred from other Travelers accounts.. 2,908,686 1,882,320 4,458,521 5,821,643
Accumulation units redeemed and
transferred to other Travelers accounts ... (2,785,902) (932,728) (4,130,500) (3,653,910)
Annuity units ............................... - - (1,008) (1,048)
----------- ----------- ----------- ------------
Accumulation and annuity units
end of year ............................... 2,379,162 2,256,378 13,364,863 13,037,850
=========== =========== =========== ============
</TABLE>

<TABLE>
<CAPTION>
COMBINED
--------------------------------
1999 1998
---- ----
<S> <C> <C>
Accumulation and annuity units
beginning of year ......................... 2,457,375,926 2,292,854,375
Accumulation units purchased and
transferred from other Travelers accounts.. 674,928,364 854,201,829
Accumulation units redeemed and
transferred to other Travelers accounts ... (760,983,622) (689,519,842)
Annuity units ............................... (168,975) (160,436)
-------------- --------------
Accumulation and annuity units
end of year ............................... 2,371,151,693 2,457,375,926
============== ==============
</TABLE>

-22-
<PAGE> 195

INDEPENDENT AUDITORS' REPORT

To the Owners of Variable Annuity Contracts of The Travelers Fund U for Variable
Annuities:

We have audited the accompanying statement of assets and liabilities of The
Travelers Fund U for Variable Annuities as of December 31, 1999, and the related
statement of operations for the year then ended and the statement of changes in
net assets for each of the two years in the period then ended. These financial
statements are the responsibility of management. Our responsibility is to
express an opinion on these financial statements 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 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 shares owned as of December 31, 1999, by correspondence with the
underlying funds. 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 referred to above present fairly, in
all material respects, the financial position of The Travelers Fund U for
Variable Annuities as of December 31, 1999, the results of its operations for
the year then ended and the changes in its net assets for each of the two years
in the period then ended, in conformity with generally accepted accounting
principles.

/s/ KPMG LLP

Hartford, Connecticut
February 18, 2000

-23-
<PAGE> 196

Independent Auditors
KPMG LLP
Hartford, Connecticut

This report is prepared for the general information of contract owners and is
not an offer of shares of The Travelers Fund U for Variable Annuities or Fund
U's underlying funds. It should not be used in connection with any offer except
in conjunction with the Prospectus for The Travelers Fund U for Variable
Annuities product(s) offered by The Travelers Insurance Company and the
Prospectuses for the underlying funds, which collectively contain all pertinent
information, including the applicable sales commissions.

VG-FNDU (Annual) (12-99) Printed in U.S.A.
<PAGE> 197
INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholder
The Travelers Insurance Company and Subsidiaries:

We have audited the accompanying consolidated balance sheets of The Travelers
Insurance Company and Subsidiaries as of December 31, 1999 and 1998, and the
related consolidated statements of income, changes in retained earnings and
accumulated other changes in equity from non-owner sources and cash flows for
each of the years in the three-year period ended December 31, 1999. These
consolidated financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these consolidated
financial statements 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 are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Travelers
Insurance Company and Subsidiaries as of December 31, 1999 and 1998, and the
results of their operations and their cash flows for each of the years in the
three-year period ended December 31, 1999, in conformity with generally accepted
accounting principles.

/s/ KPMG LLP
Hartford, Connecticut
January 18, 2000

F-1
<PAGE> 198
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
($ in millions)

FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
---- ---- ----

<S> <C> <C> <C>
REVENUES
Premiums $1,738 $1,740 $1,583
Net investment income 2,506 2,185 2,037
Realized investment gains 113 149 199
Other revenues 521 440 354
- -------------------------------------------------------------------------------------------------- ------------- -------------
Total Revenues 4,878 4,514 4,173
- -------------------------------------------------------------------------------------------------- ------------- -------------

BENEFITS AND EXPENSES
Current and future insurance benefits 1,515 1,475 1,341
Interest credited to contractholders 937 876 829
Amortization of deferred acquisition costs 315 275 252
General and administrative expenses 519 505 468
- -------------------------------------------------------------------------------------------------- ------------- -------------
Total Benefits and Expenses 3,286 3,131 2,890
- -------------------------------------------------------------------------------------------------- ------------- -------------

Income from continuing operations before federal income taxes 1,592 1,383 1,283
- -------------------------------------------------------------------------------------------------- ------------- -------------

Federal income tax expense
Current 409 442 434
Deferred 136 39 10
- -------------------------------------------------------------------------------------------------- ------------- -------------
Total Federal Income Taxes 545 481 444
- -------------------------------------------------------------------------------------------------- ------------- -------------
Net income $1,047 $902 $839
================================================================================================== ============= =============
</TABLE>

See Notes to Consolidated Financial Statements.

F-2
<PAGE> 199
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in millions)

DECEMBER 31, 1999 1998
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Fixed maturities, available for sale at fair value (cost, $24,500, $22,973) $23,866 $23,893
Equity securities, at fair value (cost, $691, $474) 784 518
Mortgage loans 2,285 2,606
Real estate held for sale 236 143
Policy loans 1,258 1,857
Short-term securities 1,283 1,098
Trading securities, at market value 1,678 1,186
Other invested assets 2,098 2,251
- ----------------------------------------------------------------------------------------------------------------------------
Total Investments 33,488 33,552
- ----------------------------------------------------------------------------------------------------------------------------

Cash 85 65
Investment income accrued 395 393
Premium balances receivable 178 99
Reinsurance recoverables 3,234 3,387
Deferred acquisition costs 2,688 2,317
Separate and variable accounts 22,199 15,313
Other assets 1,264 1,422
- ----------------------------------------------------------------------------------------------------------------------------
Total Assets $63,531 $56,548
- ----------------------------------------------------------------------------------------------------------------------------

LIABILITIES
Contractholder funds $17,567 $16,739
Future policy benefits and claims 12,563 12,326
Separate and variable accounts 22,194 15,305
Deferred federal income taxes 23 422
Trading securities sold not yet purchased, at market value 1,098 873
Other liabilities 2,466 2,783
- ----------------------------------------------------------------------------------------------------------------------------
Total Liabilities 55,911 48,448
- ----------------------------------------------------------------------------------------------------------------------------

SHAREHOLDER'S EQUITY
Common stock, par value $2.50; 40 million shares authorized, issued and outstanding 100 100
Additional paid-in capital 3,819 3,800
Retained earnings 4,099 3,602
Accumulated other changes in equity from non-owner sources (398) 598
- ----------------------------------------------------------------------------------------------------------------------------
Total Shareholder's Equity 7,620 8,100
- ----------------------------------------------------------------------------------------------------------------------------

Total Liabilities and Shareholder's Equity $63,531 $56,548
============================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.

F-3
<PAGE> 200
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED EARNINGS AND
ACCUMULATED OTHER CHANGES IN EQUITY FROM NON-OWNER SOURCES
($ in millions)

- -----------------------------------------------------------------------------------------------------------
STATEMENTS OF CHANGES IN RETAINED EARNINGS 1999 1998 1997
- -----------------------------------------------------------------------------------------------------------

<S> <C> <C> <C>
Balance, beginning of year $3,602 $2,810 $2,471
Net income 1,047 902 839
Dividends to parent 550 110 500
- -----------------------------------------------------------------------------------------------------------
Balance, end of year $4,099 $3,602 $2,810
===========================================================================================================

- -----------------------------------------------------------------------------------------------------------
STATEMENTS OF ACCUMULATED OTHER CHANGES
IN EQUITY FROM NON-OWNER SOURCES
- -----------------------------------------------------------------------------------------------------------

Balance, beginning of year $598 $535 $223
Unrealized gains (losses), net of tax (996) 62 313
Foreign currency translation, net of tax 0 1 (1)
- -----------------------------------------------------------------------------------------------------------
Balance, end of year $(398) $598 $535
===========================================================================================================

- -----------------------------------------------------------------------------------------------------------
SUMMARY OF CHANGES IN EQUITY
FROM NON-OWNER SOURCES
- -----------------------------------------------------------------------------------------------------------

Net Income $1,047 $902 $839
Other changes in equity from non-owner sources (996) 63 312
- -----------------------------------------------------------------------------------------------------------
Total changes in equity from non-owner sources $51 $965 $1,151
===========================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.

F-4
<PAGE> 201
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
($ in millions)

FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Premiums collected $1,715 $1,763 $1,519
Net investment income received 2,365 2,021 2,059
Other revenues received 537 419 373
Benefits and claims paid (1,094) (1,127) (1,230)
Interest credited to contractholders (958) (918) (853)
Operating expenses paid (1,013) 751) (638)
Income taxes paid (393) (506) (368)
Trading account investments purchases, net (80) (38) (54)
Other (104) 12 18
- ---------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Operating Activities 975 875 826
- ---------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investments
Fixed maturities 4,103 2,608 2,259
Mortgage loans 662 722 663
Proceeds from sales of investments
Fixed maturities 12,562 13,390 7,592
Equity securities 100 212 341
Mortgage loans - - 207
Real estate held for sale 219 53 169
Purchases of investments
Fixed maturities (18,129) (18,072) (11,143)
Equity securities (309) (194) (483)
Mortgage loans (470) 457) (771)
Policy loans, net 599 15 38
Short-term securities (purchases) sales, net 316 495) (2)
Other investments purchases, net (413) (550) (260)
Securities transactions in course of settlement, net (463) 192 311
- ---------------------------------------------------------------------------------------------------------------------
Net Cash Used in Investing Activities (1,223) (2,576) (1,079)
- ---------------------------------------------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES
Redemption of commercial paper, net - - (50)
Contractholder fund deposits 5,764 4,383 3,544
Contractholder fund withdrawals (4,946) (2,565) (2,757)
Dividends to parent company (550) (110) (500)
- ---------------------------------------------------------------------------------------------------------------------
Net Cash Provided by Financing Activities 268 1,708 237
- ---------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in cash 20 7 (16)
- ---------------------------------------------------------------------------------------------------------------------
Cash at December 31, $85 $65 $58
====================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.

F-5
<PAGE> 202
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies used in the preparation of the accompanying
financial statements follow.

Basis of Presentation

The Travelers Insurance Company (TIC), together with its subsidiaries (the
Company), is a wholly owned subsidiary of The Travelers Insurance Group
Inc. (TIGI), an indirect wholly owned subsidiary of Citigroup Inc.
(Citigroup). The consolidated financial statements include the accounts of
the Company and its insurance and non-insurance subsidiaries on a fully
consolidated basis. The primary insurance entities of the Company are TIC
and its subsidiaries, The Travelers Life and Annuity Company (TLAC),
Primerica Life Insurance Company (Primerica Life), and its subsidiaries,
Primerica Life Insurance Company of Canada and National Benefit Life
Insurance Company (NBL).

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 benefits and
expenses during the reporting period. Actual results could differ from
those estimates.

Certain prior year amounts have been reclassified to conform to the 1999
presentation.

ACCOUNTING CHANGES

Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities

Effective January 1, 1997, the Company adopted Statement of Financial
Accounting Standards No. 125, "Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities" (FAS 125). This
statement establishes accounting and reporting standards for transfers and
servicing of financial assets and extinguishments of liabilities. These
standards are based on an approach that focuses on control. Under this
approach, after a transfer of financial assets, an entity recognizes the
financial and servicing assets it controls and the liabilities it has
incurred, derecognizes financial assets when control has been surrendered
and derecognizes liabilities when extinguished. FAS 125 provides standards
for distinguishing transfers of financial assets that are sales from
transfers that are secured borrowings. Effective January 1, 1998, the
Company adopted the collateral provisions of FAS 125 that were not
effective until 1998 in accordance with Statement of Financial Accounting
Standards No. 127, "Deferral of the Effective Date of Certain Provisions of
SFAS 125." The adoption of the collateral provisions of FAS 125 created
additional assets and liabilities on the Company's consolidated statement
of financial position related to the recognition of securities provided and
received as collateral. There was no impact on the Company's results of
operations from the adoption of the collateral provisions of FAS 125.

F-6
<PAGE> 203
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Accounting for the Costs of Computer Software Developed or Obtained for
Internal Use During the third quarter of 1998, the Company adopted
(effective January 1, 1998) the Accounting Standards Executive Committee of
the American Institute of Certified Public Accountants' 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. The adoption of SOP 98-1 did not have a material impact on the
Company's financial condition, results of operations or liquidity.

Accounting by Insurance and Other Enterprises for Insurance - Related
Assessments

In January 1999, the Company adopted (effective January 1, 1999) 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. The adoption of this SOP
had no impact on the Company's financial condition, results of operations
or liquidity.

ACCOUNTING POLICIES

Investments
Fixed maturities include bonds, notes and redeemable preferred stocks. Fair
values of investments in fixed maturities are based on quoted market prices
or dealer quotes or, if these are not available, discounted expected cash
flows using market rates commensurate with the credit quality and maturity
of the investment. Also included in fixed maturities are loan-backed and
structured securities, which are amortized using the retrospective method.
The effective yield used to determine amortization is calculated based upon
actual historical and projected future cash flows, which are obtained from
a widely-accepted securities data provider. Fixed maturities are classified
as "available for sale" and are reported at fair value, with unrealized
investment gains and losses, net of income taxes, charged or credited
directly to shareholder's equity.

Equity securities, which include common and nonredeemable preferred stocks,
are classified as "available for sale" and carried at fair value based
primarily on quoted market prices. Changes in fair values of equity
securities are charged or credited directly to shareholder's equity, net of
income taxes.

Mortgage loans are carried at amortized cost. A mortgage loan is considered
impaired when it is probable that the Company will be unable to collect
principal and interest amounts due. For mortgage loans that are determined
to be impaired, a reserve is established for the difference between the
amortized cost and fair market value of the underlying collateral. In
estimating fair value, the Company uses interest rates reflecting the
higher returns required in the current real estate financing market.
Impaired loans were insignificant at December 31, 1999 and 1998.

F-7
<PAGE> 204
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Real estate held for sale is carried at the lower of cost or fair value
less estimated cost to sell. Fair value of foreclosed properties is
established at the time of foreclosure by internal analysis or external
appraisers, using discounted cash flow analyses and other accepted
techniques. Thereafter, an allowance for losses on real estate held for
sale is established if the carrying value of the property exceeds its
current fair value less estimated costs to sell. There was no such
allowance at December 31, 1999 and 1998.

Trading securities and related liabilities are normally held for periods
less than six months. These investments are marked to market with the
change recognized in net investment income during the current period.

Short-term securities, consisting primarily of money market instruments and
other debt issues purchased with a maturity of less than one year, are
carried at amortized cost which approximates market.

Other invested assets include partnership investments and real estate joint
ventures accounted for on the equity method of accounting. Undistributed
income is reported in net investment income.

Accrual of income is suspended on fixed maturities or mortgage loans that
are in default, or on which it is likely that future payments will not be
made as scheduled. Interest income on investments in default is recognized
only as payment is received.

DERIVATIVE FINANCIAL INSTRUMENTS
The Company uses derivative financial instruments, including financial
futures contracts, options, forward contracts, interest rate swaps,
currency swaps, and equity swaps, as a means of hedging exposure to
interest rate and foreign currency risk. Hedge accounting is used to
account for derivatives. To qualify for hedge accounting the changes in
value of the derivative must be expected to substantially offset the
changes in value of the hedged item. Hedges are monitored to ensure that
there is a high correlation between the derivative instruments and the
hedged investment.

Gains and losses arising from financial futures contracts are used to
adjust the basis of hedged investments and are recognized in net investment
income over the life of the investment.

Payments to be received or made under interest rate swaps are accrued and
recognized in net investment income. Swaps hedging investments are carried
at fair value with unrealized gains and losses, net of taxes, charged or
credited directly to shareholder's equity. Interest rate and currency swaps
hedging liabilities are off-balance sheet.

Forward contracts, interest rate options and equity swaps were not
significant at December 31, 1999 and 1998. Information concerning
derivative financial instruments is included in Note 5.

INVESTMENT GAINS AND LOSSES
Realized investment gains and losses are included as a component of pre-tax
revenues based upon specific identification of the investments sold on the
trade date. Also included are gains and losses arising from the
remeasurement of the local currency value of foreign investments to U.S.
dollars, the functional currency of the Company. The foreign exchange
effects of Canadian operations are included in unrealized gains and losses.

F-8
<PAGE> 205
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

POLICY LOANS
Policy loans are carried at the amount of the unpaid balances that are not
in excess of the net cash surrender values of the related insurance
policies. The carrying value of policy loans, which have no defined
maturities, is considered to be fair value.

DEFERRED ACQUISITION COSTS
Costs of acquiring individual life insurance, annuities and long-term care
business, principally commissions and certain expenses related to policy
issuance, underwriting and marketing, all of which vary with and are
primarily related to the production of new business, are deferred.
Acquisition costs relating to traditional life insurance, including term
insurance and long-term care insurance, are amortized in relation to
anticipated premiums; universal life in relation to estimated gross
profits; and annuity contracts employing a level yield method. For life
insurance, a 15 to 20-year amortization period is used; for long-term care
business, a 10 to 20-year period is used, and a seven to 20-year period is
employed for annuities. Deferred acquisition costs are reviewed
periodically for recoverability to determine if any adjustment is required.
Adjustments, if any, are charged to income.

VALUE OF INSURANCE IN FORCE

The value of insurance in force is an asset recorded at the time of
acquisition of an insurance company. It represents the actuarially
determined present value of anticipated profits to be realized from life
insurance, annuities and health contracts at the date of acquisition using
the same assumptions that were used for computing related liabilities where
appropriate. The value of insurance in force was the actuarially determined
present value of the projected future profits discounted at interest rates
ranging from 14% to 18%. Traditional life insurance and guaranteed
renewable health policies are amortized in relation to anticipated
premiums; universal life is amortized in relation to estimated gross
profits; and annuity contracts are amortized employing a level yield
method. The value of insurance in force is reviewed periodically for
recoverability to determine if any adjustment is required. Adjustments, if
any, are charged to income.

SEPARATE AND VARIABLE ACCOUNTS
Separate and variable accounts primarily represent funds for which
investment income and investment gains and losses accrue directly to, and
investment risk is borne by, the contractholders. Each account has specific
investment objectives. The assets of each account are legally segregated
and are not subject to claims that arise out of any other business of the
Company. The assets of these accounts are carried at market value. Certain
other separate accounts provide guaranteed levels of return or benefits and
the assets of these accounts are primarily carried at market value. Amounts
assessed to the contractholders for management services are included in
revenues. Deposits, net investment income and realized investment gains and
losses for these accounts are excluded from revenues, and related liability
increases are excluded from benefits and expenses.

GOODWILL
Goodwill represents the cost of acquired businesses in excess of net assets
and is being amortized on a straight-line basis principally over a 40-year
period. The carrying amount is regularly reviewed for indication of
impairment in value that in the view of management would be other than
temporary. If it is determined that goodwill is unlikely to be recovered,
impairment is recognized on a discounted cash flow basis.

F-9
<PAGE> 206
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

CONTRACTHOLDER FUNDS
Contractholder funds represent receipts from the issuance of universal
life, corporate owned life insurance, pension investment and certain
deferred annuity contracts. Contractholder fund balances are increased by
such receipts and credited interest and reduced by withdrawals, mortality
charges and administrative expenses charged to the contractholders.
Interest rates credited to contractholder funds range from 3.5% to 10.0%.

FUTURE POLICY BENEFITS
Future policy benefits represent liabilities for future insurance policy
benefits. Benefit reserves for life insurance and annuities have been
computed based upon mortality, morbidity, persistency and interest
assumptions applicable to these coverages, which range from 2.5% to 10.0%,
including adverse deviation. These assumptions consider Company experience
and industry standards. The assumptions vary by plan, age at issue, year of
issue and duration. Appropriate recognition has been given to experience
rating and reinsurance.

OTHER LIABILITIES
Included in Other Liabilities is the Company's estimate of its liability
for guaranty fund and other insurance-related assessments. State guaranty
fund assessments are based upon the Company's share of premium written or
received in one or more years prior to an insolvency occurring in the
industry. Once an insolvency has occurred, the Company recognizes a
liability for such assessments if it is probable that an assessment will be
imposed and the amount of the assessment can be reasonably estimated. At
December 31, 1999, the Company had a liability of $21.9 million for
guaranty fund assessments and a related premium tax offset recoverable of
$4.7 million. The assessments are expected to be paid over a period of
three to five years and the premium tax offsets are expected to be realized
over a period of 10 to 15 years.

SECURITIES LOANED
Securities loaned are recorded at the amount of cash received as
collateral. The Company receives cash collateral in an amount in excess of
the market value of securities loaned. The Company monitors the market
value of securities loaned on a daily basis with additional collateral
obtained as necessary.

PERMITTED STATUTORY ACCOUNTING PRACTICES
The Company's insurance subsidiaries, domiciled principally in Connecticut
and Massachusetts, prepare statutory financial statements in accordance
with the accounting practices prescribed or permitted by the insurance
departments of the states of domicile. Prescribed statutory accounting
practices include certain publications of the National Association of
Insurance Commissioners (NAIC) as well as state laws, regulations, and
general administrative rules. Permitted statutory accounting practices
encompass all accounting practices not so prescribed. The impact of any
permitted accounting practices on statutory surplus of the Company is not
material.

The NAIC recently completed a process intended to codify statutory
accounting practices for certain insurance enterprises. As a result of this
process, the NAIC will issue a revised statutory Accounting Practices and
Procedures Manual - version effective January 1, 2001 (the revised Manual)
that will be effective for years beginning January 1, 2001. It is expected
that the State of Connecticut will require that, effective January 1, 2001,
insurance companies domiciled in Connecticut prepare their statutory basis
financial statements in accordance with the revised Manual subject to any
deviations prescribed or permitted

F-10
<PAGE> 207
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

by the Connecticut insurance commissioner. The Company has not yet
determined the impact that this change will have on the statutory capital
and surplus of its insurance subsidiaries.

PREMIUMS
Premiums are recognized as revenues when due. Reserves are established for
the portion of premiums that will be earned in future periods and for
deferred profits on limited-payment policies that are being recognized in
income over the policy term.

OTHER REVENUES
Other revenues include management fees for variable annuity separate
accounts; surrender, mortality and administrative charges and fees earned
on investment, universal life and other insurance contracts; and revenues
of non-insurance subsidiaries.

CURRENT AND FUTURE INSURANCE BENEFITS
Current and future insurance benefits represent charges for mortality and
morbidity related to fixed annuities, universal life, term life and health
insurance benefits.

INTEREST CREDITED TO CONTRACTHOLDERS
Interest credited to contractholders represents amounts earned by universal
life, corporate owned life insurance, pension investment and certain
deferred annuity contracts in accordance with contract provisions.

FEDERAL INCOME TAXES
The provision for federal income taxes is comprised of two components,
current income taxes and deferred income taxes. Deferred federal income
taxes arise from changes during the year in cumulative temporary
differences between the tax basis and book basis of assets and liabilities.
A deferred federal income tax asset is recognized to the extent that future
realization of the tax benefit is more likely than not, with a valuation
allowance for the portion that is not likely to be recognized.

FUTURE APPLICATION OF ACCOUNTING STANDARDS

In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, "Accounting for
Derivative Instruments and Hedging Activities" (FAS 133). In June 1999, the
FASB issued Statement of Financial Standards No. 137 "Deferral of the
Effective Date of FASB Statement No. 133" (FAS 137) which allows entities
which have not adopted FAS 133 to defer its effective date to all fiscal
quarters of all fiscal years beginning after June 15, 2000. FAS 133
establishes accounting and reporting standards for derivative instruments,
including certain derivative instruments embedded in other contracts
(collectively referred to as derivatives), and for hedging activities. It
requires that an entity recognize all derivatives as either assets or
liabilities in the consolidated balance sheet and measure those instruments
at fair value. If certain conditions are met, a derivative may be
specifically designated as (a) a hedge of the exposure to changes in the
fair value of a recognized asset or liability or an unrecognized firm
commitment, (b) a hedge of the exposure to variable cash flows of a
recognized asset or liability or of a forecasted transaction, or (c) a
hedge of the foreign currency exposure of a net investment in a foreign

F-11
<PAGE> 208
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

operation, an unrecognized firm commitment, an available-for-sale security,
or a foreign-currency-denominated forecasted transaction. The accounting
for changes in the fair value of a derivative (that is, gains and losses)
depends on the intended use of the derivative and the resulting
designation. Upon initial application of FAS 133, hedging relationships
must be designated anew and documented pursuant to the provisions of this
statement. The Company adopted the deferral provisions of FAS 137,
effective January 1, 2000 and has not yet determined the impact that FAS
133 will have on its consolidated financial statements.

2. COMMERCIAL PAPER AND LINES OF CREDIT

TIC has issued commercial paper directly to investors in prior years. No
commercial paper was outstanding at December 31, 1999 or December 31, 1998.
TIC must maintain bank lines of credit at least equal to the amount of the
outstanding commercial paper. Citigroup and TIC have an agreement with a
syndicate of banks to provide $1.0 billion of revolving credit, to be
allocated to Citigroup or the Company. TIC's participation in this
agreement is limited to $250 million. The agreement consists of a five-year
revolving credit facility that expires in June 2001. At December 31, 1999
and 1998, no credit under this agreement was allocated to TIC. Under this
facility the Company is required to maintain certain minimum equity and
risk-based capital levels. At December 31, 1999, the Company was in
compliance with these provisions. If TIC had borrowings outstanding on this
facility, the interest rate would be based upon LIBOR plus a contractually
negotiated margin.

3. REINSURANCE

The Company participates in reinsurance in order to limit losses, minimize
exposure to large risks, provide additional capacity for future growth and
to effect business-sharing arrangements. Reinsurance is accomplished
through various plans of reinsurance, primarily yearly renewable term
coinsurance and modified coinsurance. The Company remains primarily liable
as the direct insurer on all risks reinsured.

Since 1997 universal life business was reinsured under an 80%/20% quota
share reinsurance program and term life business was reinsured under a
90%/10% quota share reinsurance program. Prior to 1997, the Company
reinsured all of its life business via first dollar quota share treaties on
an 80%/20% basis. Maximum retention of $1.5 million is generally reached on
policies in excess of $7.5 million. For other plans of insurance, it is the
policy of the Company to obtain reinsurance for amounts above certain
retention limits on individual life policies, which limits vary with age
and underwriting classification. Generally, the maximum retention on an
ordinary life risk is $1.5 million. Total inforce business ceded under
reinsurance contracts is $222.5 billion and $201.3 billion at December 31,
1999 and 1998.

The Company writes workers' compensation business through its Accident
Department. This business is ceded 100% to an affiliate, The Travelers
Indemnity Company.

F-12
<PAGE> 209
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

A summary of reinsurance financial data reflected within the consolidated
statements of income and balance sheets is presented below ($ in millions):

WRITTEN PREMIUMS 1999 1998 1997
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Direct $2,274 $2,310 $2,148
Assumed from:
Non-affiliated companies - - 1
Ceded to:
Affiliated companies (206) (242) (280)
Non-affiliated companies (322) (317) (273)
------------------------------------------------------------------------------------------------------
Total Net Written Premiums $1,746 $1,751 $1,596
======================================================================================================
</TABLE>

<TABLE>
<CAPTION>
EARNED PREMIUMS 1999 1998 1997
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Direct $2,248 $1,949 $2,170
Assumed from:
Non-affiliated companies - - 1
Ceded to:
Affiliated companies (193) (251) (321)
Non-affiliated companies (327) (308) (291)
------------------------------------------------------------------------------------------------------
Total Net Earned Premiums $1,728 $1,390 $1,559
======================================================================================================
</TABLE>

Reinsurance recoverables at December 31, 1999 and 1998 include amounts
recoverable on unpaid and paid losses and were as follows ($ in millions):

REINSURANCE RECOVERABLES 1999 1998
------------------------------------------------------------------------------------------------------

<S> <C> <C>
Life and Accident and Health Business:
Non-affiliated companies $1,221 $1,297
Property-Casualty Business:
Affiliated companies 2,013 2,090
------------------------------------------------------------------------------------------------------
Total Reinsurance Recoverables $3,234 $3,387
======================================================================================================
</TABLE>

Total reinsurance recoverables at December 31, 1999 and 1998 include $569
million and $640 million, respectively, from The Metropolitan Life
Insurance Company in connection with the sale of the Company's group life
insurance and related businesses in 1995.

F-13
<PAGE> 210
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

4. SHAREHOLDER'S EQUITY

Shareholder's Equity and Dividend Availability

The Company's statutory net income, which includes the statutory net income
of all insurance subsidiaries, was $890 million, $702 million and $754
million for the years ended December 31, 1999, 1998 and 1997, respectively.

The Company's statutory capital and surplus was $5.03 billion and $4.95
billion at December 31, 1999 and 1998, respectively.

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 $679 million is available in 2000 for dividend payments by the
Company without prior approval of the Connecticut Insurance Department. In
addition, under a revolving credit facility, the Company is required to
maintain certain minimum equity and risk-based capital levels. The Company
was in compliance with these covenants at December 31, 1999 and 1998. The
Company paid dividends of $550 million, $110 million and $500 million in
1999, 1998 and 1997, respectively.

F-14
<PAGE> 211
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

4. SHAREHOLDER'S EQUITY (continued)

Accumulated Other Changes in Equity from Non-Owner Sources, Net of Tax

Changes in each component of Accumulated Other Changes in Equity from Non-Owner
Sources were as follows:

<TABLE>
<CAPTION>
ACCUMULATED OTHER
NET UNREALIZED FOREIGN CHANGES IN EQUITY FROM
GAIN (LOSS) ON CURRENCY NON-OWNER SOURCES
INVESTMENT SECURITIES TRANSLATION
($ in millions) ADJUSTMENTS
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
BALANCE, JANUARY 1, 1997 $232 $(9) $223
Unrealized gain on investment securities,
net of tax of $239 442 - 442
Less: reclassification adjustment for gains
included in net income, net of tax of $70 129 - 129
Foreign currency translation adjustment,
net of tax of $0 - (1) (1)
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT PERIOD CHANGE 313 (1) 312
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1997 545 (10) 535
Unrealized gains on investment securities,
net of tax of $85 159 - 159
Less: reclassification adjustment for gains
included in net income, net of tax of $52 97 - 97
Foreign currency translation adjustment,
net of tax of $2 - 1 1
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT PERIOD CHANGE 62 1 63
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1998 607 (9) 598
Unrealized losses on investment securities,
net of tax of $497 (923) - (923)
Less: reclassification adjustment for gains
included in net income, net of tax of $40 73 - 73
- -------------------------------------------------------------------------------------------------------------------------------
CURRENT PERIOD CHANGE (996) - (996)
- -------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1999 $(389) $(9) $(398)
===============================================================================================================================
</TABLE>

F-15
<PAGE> 212
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

5. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

Derivative Financial Instruments

The Company uses derivative financial instruments, including financial
futures, interest rate swaps, currency swaps, options and forward contracts
as a means of hedging exposure to interest rate, equity price, and foreign
currency risk on anticipated transactions or existing assets and
liabilities. The Company, through a subsidiary that is a broker/dealer,
Tribeca Investments LLC (Tribeca) holds and issues derivative instruments
for trading purposes. All of these derivative financial instruments have
off-balance sheet risk. Financial instruments with off-balance sheet risk
involve, to varying degrees, elements of credit and market risk in excess
of the amount recognized in the balance sheet. The contract or notional
amounts of these instruments reflect the extent of involvement the Company
has in a particular class of financial instrument. However, the maximum
loss of cash flow associated with these instruments can be less than these
amounts. For interest rate swaps, currency swaps, options and forward
contracts, credit risk is limited to the amount that it would cost the
Company to replace the contracts. Financial futures contracts and purchased
listed option contracts have little credit risk since organized exchanges
are the counterparties. The Company as a writer of option contracts has no
credit risk since the counterparty has no performance obligation after it
has paid a cash premium.

The Company monitors creditworthiness of counterparties to these financial
instruments by using criteria of acceptable risk that are consistent with
on-balance sheet financial instruments. The controls include credit
approvals, limits and other monitoring procedures.

The Company uses exchange-traded financial futures contracts to manage its
exposure to changes in interest rates which arise from the sale of certain
insurance and investment products, or the need to reinvest proceeds from
the sale or maturity of investments. To hedge against adverse changes in
interest rates, the Company enters long or short positions in financial
futures contracts which offset asset price changes resulting from changes
in market interest rates until an investment is purchased or a product is
sold.

Margin payments are required to enter a futures contract and contract gains
or losses are settled daily in cash. The contract amount of futures
contracts represents the extent of the Company's involvement, but not
future cash requirements, as open positions are typically closed out prior
to the delivery date of the contract.

At December 31, 1999 and 1998, the Company held financial futures contracts
with notional amounts of $255 million and $459 million, respectively. These
financial futures had a deferred gain of $1.8 million and a deferred loss
of $.5 million in 1999, and a deferred gain of $3.3 million and a deferred
loss of $.1 million in 1998. Total gains of $6.9 million and $1.5 million
from financial futures were deferred at December 31, 1999 and 1998,
respectively, relating to anticipated investment purchases and investment
product sales, and are reported as other liabilities. At December 31, 1999
and 1998, the Company's futures contracts had no fair value because these
contracts were marked to market and settled in cash daily.

F-16

<PAGE> 213
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The Company enters into interest rate swaps in connection with other
financial instruments to provide greater risk diversification and better
match assets and liabilities. Under interest rate swaps, the Company agrees
with other parties to exchange, at specified intervals, the difference
between fixed-rate and floating-rate interest amounts calculated by
reference to an agreed notional principal amount. The Company also enters
into basis swaps in which both legs of the swap are floating with each
based on a different index. Generally, no cash is exchanged at the outset
of the contract and no principal payments are made by either party. A
single net payment is usually made by one counterparty at each due date.
Swap agreements are not exchange-traded so they are subject to the risk of
default by the counterparty.

At December 31, 1999 and 1998, the Company held interest rate swap
contracts with notional amounts of $1,498.2 million and $1,077.9 million,
respectively. The fair value of these financial instruments was $25.3
million (gain position) and $26.3 million (loss position) at December 31,
1999 and was $5.6 million (gain position) and $19.6 million (loss position)
at December 31, 1998. The fair values were determined using the discounted
cash flow method. At December 31, 1999, the Company held swap contracts
with affiliate counterparties with a notional amount of $207.5 million and
a fair value of $22.6 million (loss position).

The Company enters into currency swaps in connection with other financial
instruments to provide greater risk diversification and better match assets
purchased in U.S. Dollars with corresponding funding agreements issued in
foreign currencies. Under currency swaps, the Company agrees with other
parties to exchange, at specified intervals, foreign currency for U.S.
Dollars based upon interest amounts calculated by reference to an agreed
notional principal amount. Generally, there is an exchange of foreign
currency for U.S. Dollars at the outset of the contract based upon the
prevailing foreign exchange rate. Swap agreements are not exchange traded
so they are subject to the risk of default by the counterparty.

At December 31, 1999 and 1998, the Company held currency swap contracts
with notional amounts of $732.7 million and $10.0 million, respectively.
The fair value of these financial instruments was $59.2 million (loss
position) at December 31, 1999 and $.4 million (gain position) at December
31, 1998. The fair values were determined using the discounted cash flow
method.

The Company uses equity option contracts to manage its exposure to changes
in equity market prices that arise from the sale of certain insurance
products. To hedge against adverse changes in the equity market prices, the
Company enters long positions in equity option contracts with major
financial institutions. These contracts allow the Company, for a fee, the
right to receive a payment if the Standard and Poor's 500 Index falls below
agreed upon strike prices.

At December 31, 1999 and 1998, the Company held equity options with
notional amounts of $275.4 million and zero, respectively. The fair value
of these financial instruments was $32.6 million (gain position) at
December 31, 1999. The fair value of these contracts represent the
estimated replacement cost as quoted by independent third party brokers.

The off-balance sheet risks of interest rate options, equity swaps and
forward contracts were not significant at December 31, 1999 and 1998.

The off-balance sheet risk of derivative instruments held for trading
purposes was not significant at December 31, 1999 and 1998.

F-17
<PAGE> 214
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, the Company issues fixed and variable
rate loan commitments and has unfunded commitments to partnerships. The
off-balance sheet risk of these financial instruments was not significant
at December 31, 1999 and 1998. The Company had unfunded commitments to
partnerships with a value of $459.7 million at December 31, 1999.

Fair Value of Certain Financial Instruments

The Company uses various financial instruments in the normal course of its
business. Certain insurance contracts are excluded by Statement of
Financial Accounting Standards No. 107, "Disclosure about Fair Value of
Financial Instruments", and therefore are not included in the amounts
discussed.

At December 31, 1999 and 1998, investments in fixed maturities had a
carrying value and a fair value of $23.9 billion and $23.9 billion,
respectively. See Notes 1 and 12.

At December 31, 1999 mortgage loans had a carrying value of $2.3 billion
and a fair value of $2.3 billion and in 1998 had a carrying value of $2.6
billion and a fair value of $2.8 billion. In estimating fair value, the
Company used interest rates reflecting the current real estate financing
market.

Citigroup Preferred Stock included in other invested assets had a carrying
value and fair value of $987 million at December 31, 1999 and 1998.

At December 31, 1999, contractholder funds with defined maturities had a
carrying value of $5.0 billion and a fair value of $4.7 billion, compared
with a carrying value and a fair value of $3.3 billion at December 31,
1998. The fair value of these contracts is determined by discounting
expected cash flows at an interest rate commensurate with the Company's
credit risk and the expected timing of cash flows. Contractholder funds
without defined maturities had a carrying value of $10.1 billion and a fair
value of $9.9 billion at December 31, 1999, compared with a carrying value
of $10.4 billion and a fair value of $10.2 billion at December 31, 1998.
These contracts generally are valued at surrender value.

The carrying values of $228 million and $144 million of financial
instruments classified as other assets approximated their fair values at
December 31, 1999 and 1998, respectively. The carrying values of $1.2
billion and $2.3 billion of financial instruments classified as other
liabilities also approximated their fair values at December 31, 1999 and
1998, respectively. Fair value is determined using various methods,
including discounted cash flows, as appropriate for the various financial
instruments.

The assets of separate accounts providing a guaranteed return had a
carrying value and a fair value of $251 million at December 31, 1999,
compared with a carrying value and a fair value of $235 million at December
31, 1998. The liabilities of separate accounts providing a guaranteed
return had a carrying value and a fair value of $251 million at December
31, 1999, compared with a carrying value and a fair value of $209 million
and $206 million, respectively, at December 31, 1998.

The carrying values of cash, trading securities and trading securities sold
not yet purchased are carried at fair value. The carrying values of
short-term securities and investment income accrued approximated their fair
values.

The carrying value of policy loans, which have no defined maturities, is
considered to be fair value.

F-18
<PAGE> 215
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

6. COMMITMENTS AND CONTINGENCIES

Financial Instruments with Off-Balance Sheet Risk

See Note 5 for a discussion of financial instruments with off-balance sheet
risk.

Litigation

In March 1997, a purported class action entitled Patterman v. The
Travelers, Inc., et al. was commenced in the Superior Court of Richmond
County, Georgia, alleging, among other things, violations of the Georgia
RICO statute and other state laws by an affiliate of the Company, Primerica
Financial Services, Inc. and certain of its affiliates. Plaintiffs seek
unspecified compensatory and punitive damages and other relief. In October
1997, defendants answered the complaint, denied liability and asserted
numerous affirmative defenses. In February 1998, on defendants' motion, the
Superior Court of Richmond County transferred the lawsuit to the Superior
Court of Gwinnett County, Georgia. Plaintiffs appealed the transfer order,
and in December 1998 the Court of Appeals of the State of Georgia reversed
the lower court's decision. Defendants petitioned the Georgia Supreme Court
to hear an appeal from the decision of the Court of Appeals, and the
petition was granted in May 1998. In September 1999, oral argument on
defendants' petition was heard and, on February 28, 2000, the Georgia
Supreme Court affirmed the Georgia Court of Appeals and remanded the matter
to the Superior Court of Richmond County. In March 2000, defendants moved
the Georgia Supreme Court to reconsider its February 28, 2000 decision, and
that motion remains pending. Proceedings in the trial court have been
stayed pending appeal. Defendants intend to vigorously contest the
litigation.

The Company is also a defendant or co-defendant in various other litigation
matters in the normal course of business. Although there can be no
assurances, as of December 31, 1999, 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.

7. BENEFIT PLANS

Pension and Other Postretirement Benefits

The Company participates in a qualified, noncontributory defined benefit
pension plan sponsored by Citigroup. In addition, the Company provides
certain other postretirement benefits to retired employees through a plan
sponsored by TIGI. The Company's share of net expense for the qualified
pension and other postretirement benefit plans was not significant for
1999, 1998 and 1997. Through plans sponsored by TIGI, the Company also
provides defined contribution pension plans for certain agents. Company
contributions are primarily a function of production. The expense for these
plans was not significant in 1999, 1998 and 1997.

401(k) Savings Plan

Substantially all of the Company's employees are eligible to participate in
a 401(k) savings plan sponsored by Citigroup. Effective January 1, 1997,
the Company discontinued matching contributions for the majority of its
employees. The Company's expenses in connection with the 401(k) savings
plan were not significant in 1999, 1998 and 1997.

F-19
<PAGE> 216
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

8. RELATED PARTY TRANSACTIONS

The principal banking functions, including payment of salaries and
expenses, for certain subsidiaries and affiliates of TIGI are handled by
two companies. The Company handles banking functions for the life and
annuity operations of Travelers Life & Annuity and some of its
non-insurance affiliates. The Travelers Indemnity Company handles banking
functions for the property-casualty operations, including most of its
property-casualty insurance and non-insurance affiliates. Settlements
between companies are made at least monthly. The Company provides various
employee benefits coverages to employees of certain subsidiaries of TIGI.
The premiums for these coverages were charged in accordance with cost
allocation procedures based upon salaries or census. In addition,
investment advisory and management services, data processing services and
claims processing services are shared with affiliated companies. Charges
for these services are shared by the companies on cost allocation methods
based generally on estimated usage by department.

The Company maintains a short-term investment pool in which its insurance
affiliates participate. The position of each company participating in the
pool is calculated and adjusted daily. At December 31, 1999 and 1998, the
pool totaled approximately $2.6 billion and $2.3 billion, respectively. The
Company's share of the pool amounted to $1.0 billion and $793 million at
December 31, 1999 and 1998, respectively, and is included in short-term
securities in the consolidated balance sheet.

Included in short-term investments at December 31, 1998 was a 90-day
variable rate note receivable from Citigroup. The rate was based upon the
AA financial commercial paper rate plus 14 basis points. The rate at
December 31, 1998 was 5.47%. The balance, which was $500 million at
December 31, 1998, was paid in full on February 25, 1999. Interest accrued
at December 31, 1998 was $2.2 million. Interest earned was $3.9 million and
$9.4 million in 1999 and 1998, respectively.

The Company markets deferred annuity products and life and health insurance
through its affiliate, Salomon Smith Barney Financial Consultants (SSB).
Premiums and deposits related to these products were $1.4 billion, $1.3
billion, and $1.0 billion in 1999, 1998 and 1997, respectively.

At December 31, 1999 and 1998 the Company had outstanding loaned securities
to SSB for $123.0 million and $39.7 million, respectively.

Included in other invested assets is a $987 million investment in Citigroup
preferred stock at December 31, 1999 and 1998, carried at cost.

The Company sells structured settlement annuities to the insurance
subsidiaries of Travelers Property Casualty Corp. (TAP) in connection with
the settlement of certain policyholder obligations. Such premiums and
deposits were $156 million, $104 million, and $88 million for 1999, 1998
and 1997, respectively. Reserves and contractholder funds related to these
annuities amounted to $798 million and $787 million in 1999 and 1998,
respectively.

In the ordinary course of business, the Company purchases and sells
securities through affiliated broker-dealers. These transactions are
conducted on an arm's length basis.

F-20
<PAGE> 217
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Primerica Life has entered into a General Agency Agreement with Primerica
Financial Services, Inc. (Primerica), that provides that Primerica will be
Primerica Life's general agent for marketing all insurance of Primerica
Life. In consideration of such services, Primerica Life agreed to pay
Primerica marketing fees of no less than $10 million based upon U.S. gross
direct premiums received by Primerica Life. In each of 1999 and 1998 the
fees paid by Primerica Life were $12.5 million.

In 1998 Primerica became a distributor of products for Travelers Life &
Annuity. Primerica sold $903 million and $256 million of deferred annuities
in 1999 and 1998, respectively.

The Company participates in a stock option plan sponsored by Citigroup that
provides for the granting of stock options in Citigroup common stock to
officers and key employees. To further encourage employee stock ownership,
during 1997 Citigroup introduced the WealthBuilder stock option program.
Under this program, all employees meeting certain requirements have been
granted Citigroup stock options.

The Company applies Accounting Principles Board Opinion No. 25 (APB 25) and
related interpretations in accounting for stock options. Since stock
options under the Citigroup plans are issued at fair market value on the
date of award, no compensation cost has been recognized for these awards.
FAS 123 provides an alternative to APB 25 whereby fair values may be
ascribed to options using a valuation model and amortized to compensation
cost over the vesting period of the options.

Had the Company applied FAS 123 in accounting for Citigroup stock options,
net income would have been the pro forma amounts indicated below:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions)
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net income, as reported $1,047 $902 $839
FAS 123 pro forma adjustments, after tax (16) (13) (9)
------------------------------------------------------------------------------------------------------
Net income, pro forma $1,031 $889 $830
------------------------------------------------------------------------------------------------------
</TABLE>

F-21
<PAGE> 218
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

9. LEASES

Most leasing functions for TIGI and its subsidiaries are administered by
TAP. Rent expense related to all leases is shared by the companies on a
cost allocation method based generally on estimated usage by department.
Net rent expense was $30 million, $24 million, and $15 million in 1999,
1998 and 1997, respectively.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------
YEAR ENDING DECEMBER 31, MINIMUM OPERATING RENTAL
($ in millions) PAYMENTS
--------------------------------------------------------------------------
<S> <C>
2000 $38
2001 42
2002 41
2003 41
2004 41
Thereafter 273
--------------------------------------------------------------------------
Total Rental Payments $476
=========================================================================
</TABLE>

Future sublease rental income of approximately $79 million will partially
offset these commitments. Also, the Company will be reimbursed for 50% of
the rental expense for a particular lease totaling $195 million, by an
affiliate. Minimum future capital lease payments are not significant.

The Company is reimbursed for use of furniture and equipment through cost
sharing agreements by its affiliates.

F-22
<PAGE> 219
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
10. FEDERAL INCOME TAXES

EFFECTIVE TAX RATE

<TABLE>
<CAPTION>
($ in millions)
--------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Income Before Federal Income Taxes $1,592 $1,383 $1,283
Statutory Tax Rate 35% 35% 35%
--------------------------------------------------------------------------------------------------------
Expected Federal Income Taxes 557 484 449
Tax Effect of:
Non-taxable investment income (19) (5) (4)
Other, net 7 2 (1)
--------------------------------------------------------------------------------------------------------
Federal Income Taxes $ 545 $ 481 $ 444
========================================================================================================
Effective Tax Rate 34% 35% 35%
--------------------------------------------------------------------------------------------------------
</TABLE>

COMPOSITION OF FEDERAL INCOME TAXES
<TABLE>
<CAPTION>
Current:
<S> <C> <C> <C>
United States $377 $418 $410
Foreign 32 24 24
--------------------------------------------------------------------------------------------------------
Total 409 442 434
--------------------------------------------------------------------------------------------------------
Deferred:
United States 143 40 10
Foreign (7) (1) --
--------------------------------------------------------------------------------------------------------
Total 136 39 10
--------------------------------------------------------------------------------------------------------
Federal Income Taxes $545 $481 $444
========================================================================================================
</TABLE>

Additional tax benefits attributable to employee stock plans allocated
directly to shareholder's equity were $17 million for each of the years
ended December 31, 1999, 1998 and 1997.

F-23
<PAGE> 220
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The net deferred tax liabilities at December 31, 1999 and 1998 were
comprised of the tax effects of temporary differences related to the
following assets and liabilities:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
($ in millions) 1999 1998
---- ----
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Deferred Tax Assets:
Benefit, reinsurance and other reserves $ 645 $ 616
Operating lease reserves 70 76
Investments, net 11 --
Other employee benefits 106 103
Other 142 135
-----------------------------------------------------------------------------------------------------------------
Total 974 930
-----------------------------------------------------------------------------------------------------------------

Deferred Tax Liabilities:
Deferred acquisition costs and value of insurance in force (773) (673)
Investments, net -- (489)
Other (124) (90)
-----------------------------------------------------------------------------------------------------------------
Total (897) (1,252)
-----------------------------------------------------------------------------------------------------------------
Net Deferred Tax (Liability) Asset Before Valuation Allowance 77 (322)
Valuation Allowance for Deferred Tax Assets (100) (100)
-----------------------------------------------------------------------------------------------------------------
Net Deferred Tax Liability After Valuation Allowance $ (23) $ (422)
-----------------------------------------------------------------------------------------------------------------
</TABLE>

The Company and its life insurance subsidiaries file a consolidated federal
income tax return. Federal income taxes are allocated to each member of the
consolidated group on a separate return basis adjusted for credits and
other amounts required by the consolidation process. Any resulting
liability will be paid currently to the Company. Any credits for losses
will be paid by the Company to the extent that such credits are for tax
benefits that have been utilized in the consolidated federal income tax
return.

The $100 million valuation allowance is sufficient to cover any capital
losses on investments that may exceed the capital gains able to be
generated in the life insurance group's consolidated federal income tax
return based upon management's best estimate of the character of the
reversing temporary differences. Reversal of the valuation allowance is
contingent upon the recognition of future capital gains or a change in
circumstances that causes the recognition of the benefits to become more
likely than not. There was no change in the valuation allowance during
1999. The initial recognition of any benefit produced by the reversal of
the valuation allowance will be recognized by reducing goodwill.

At December 31, 1999, the Company had no ordinary or capital loss
carryforwards.

F-24
<PAGE> 221
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The policyholders surplus account, which arose under prior tax law, is
generally that portion of the gain from operations that has not been
subjected to tax, plus certain deductions. The balance of this account is
approximately $932 million. Income taxes are not provided for on this
amount because under current U.S. tax rules such taxes will become payable
only to the extent such amounts are distributed as a dividend or exceed
limits prescribed by federal law. Distributions are not contemplated from
this account. At current rates the maximum amount of such tax would be
approximately $326 million.

11. NET INVESTMENT INCOME

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions) ---- ---- ----
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
GROSS INVESTMENT INCOME
Fixed maturities $1,806 $1,598 $1,460
Mortgage loans 235 295 291
Joint ventures and partnerships 141 74 55
Trading 141 43 57
Other, including policy loans 287 240 263
------------------------------------------------------------------------------------------------------
2,610 2,250 2,126
------------------------------------------------------------------------------------------------------
Investment expenses 104 65 89
------------------------------------------------------------------------------------------------------
Net investment income $2,506 $2,185 $2,037
------------------------------------------------------------------------------------------------------
</TABLE>

12. INVESTMENTS AND INVESTMENT GAINS (LOSSES)

Realized investment gains (losses) for the periods were as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions) ---- ---- ----
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REALIZED INVESTMENT GAINS
Fixed maturities $(23) $111 $ 71
Equity securities 7 6 (9)
Mortgage loans 29 21 59
Real estate held for sale 108 16 67
Other (8) (5) 11
------------------------------------------------------------------------------------------------------
Total Realized Investment Gains $113 $149 $199
------------------------------------------------------------------------------------------------------
</TABLE>

F-25
<PAGE> 222
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Changes in net unrealized investment gains (losses) that are reported as
accumulated other changes in equity from non-owner sources or unrealized
gains on Citigroup stock in shareholder's equity were as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions) ---- ---- ----
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
UNREALIZED INVESTMENT GAINS (LOSSES)
Fixed maturities $(1,554) $ 91 $ 446
Equity securities 49 13 25
Other (30) (169) 520
-------------------------------------------------------------------------------------------------------------
Total Unrealized Investment Gains (Losses) (1,535) (65) 991
-------------------------------------------------------------------------------------------------------------

Related taxes (539) (20) 350
-------------------------------------------------------------------------------------------------------------
Change in unrealized investment gains (losses) (996) (45) 641
Transferred to paid in capital, net of tax -- (585) --
Balance beginning of year 598 1,228 587
-------------------------------------------------------------------------------------------------------------
Balance End of Year $ (398) $ 598 $1,228
-------------------------------------------------------------------------------------------------------------
</TABLE>

Included in Other in 1998 is the unrealized loss on Citigroup common stock
of $167 million prior to the conversion to preferred stock. Also included
in Other were unrealized gains of $506 million, which were reported in
1997, related to appreciation of Citigroup common stock.

F-26
<PAGE> 223
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Fixed Maturities

The amortized cost and fair value of investments in fixed maturities were
as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
GROSS GROSS
DECEMBER 31, 1999 AMORTIZED UNREALIZED UNREALIZED FAIR
($ in millions) COST GAINS LOSSES VALUE
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE:
Mortgage-backed securities - CMOs and
pass-through securities $ 5,081 $ 22 $ 224 $ 4,879
U.S. Treasury securities and obligations of
U.S. Government and government agencies and
authorities 1,032 14 53 993
Obligations of states, municipalities and
political subdivisions 214 -- 31 183
Debt securities issued by foreign governments 811 35 10 836
All other corporate bonds 13,938 69 384 13,623
Other debt securities 3,319 30 99 3,250
Redeemable preferred stock 105 4 7 102
-------------------------------------------------------------------------------------------------------------------
Total Available For Sale $24,500 $ 174 $ 808 $23,866
-------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
GROSS GROSS
DECEMBER 31, 1998 AMORTIZED UNREALIZED UNREALIZED FAIR
($ in millions) COST GAINS LOSSES VALUE
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE:
Mortgage-backed securities - CMOs and
pass-through securities $ 4,717 $ 147 $ 11 $ 4,853
U.S. Treasury securities and obligations of
U.S. Government and government agencies and
authorities 1,563 186 3 1,746
Obligations of states, municipalities and
political subdivisions 239 18 -- 257
Debt securities issued by foreign governments 634 41 3 672
All other corporate bonds 13,025 532 57 13,500
Other debt securities 2,709 106 38 2,777
Redeemable preferred stock 86 3 1 88
------------------------------------------------------------------------------------------------------------------
Total Available For Sale $22,973 $ 1,033 $ 113 $23,893
------------------------------------------------------------------------------------------------------------------
</TABLE>

F-27
<PAGE> 224
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Proceeds from sales of fixed maturities classified as available for sale
were $12.6 billion, $13.4 billion and $7.6 billion in 1999, 1998 and 1997,
respectively. Gross gains of $200 million, $314 million and $170 million
and gross losses of $223 million, $203 million and $99 million in 1999,
1998 and 1997, respectively, were realized on those sales.

Fair values of investments in fixed maturities are based on quoted market
prices or dealer quotes or, if these are not available, discounted expected
cash flows using market rates commensurate with the credit quality and
maturity of the investment. The fair value of investments for which a
quoted market price or dealer quote are not available amounted to $4.8
billion and $4.8 billion at December 31, 1999 and 1998, respectively.

The amortized cost and fair value of fixed maturities at December 31, 1999,
by contractual maturity, are shown below. Actual maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
AMORTIZED
($ in millions) COST FAIR VALUE
--------------------------------------------------------------------------------------
<S> <C> <C>
MATURITY:
Due in one year or less $1,624 $1,622
Due after 1 year through 5 years 6,633 6,599
Due after 5 years through 10 years 5,257 5,132
Due after 10 years 5,905 5,634
--------------------------------------------------------------------------------------
19,419 18,987
--------------------------------------------------------------------------------------
Mortgage-backed securities 5,081 4,879
--------------------------------------------------------------------------------------
Total Maturity $24,500 $23,866
--------------------------------------------------------------------------------------
</TABLE>

The Company makes investments in collateralized mortgage obligations
(CMOs). CMOs typically have high credit quality, offer good liquidity, and
provide a significant advantage in yield and total return compared to U.S.
Treasury securities. The Company's investment strategy is to purchase CMO
tranches which are protected against prepayment risk, including planned
amortization class (PAC) tranches. Prepayment protected tranches are
preferred because they provide stable cash flows in a variety of interest
rate scenarios. The Company does invest in other types of CMO tranches if a
careful assessment indicates a favorable risk/return tradeoff. The Company
does not purchase residual interests in CMOs.

At December 31, 1999 and 1998, the Company held CMOs classified as
available for sale with a fair value of $3.8 billion and $3.4 billion,
respectively. Approximately 52% and 54%, respectively, of the Company's CMO
holdings are fully collateralized by GNMA, FNMA or FHLMC securities at
December 31, 1999 and 1998. In addition, the Company held $1.1 billion and
$1.4 billion of GNMA, FNMA or FHLMC mortgage-backed pass-through securities
at December 31, 1999 and 1998, respectively. Virtually all of these
securities are rated AAA.

F-28
<PAGE> 225
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Equity Securities

The cost and fair values of investments in equity securities were as
follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
GROSS GROSS
EQUITY SECURITIES: UNREALIZED UNREALIZED FAIR
($ in millions) COST GAINS LOSSES VALUE
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
DECEMBER 31, 1999
Common stocks $195 $123 $ 4 $314
Non-redeemable preferred stocks 496 15 41 470
-------------------------------------------------------------------------------------------------------------------
Total Equity Securities $691 $138 $45 $784
-------------------------------------------------------------------------------------------------------------------

DECEMBER 31, 1998
Common stocks $129 $44 $ 3 $170
Non-redeemable preferred stocks 345 10 7 348
-------------------------------------------------------------------------------------------------------------------
Total Equity Securities $474 $54 $10 $518
-------------------------------------------------------------------------------------------------------------------
</TABLE>

Proceeds from sales of equity securities were $100 million, $212 million
and $341 million in 1999, 1998 and 1997, respectively. Gross gains of $15
million, $30 million and $53 million and gross losses of $8 million, $24
million and $62 million in 1999, 1998 and 1997, respectively, were realized
on those sales.

Mortgage Loans and Real Estate Held For Sale

At December 31, 1999 and 1998, the Company's mortgage loan and real estate
held for sale portfolios consisted of the following:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------
($ in millions) 1999 1998
--------------------------------------------------------------------------------------------------
<S> <C> <C>
Current Mortgage Loans $2,228 $2,370
Underperforming Mortgage Loans 57 236
--------------------------------------------------------------------------------------------------
Total Mortgage Loans 2,285 2,606
--------------------------------------------------------------------------------------------------

Real Estate Held For Sale - Foreclosed 223 112
Real Estate Held For Sale - Investment 13 31
--------------------------------------------------------------------------------------------------
Total Real Estate 236 143
--------------------------------------------------------------------------------------------------
Total Mortgage Loans and Real Estate Held for Sale $2,521 $2,749
==================================================================================================
</TABLE>

Underperforming mortgage loans include delinquent mortgage loans, loans in
the process of foreclosure, foreclosed loans and loans modified at interest
rates below market.

F-29
<PAGE> 226
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Aggregate annual maturities on mortgage loans at December 31, 1999 are as
follows:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------
YEAR ENDING DECEMBER 31,
($ in millions)
-----------------------------------------------------------------------
<S> <C>
Past Maturity $ 39
2000 162
2001 172
2002 137
2003 131
2004 140
Thereafter 1,504
-----------------------------------------------------------------------
Total $2,285
=======================================================================
</TABLE>

Trading Securities

Trading securities of the Company are held in Tribeca.

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------
($ in millions) 1999 1998
-------------------------------------------------------------------------------------------
TRADING SECURITIES OWNED
<S> <C> <C>
Convertible bond arbitrage $1,045 $754
Merger arbitrage 421 427
Other 212 5
-------------------------------------------------------------------------------------------
Total $1,678 $1,186
-------------------------------------------------------------------------------------------
TRADING SECURITIES SOLD NOT YET PURCHASED
Convertible bond arbitrage $799 $521
Merger arbitrage 299 352
-------------------------------------------------------------------------------------------
Total $1,098 $873
-------------------------------------------------------------------------------------------
</TABLE>

The Company's trading portfolio investments and related liabilities are
normally held for periods less than six months. Therefore, expected future
cash flows for these assets and liabilities are expected to be realized in
less than one year.

F-30

<PAGE> 227
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Concentrations

At December 31, 1999 and 1998, the Company had an investment in Citigroup
Preferred Stock of $987 million. See Note 8.

The Company maintains a short-term investment pool for its insurance
affiliates in which the Company also participates. See Note 8.

The Company had concentrations of investments, primarily fixed maturities,
in the following industries:

<TABLE>
<CAPTION>
--------------------------------------------------------------------------
($ in millions) 1999 1998
--------------------------------------------------------------------------
<S> <C> <C>
Banking $1,906 $2,131
Electric Utilities 1,653 1,513
Finance 1,571 1,346
--------------------------------------------------------------------------
</TABLE>

The Company held investments in Foreign Banks in the amount of $1,012
million and $997 million at December 31, 1999 and 1998, respectively, which
are included in the table above. Also, below investment grade assets
included in the preceding table were not significant.

Included in fixed maturities are below investment grade assets totaling
$2.2 billion and $2.1 billion at December 31, 1999 and 1998, respectively.
The Company defines its below investment grade assets as those securities
rated "Ba1" or below by external rating agencies, or the equivalent by
internal analysts when a public rating does not exist. Such assets include
publicly traded below investment grade bonds and certain other privately
issued bonds and notes that are classified as below investment grade.

Mortgage loan investments are relatively evenly dispersed throughout the
United States, with no significant holdings in any one state. Also, there
is no significant mortgage loan investment in a particular property type.

F-31
<PAGE> 228
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The Company monitors creditworthiness of counterparties to all financial
instruments by using controls that include credit approvals, limits and
other monitoring procedures. Collateral for fixed maturities often includes
pledges of assets, including stock and other assets, guarantees and letters
of credit. The Company's underwriting standards with respect to new
mortgage loans generally require loan to value ratios of 75% or less at the
time of mortgage origination.

Non-Income Producing Investments

Investments included in the consolidated balance sheets that were
non-income producing for the preceding 12 months were insignificant.

Restructured Investments

The Company had mortgage loans and debt securities that were restructured
at below market terms at December 31, 1999 and 1998. The balances of the
restructured investments were insignificant. The new terms typically defer
a portion of contract interest payments to varying future periods. The
accrual of interest is suspended on all restructured assets, and interest
income is reported only as payment is received. Gross interest income on
restructured assets that would have been recorded in accordance with the
original terms of such loans was insignificant in 1999 and in 1998.
Interest on these assets, included in net investment income was
insignificant in 1999 and 1998.

13. DEPOSIT FUNDS AND RESERVES

At December 31, 1999, the Company had $27.0 billion of life and annuity
deposit funds and reserves. Of that total, $13.8 billion is not subject to
discretionary withdrawal based on contract terms. The remaining $13.2
billion is for life and annuity products that are subject to discretionary
withdrawal by the contractholder. Included in the amount that is subject to
discretionary withdrawal is $2.1 billion of liabilities that are
surrenderable with market value adjustments. Also included are an
additional $4.9 billion of life insurance and individual annuity
liabilities which are subject to discretionary withdrawals, and have an
average surrender charge of 4.6%. In the payout phase, these funds are
credited at significantly reduced interest rates. The remaining $6.2
billion of liabilities are surrenderable without charge. More than 12.7% of
these relate to individual life products. These risks would have to be
underwritten again if transferred to another carrier, which is considered a
significant deterrent against withdrawal by long-term policyholders.
Insurance liabilities that are surrendered or withdrawn are reduced by
outstanding policy loans and related accrued interest prior to payout.

F-32
<PAGE> 229
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

14. RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES

The following table reconciles net income to net cash provided by operating
activities:

<TABLE>
<CAPTION>
---------------------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions) ---- ---- ----
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Income From Continuing Operations $ 1,047 $ 902 $ 839
Adjustments to reconcile net income to net cash provided by
operating activities:
Realized gains (113) (149) (199)
Deferred federal income taxes 136 39 10
Amortization of deferred policy acquisition costs 315 275 252
Additions to deferred policy acquisition costs (686) (566) (471)
Investment income (221) (202) (32)
Premium balances (23) 23 (64)
Insurance reserves and accrued expenses 421 348 111
Other 99 205 380
---------------------------------------------------------------------------------------------------------------------
Net cash provided by operations $ 975 $ 875 $ 826
---------------------------------------------------------------------------------------------------------------------

---------------------------------------------------------------------------------------------------------------------
</TABLE>

15. NON-CASH INVESTING AND FINANCING ACTIVITIES

Significant non-cash investing and financing activities include the
acquisition of real estate through foreclosures of mortgage loans amounting
to $205 million in 1999, the transfer of Citigroup common stock to
Citigroup preferred stock valued at $987 million in 1998 and the conversion
of $119 million of real estate held for sale to other invested assets as a
joint venture in 1997.

F-33
<PAGE> 230
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

16. OPERATING SEGMENTS

The Company has two reportable business segments that are separately
managed due to differences in products, services, marketing strategy and
resource management. The business of each segment is maintained and
reported through separate legal entities within the Company. The management
groups of each segment report separately to the common ultimate parent,
Citigroup Inc.

The TRAVELERS LIFE & ANNUITY business segment consolidates primarily the
business of The Travelers Insurance Company and The Travelers Life and
Annuity Company. Travelers Life & Annuity offers individual annuity, group
annuity, individual life and long-term care products distributed by the
Company and TLAC under the Travelers name. Among the range of individual
products offered are fixed and variable deferred annuities, payout
annuities and term, universal and variable life and long-term care
insurance. The group products include institutional pensions, including
guaranteed investment contracts, payout annuities, group annuities to
employer-sponsored retirement and savings plans and structured finance
transactions.

The PRIMERICA LIFE business segment consolidates primarily the business of
Primerica Life Insurance Company, Primerica Life Insurance Company of
Canada and National Benefit Life Insurance Company. The Primerica Life
business segment offers individual life products, primarily term insurance,
to customers through a nationwide sales force of approximately 80,000 full
and part-time licensed Personal Financial Analysts.

The accounting policies of the segments are the same as those described in
the summary of significant accounting policies (see Note 1), except that
management also includes receipts on long-duration contracts (universal
life-type and investment contracts) as deposits along with premiums in
measuring business volume.

BUSINESS SEGMENT INFORMATION:

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
TRAVELERS LIFE & PRIMERICA LIFE
1999 ($ in millions) ANNUITY INSURANCE TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Business Volume:
Premiums $ 666 $ 1,072 $ 1,738
Deposits 11,220 -- 11,220
------- ------- -------
Total business volume $11,886 $ 1,072 $12,958
Net investment income 2,249 257 2,506
Interest credited to contractholders 937 -- 937
Amortization of deferred acquisition costs 127 188 315
Federal income taxes on Operating Income 319 186 505
Operating Income (excludes realized gains or
losses and the related FIT) $ 619 $ 355 $ 974
Segment Assets $56,615 $ 6,916 $63,531
-----------------------------------------------------------------------------------------------------------------
</TABLE>

F-34
<PAGE> 231
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
TRAVELERS LIFE & PRIMERICA LIFE
1998 ($ in millions) ANNUITY INSURANCE TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Business Volume:
Premiums $ 683 $1,057 $ 1,740
Deposits 7,693 -- 7,693
------- ------ -------
Total business volume $ 8,376 $1,057 $ 9,433
Net investment income 1,965 220 2,185
Interest credited to contractholders 876 -- 876
Amortization of deferred acquisition costs 88 187 275
Federal income taxes on Operating Income 260 170 430
Operating Income (excludes realized gains or
losses and the related FIT) $ 493 $ 312 $ 805
Segment Assets $49,646 $6,902 $56,548
-----------------------------------------------------------------------------------------------------------------
</TABLE>

-----------------------------------------------------------------------------------------------------------------
TRAVELERS LIFE PRIMERICA LIFE
1997 ($ in millions) & ANNUITY INSURANCE TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Business Volume:
Premiums $ 548 $1,035 $ 1,583
Deposits 5,276 -- 5,276
------- ------ -------
Total business volume $ 5,824 $1,035 $ 6,859
Net investment income 1,836 201 2,037
Interest credited to contractholders 829 -- 829
Amortization of deferred acquisition costs 68 184 252
Federal income taxes on Operating Income 221 153 374
Operating Income (excludes realized gains or
losses and the related FIT) $ 427 $ 283 $ 710
Segment Assets $42,330 $7,110 $49,440
-----------------------------------------------------------------------------------------------------------------
</TABLE>

The amount of investments in equity method investees and total expenditures
for additions to long-lived assets other than financial instruments,
long-term customer relationships of a financial institution, mortgage and
other servicing rights, deferred policy acquisition costs, and deferred tax
assets, were not material.

F-35
<PAGE> 232
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------
BUSINESS SEGMENT RECONCILIATION:
($ in millions)
----------------------------------------------------------------------------------------------------------

REVENUES 1999 1998 1997
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total business volume $12,958 $9,433 $6,859
Net investment income 2,506 2,185 2,037
Realized investment gains 113 149 199
Other revenues 521 440 354
Elimination of deposits (11,220) (7,693) (5,276)
----------------------------------------------------------------------------------------------------------
Total revenues $4,878 $4,514 $4,173
==========================================================================================================

OPERATING INCOME 1999 1998 1997
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total operating income of business segments $ 974 $805 $710
Realized investment gains net of tax 73 97 129
----------------------------------------------------------------------------------------------------------
Income from continuing operations $1,047 $902 $839
==========================================================================================================
</TABLE>

<TABLE>
<CAPTION>
ASSETS 1999 1998 1997
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Total assets of business segments $63,531 $56,548 $49,440
==========================================================================================================
</TABLE>

REVENUE BY PRODUCTS 1999 1998 1997
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Deferred Annuities $5,694 $4,198 $3,303
Group and Payout Annuities 7,275 5,326 3,737
Individual Life and Health Insurance 2,434 2,270 2,102
Other (a) 695 413 307
Elimination of deposits (11,220) (7,693) (5,276)
----------------------------------------------------------------------------------------------------------
Total Revenue $4,878 $4,514 $4,173
==========================================================================================================
</TABLE>

(a) Other represents revenue attributable to unallocated capital and run-off
businesses.

The Company's revenue was derived almost entirely from U.S. domestic
business. Revenue attributable to foreign countries was insignificant.

The Company had no transactions with a single customer representing 10% or
more of its revenue.

F-36
<PAGE> 233

THE TRAVELERS

THE TRAVELERS VARIABLE ANNUITIES

INDIVIDUAL AND GROUP VARIABLE ANNUITY CONTRACTS

Issued By

THE TRAVELERS INSURANCE COMPANY

PENSION AND PROFIT-SHARING,

SECTION 403(b) AND SECTION 408, AND

DEFERRED COMPENSATION PROGRAMS

L-11165S TIC Ed. 5-2000
Printed in U.S.A.
<PAGE> 234

STATEMENT OF ADDITIONAL INFORMATION

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

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

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

GROUP VARIABLE ANNUITY CONTRACTS
ISSUED BY THE TRAVELERS INSURANCE COMPANY
FOR FUNDING QUALIFIED RETIREMENT PLANS
UNDER PENSION AND PROFIT-SHARING PROGRAMS

May 1, 2000

This Statement of Additional Information ("SAI") is not a prospectus but relates
to, and should be read in conjunction with, the Prospectus dated May 1, 2000. A
copy of the Prospectus may be obtained by writing to The Travelers Insurance
Company (the "Company"), Annuity Services, One Tower Square, Hartford,
Connecticut 06183-5030, or by calling 800-842-9368 or by accessing the
Securities and Exchange Commission's website at hhtp://www.sec.gov.

TABLE OF CONTENTS
<TABLE>
<CAPTION>

PAGE
<S> <C>
Description Of The Travelers And The Separate Accounts.............................................................. 2
The Insurance Company....................................................................................... 2
The Separate Accounts....................................................................................... 2

Investment Objectives And Policies.................................................................................. 2
The Travelers Growth And Income Stock Account For Variable Annuities........................................ 3
The Travelers Quality Bond Account For Variable Annuities................................................... 4

Description Of Certain Types Of Investments And Investment
Techniques Available To The Separate Accounts............................................................... 6
Writing Covered Call Options................................................................................ 6
Buying Put And Call Options................................................................................. 7
Futures Contracts........................................................................................... 7
Money Market Instruments.................................................................................... 10

Investment Management And Advisory Services......................................................................... 12
Advisory and Subadvisory Fees............................................................................... 13
TAMIC............................................................................................................... 13
TIMCO............................................................................................................... 14

Valuation Of Assets................................................................................................. 15

The Board Of Managers............................................................................................... 16

Administrative Services............................................................................................. 18

Securities Custodian................................................................................................ 18

Independent Accountants............................................................................................. 19

Financial Statements................................................................................................ F-1
</TABLE>

<PAGE> 235

DESCRIPTION OF THE TRAVELERS AND THE SEPARATE ACCOUNTS

THE INSURANCE COMPANY

The Travelers Insurance Company (the "Company") is a stock insurance company
chartered in 1864 in Connecticut and continuously engaged in the insurance
business since that time. It is licensed to conduct life insurance business in
all states of the United States, the District of Columbia, Puerto Rico, Guam,
the U.S. and British Virgin Islands and the Bahamas. The Company is an indirect
wholly owned subsidiary of Citigroup Inc., a financial services holding company.
The Company's Home Office is located at One Tower Square, Hartford, Connecticut
06183.

THE SEPARATE ACCOUNTS

Each of the Separate Accounts which serve as the funding vehicles for the
Variable Annuity contracts described in this Statement of Additional Information
meets the definition of a separate account under the federal securities laws,
and will comply with the provisions of the Investment Company Act of 1940, as
amended (the "1940 Act"). Additionally, the operations of each of the Separate
Accounts are subject to the provisions of Section 38a-433 of the Connecticut
General Statutes which authorizes the Connecticut Insurance Commissioner to
adopt regulations under it. The Section contains no restrictions on investments
of the Separate Accounts, and the Commissioner has adopted no regulations under
the Section that affect the Separate Accounts.

The Travelers Growth and Income Stock Account for Variable Annuities (Account
GIS) was established on September 22, 1967, and The Travelers Quality Bond
Account for Variable Annuities (Account QB) was established on July 29, 1974.
Each of the Separate Accounts, although an integral part of the Company, is
registered with the Securities and Exchange Commission ("SEC") as a diversified,
open-end management investment Company under the 1940 Act. The assets of
Accounts GIS and QB are invested directly in securities (such as stocks, bonds
or money market instruments) which are compatible with the stated investment
policies of each account.

Purchase Payments may be allocated to either of the Separate Accounts. The
Company may make additions to or deletions from the investment alternatives
available under the Contract, as permitted by law. The investment objectives of
each of the Separate Accounts are as follows:

ACCOUNT GIS: The primary objective of Account GIS is long-term
accumulation of principal through capital appreciation and
retention of net investment income. The assets of Account GIS
will normally be invested in a portfolio of common stocks spread
over industries and companies.

ACCOUNT QB: The primary objective of Account QB is current
income, moderate capital volatility and total return. Assets of
Account QB will be invested in short-term to intermediate-term
bonds or other debt securities with a market value-weighted
average maturity of five years or less.

INVESTMENT OBJECTIVES AND POLICIES

Each Separate Account has a different investment objective and different
investment policies, and each Separate Account has certain fundamental
investment restrictions, all of which are set forth below. Neither the
investment objective nor the fundamental investment restrictions can be changed
without a vote of a majority of the outstanding voting securities of the
Accounts, as defined in the 1940 Act. Additionally, in accomplishing their
respective investment objectives, each Account uses certain types of investments
and investment techniques which are discussed under "Investments and Investment
Techniques."

The percentage restrictions (for either fundamental investment policies or
investment restrictions) are interpreted such that if they are adhered to at the
time of investment, a later increase in a percentage beyond the specified limit
resulting from a change in the values of portfolio securities or in the amount
of net assets shall not be considered a violation. It must be recognized that
there are risks inherent in the ownership of any investment and that there can
be no assurance that the investment objectives of the Separate Accounts will be
achieved.

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THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES

INVESTMENT OBJECTIVE

The basic investment objective of Account GIS is the selection of investments
from the point of view of an investor concerned primarily with long-term
accumulation of principal through capital appreciation and retention of net
investment income. This principal objective does not preclude the realization of
short-term gains when conditions would suggest the long-term goal is
accomplished by such short-term transactions. The assets of Account GIS will
primarily be invested in a portfolio of equity securities, mainly common stocks,
spread over industries and companies. However, when it is determined that
investments of other types may be advantageous on the basis of combined
considerations of risk, income and appreciation, investments may also be made in
bonds, notes or other evidence of indebtedness, issued publicly or placed
privately, of a type customarily purchased for investment by institutional
investors, including United States Government securities. These investments
generally would not have a prospect of long-term appreciation. Investments in
other than equity securities are temporary for defensive purposes. Such
investments may or may not be convertible into stock or be accompanied by stock
purchase options or warrants for the purchase of stock.

Account GIS may use exchange-traded financial futures contracts as a hedge to
protect against changes in stock prices. The use of stock index futures by
Account GIS is intended primarily to limit transaction and borrowing costs.
Account GIS expects that risk management transactions involving futures
contracts will not impact more than thirty percent (30%) of Account GIS's assets
at any one time. Account GIS may also write covered call options on securities
which it owns, and may purchase index or individual equity call or put options.

INVESTMENT RESTRICTIONS

The investment restrictions for Account GIS set forth in items 1 through 9 are
fundamental and may not be changed without a vote of a majority of the
outstanding voting securities, as defined in the 1940 Act. Items 10 through 13
may be changed by a vote of the Board of Managers.

1. Not more than 5% of the assets of the Account will be invested in the
securities of any one issuer, except obligations of the United States
Government and its instrumentalities.

2. Borrowings will not be made, except that the right is reserved to borrow
from banks for emergency purposes, provided that such borrowings will not
exceed 5% of the value of the assets of the Account and that immediately
after the borrowing, and at all times thereafter, and while any such
borrowing is unrepaid, there will be asset coverage of at least 300% for
all borrowings of the Account.

3. Securities of other issuers will not be underwritten, except that the
Account could be deemed an underwriter when engaged in the sale of
restricted securities. (See item 13.)

4. Interests in real estate will not be purchased, except as may be
represented by securities for which there is an established market.

5. No purchase of commodities or commodity contracts will be made, except
transactions involving financial futures in order to limit transaction and
borrowing costs and for hedging purposes, as discussed above.

6. Loans will be made only through the acquisition of a portion of privately
placed issue of bonds, debentures or other evidences of indebtedness of a
type customarily purchased by institutional investors. (See item 13.)

7. Investments will not be made in the securities of a company for the purpose
of exercising management or control.

8. Not more than 10% of the voting securities of any one issuer will be
acquired. (It is the present practice of Account GIS not to exceed 5% of
the voting securities of any one issuer.)

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9. Senior securities will not be issued.

10. Short sales of securities will not be made.

11. Purchases will not be made on margin, except for short-term credits which
are necessary for the clearance of transactions, and for the placement of
not more than 5% of its net asset value in total margin deposits for
positions in futures contracts.

12. The Account will not invest in the securities of other investment
companies, except as part of a plan of merger, consolidation or acquisition
of assets.

13. Not more than 5% of the value of the assets of the Account may be invested
in restricted securities (securities which may not be publicly offered
without registration under the Securities Act of 1933).

Changes in the investments of Account GIS may be made from time to time to take
into account changes in the outlook for particular industries or companies.
Account GIS's investments will not, however, be concentrated in any one
industry; that is, no more than twenty-five percent (25%) of the value of its
assets will be invested in any one industry. While Account GIS may occasionally
invest in foreign securities, it is not anticipated that such investments will,
at any time, account for more than ten percent (10%) of its investment
portfolio.

The assets of Account GIS will be kept fully invested, except that (a)
sufficient cash may be kept on hand to provide for variable annuity contract
obligations, and (b) reasonable amounts of cash, United States Government or
other liquid securities, such as short-term bills and notes, may be held for
limited periods, pending investment in accordance with their respective
investment policies.

PORTFOLIO TURNOVER

Although Account GIS intends to purchase securities for long-term appreciation
of capital and income, and does not intend to place emphasis on obtaining
short-term trading profits, such short-term trading may occur. A higher turnover
rate should not be interpreted as indicating a variation from the stated
investment policy of seeking long-term accumulation of capital, and will
normally increase the brokerage costs of Account GIS. However, negotiated fees
and the use of futures contracts will help to reduce brokerage costs. While
there is no restriction on portfolio turnover, Account GIS expects to have a
moderate to high level of portfolio turnover in the range of 150% to 300%. The
portfolio turnover rate for Account GIS for the years ended December 31, 1997,
1998 and 1999 was 64%, 50% and 47%, respectively.

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

INVESTMENT OBJECTIVE

The basic investment objective of Account QB is the selection of investments
from the point of view of an investor concerned primarily with current income,
moderate capital volatility and total return.

It is contemplated that the assets of Account QB will be invested in money
market obligations, including, but not limited to, Treasury bills, repurchase
agreements, commercial paper, bank certificates of deposit and bankers'
acceptances, and in publicly traded debt securities, including bonds, notes,
debentures, equipment trust certificates and short-term instruments. These
securities may carry certain equity features such as conversion or exchange
rights or warrants for the acquisition of stocks of the same or different
issuer, or participations based on revenues, sales or profits. It is currently
anticipated that the market value-weighted average maturity of the portfolio
will not exceed five years. (In the case of mortgage-backed securities, the
estimated average life of cash flows will be used instead of average maturity.)
Investments in longer term obligations may be made if the Board of Managers
concludes that the investment yields justify a longer term commitment.

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Account QB may purchase and sell futures contracts on debt securities ("interest
rate futures") to hedge against changes in interest rates that might otherwise
have an adverse effect upon the value of Account QB's securities.

The portfolio will be actively managed and Account QB may sell investments prior
to maturity to the extent that his action is considered advantageous in light of
factors such as market conditions or brokerage costs. While the investments of
Account QB are generally not listed securities, there are firms which make
markets in the type of debt instruments which Account QB holds. No problems of
salability are anticipated with regard to the investments of Account QB.

The Board of Managers will weigh considerations of risks, yield and ratings in
implementing Account QB's fundamental investment policies. There are no specific
criteria with regard to quality or ratings of the investments of Account QB, but
it is anticipated that they will be of investment grade or its equivalent as
determined in good faith by the Board of Managers. There may or may not be more
risk in investing in debt instruments where there are no specific criteria with
regard to quality or ratings of the investments.

INVESTMENT RESTRICTIONS

The investment restrictions set forth in items 1 through 9 below are fundamental
and may not be changed without a vote of a majority of the outstanding voting
securities of Account QB, as defined in the 1940 Act. Items 10 through 13 may be
changed by a vote of the Board of Managers of Account QB.

1. Not more than 15% of the value of the assets of Account QB will be invested
in the securities of any one issuer, except obligations of the United
States Government and its instrumentalities, for which there is no limit.

2. Borrowings will not be made, except that the right is reserved to borrow
from banks for emergency purposes, provided that these borrowings will not
exceed 5% of the value of the assets of Account QB and that immediately
after the borrowing, and at all times thereafter, and while any borrowing
is unrepaid, there will be asset coverage of at least 300% for all
borrowings of Account QB.

3. Securities of other issuers will not be underwritten, except that Account
QB could be deemed to be an underwriter when engaged in the sale of
restricted securities.

4. Interests in real estate will not be purchased, except as may be
represented by securities for which there is an established market.

5. No purchase of commodities or commodity contracts will be made, except
transactions involving financial futures used as a hedge against
unanticipated changes in prevailing levels of interest rates.

6. Loans will be made only through the acquisition of a portion of privately
placed issue of bonds, debentures and other evidences of indebtedness of a
type customarily purchased by institutional investors.

7. Investments will not be made in the securities of a company for the purpose
of exercising management or control.

8. Not more than 10% of the voting securities of any one issuer will be
acquired.

9. Senior securities will not be issued.

10. Short sales of securities will not be made.

11. Purchases will not be made on margin, except for any short- term credits
that are necessary for the clearance of transactions and to place up to 5%
of the value of its net assets in total margin deposits for positions in
futures contracts.

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12. Account QB will not invest in the securities of other investment companies,
except as part of a plan of merger, consolidation or acquisition of assets.

13. The average period of maturity (or in the case of mortgage-backed
securities, the estimated average life of cash flows) of all fixed interest
debt instruments held by Account QB will not exceed five years.

The investments of Account QB will not be concentrated in any one industry; that
is, no more than twenty-five percent (25%) of the value of its assets will be
invested in any one industry. There is no investment policy as to Account QB's
investment in foreign securities.

PORTFOLIO TURNOVER

Brokerage costs associated with short-term debt instruments are significantly
lower than those incurred on equity investments, and thus, a high portfolio
turnover rate would not adversely affect the brokerage costs of Account QB to
the same extent as high turnover in a separate account which invests primarily
in common stock. The portfolio turnover rate for Account QB for the years ended
December 31, 1997, 1998 and 1999 was 196%, 438% and 340%, respectively.

DESCRIPTION OF CERTAIN TYPES OF INVESTMENTS AND INVESTMENT TECHNIQUES
AVAILABLE TO THE SEPARATE ACCOUNTS

WRITING COVERED CALL OPTIONS

Account GIS may write covered call options on portfolio securities for which
call options are available and which are listed on a national securities
exchange. These call options generally will be short-term contracts with a
duration of nine months or less.

Account GIS will write only "covered" call options, that is, it will own the
underlying securities which are acceptable for escrow when it writes the call
option and until the obligation to sell the underlying security is extinguished
by exercise or expiration of the call option, or until a call option covering
the same underlying security and having the same exercise price and expiration
date is purchased. Account GIS will receive a premium for writing a call option,
but gives up, until the expiration date, the opportunity to profit from an
increase in the underlying security's price above the exercise price. Account
GIS will retain the risk of loss from a decrease in the price of the underlying
security. Writing covered call options is a conservative investment technique
which is believed to involve relatively little risk, but which is capable of
enhancing an account's total returns.

The premium received for writing a covered call option will be recorded as a
liability in the Account's Statement of Assets and Liabilities. This liability
will be adjusted daily to the option's current market value, which will be the
latest sale price at the close of the New York Stock Exchange, or, in the
absence of such sale, at the latest bid quotation. The liability will be
extinguished upon expiration of the option, the purchase of an identical option
in a closing transaction, or delivery of the underlying security upon exercise
of the option.

The Options Clearing Corporation is the issuer of, and the obligor on, the
covered call options written by Account GIS. In order to secure an obligation to
deliver to the Options Clearing Corporation the underlying security of a covered
call option written by Account GIS, the Account will be required to make escrow
arrangements.

In instances where Account GIS believes it is appropriate to close a covered
call option, it can close out the previously written call option by purchasing a
call option on the same underlying security with the same exercise price and
expiration date. Account GIS may also, under certain circumstances, be able to
transfer a previously written call option.

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will exist for a particular call option at such time. If Account GIS cannot
effect a closing transaction, it will not be able to sell the underlying
security while the previously written option remains outstanding, even though it
might otherwise be advantageous to do so.

If a substantial number of the call options are exercised, the Account's rate of
portfolio turnover may exceed historical levels. This would result in higher
brokerage commissions in connection with the writing of covered call options and
the purchase of call options to close out previously written options. Such
brokerage commissions are normally higher than those applicable to purchases and
sales of portfolio securities.

BUYING PUT AND CALL OPTIONS

Account GIS may purchase put options on securities held, or on futures contracts
whose price volatility is expected to closely match that of securities held, as
a defensive measure to preserve contract owners' capital when market conditions
warrant. Account GIS may purchase call options on specific securities, or on
futures contracts whose price volatility is expected to closely match that of
securities, eligible for purchase by Account GIS, in anticipation of or as a
substitute for the purchase of the securities themselves. These options may be
listed on a national exchange or executed "over-the-counter" with a
broker-dealer as the counterparty. While the investment adviser anticipates that
the majority of option purchases and sales will be executed on a national
exchange, put or call options on specific securities or for non-standard terms
are likely to be executed directly with a broker-dealer when it is advantageous
to do so. Option contracts will be short-term in nature, generally less than
nine months. Account GIS will pay a premium in exchange for the right to
purchase (call) or sell (put) a specific number of shares of an equity security
or futures contract at a specified price (the strike price) on or before the
expiration date of the options contract. In either case, Account GIS's risk is
limited to the option premium paid.

Account GIS may sell the put and call options prior to their expiration and
realize a gain or loss thereby. A call option will expire worthless if the price
of the related security is below the contract strike price at the time of
expiration; a put option will expire worthless if the price of the related
security is above the contract strike price at the time of expiration.

Put and call options will be employed for bona fide hedging purposes only.
Liquid securities sufficient to fulfill the call option delivery obligation will
be identified and segregated in an account; deliverable securities sufficient to
fulfill the put option obligation will be similarly identified and segregated.
In the case of put options on futures contracts, portfolio securities whose
price volatility is expected to match that of the underlying futures contract
will be identified and segregated.

FUTURES CONTRACTS

STOCK INDEX FUTURES

Account GIS will invest in stock index futures. A stock index futures contract
provides for one party to take and the other to make delivery of an amount of
cash over the hedging period equal to a specified amount times the difference
between a stock index value at the close of the last trading day of the contract
or the selling price and the price at which the futures contract is originally
struck. The stock index assigns relative values to the common stocks included in
the index and reflects overall price trends in the designated market for equity
securities. Therefore, price changes in a stock index futures contract reflect
changes in the specified index of equity securities on which the futures
contract is based. Stock index futures may also be used, to a limited extent, to
hedge specific common stocks with respect to market (systematic) risk (involving
the market's assessment of overall economic prospects) as distinguished from
stock-specific risk (involving the market's evaluation of the merits of the
issuer of a particular security). By establishing an appropriate "short"
position in stock index futures, Account GIS may seek to protect the value of
its equity securities against an overall decline in the market for equity
securities. Alternatively, in anticipation of a generally rising market, Account
GIS can seek to avoid losing the benefit of apparently low current prices by
establishing a "long" position in stock index futures and later liquidating that
position as particular equity securities are in fact acquired. Account GIS will
not be a hedging fund; however, to the extent that any hedging strategies
actually employed are successful, Account GIS will be affected to a lesser
degree by adverse overall market price movements unrelated to the merits of
specific portfolio equity securities than would otherwise

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be the case. Gains and losses on futures contracts employed as hedges for
specific securities will normally be offset by losses or gains, respectively, on
the hedged security.

INTEREST RATE FUTURES

Account QB may purchase and sell futures contracts on debt securities ("interest
rate futures") to hedge against anticipated changes in interest rates that might
otherwise have an adverse effect upon the value of an Account's debt securities.
An interest rate futures contract is a binding contractual commitment which, if
held to maturity, will result in an obligation to make or accept delivery,
during a particular future month, of debt securities having a standardized face
value and rate of return.

By purchasing interest rate futures (assuming a "long" position), Account QB
will be legally obligated to accept the future delivery of the underlying
security and pay the agreed price. This would be done, for example, when Account
QB intends to purchase particular debt securities when it has the necessary
cash, but expects the rate of return available in the securities markets at that
time to be less favorable than rates currently available in the futures markets.
If the anticipated rise in the price of the debt securities should occur (with
its concurrent reduction in yield), the increased cost of purchasing the
securities will be offset, at least to some extent, by the rise in the value of
the futures position taken in anticipation of the securities purchase.

By selling interest rate futures held by it, or interest rate futures having
characteristics similar to those held by it (assuming a "short" position),
Account QB will be legally obligated to make the future delivery of the security
against payment of the agreed price. Such a position seeks to hedge against an
anticipated rise in interest rates that would adversely affect the value of
Account QB's portfolio debt securities.

Open futures positions on debt securities will be valued at the most recent
settlement price, unless such price does not appear to the Board of Managers to
reflect the fair value of the contract, in which case the positions will be
valued at fair value determined in good faith by or under the direction of the
Board of Managers.

Hedging by use of interest rate futures seeks to establish, with more certainty
than would otherwise be possible, the effective rate of return on portfolio
securities. When hedging is successful, any depreciation in the value of
portfolio securities will substantially be offset by appreciation in the value
of the futures position.

FUTURES MARKETS AND REGULATIONS

When a futures contract is purchased, Accounts GIS and QB will set aside, in an
identifiable manner, an amount of cash and cash equivalents equal to the total
market value of the futures contract, less the amount of the initial margin. The
Accounts will incur brokerage fees in connection with their futures
transactions, and will be required to deposit and maintain funds with brokers as
margin to guarantee performance of future obligations.

Positions taken in the futures markets are not normally held to maturity, but
instead are liquidated through offsetting transactions which may result in a
profit or a loss. Closing out an open futures contract sale or purchase is
effected by entering into an offsetting futures contract purchase or sale,
respectively, for the same aggregate amount of the stock index or interest rate
futures contract and the same delivery date. If the offsetting purchase price is
less than the original sale price, the Accounts realize a gain; if it is more,
the Accounts realize a loss. Conversely, if the offsetting sale price is more
than the original purchase price, the Accounts realize a gain; if less, a loss.
While futures positions taken by the Accounts will usually be liquidated in this
manner, the Accounts may instead make or take delivery of the underlying
securities whenever it appears economically advantageous for them to do so. In
determining gain or loss, transaction costs must also be taken into account.
There can be no assurance that the Accounts will be able to enter into an
offsetting transaction with respect to a particular contract at a particular
time.

A clearing corporation associated with the exchange on which futures are traded
guarantees that the sale and purchase obligations will be performed with regard
to all positions that remain open at the termination of the contract.

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All stock index and interest rate futures will be traded on exchanges that are
licensed and regulated by the Commodity Futures Trading Commission ("CFTC").
Stock index futures are currently traded on the New York Futures Exchange and
the Chicago Mercantile Exchange. Interest rate futures are actively traded on
the Chicago Board of Trade and the International Monetary Market at the Chicago
Mercantile Exchange.

The investment advisers do not believe any of the Accounts to be a "commodity
pool" as defined under the Commodity Exchange Act. The Accounts will only enter
into futures contracts for bona fide hedging or other appropriate risk
management purposes as permitted by CFTC regulations and interpretations, and
subject to the requirements of the SEC. The Accounts will not purchase or sell
futures contracts for which the aggregate initial margin exceeds five percent
(5%) of the fair market value of their individual assets, after taking into
account unrealized profits and unrealized losses on any such contracts which
they have entered into. The Accounts will further seek to assure that
fluctuations in the price of any futures contracts that they use for hedging
purposes will be substantially related to fluctuations in the price of the
securities which they hold or which they expect to purchase, although there can
be no assurance that the expected result will be achieved.

As evidence of their hedging intent, the Accounts expect that on seventy-five
percent (75%) or more of the occasions on which they purchase a long futures
contract, they will effect the purchase of securities in the cash market or take
delivery at the close of a futures position. In particular cases, however, when
it is economically advantageous, a long futures position may be terminated
without the corresponding purchase of securities.

SPECIAL RISKS

While certain futures contracts may be purchased and sold to reduce certain
risks, these transactions may entail other risks. Thus, while the Accounts may
benefit from the use of such futures, unanticipated changes in stock price
movements or interest rates may result in a poorer overall performance for the
Account than if it had not entered into such futures contracts. Moreover, in the
event of an imperfect correlation between the futures position and the portfolio
position which is intended to be protected, the desired protection may not be
obtained and the Accounts may be exposed to risk of loss. The investment
advisers will attempt to reduce this risk by engaging in futures transactions,
to the extent possible, where, in their judgment, there is a significant
correlation between changes in the prices of the futures contracts and the
prices of any portfolio securities sought to be hedged.

In addition to the possibility that there may be a less than perfect correlation
between movements in the futures contracts and securities in the portfolio being
hedged, the prices of futures contracts may not correlate perfectly with
movements in the underlying security due to certain market distortions. First,
rather than meeting variation margin deposit requirements should a futures
contract value move adversely, investors may close futures contracts through
offsetting transactions which could distort the normal relationship between the
index and futures markets. Second, since margin requirements in the futures
market are less onerous than in the securities market, the futures market may
attract more speculators than the securities market. Increased participation by
speculators may cause temporary price distortions. Due to the possibility of
such price distortion, and also because of the imperfect correlation discussed
above, even a correct forecast of general market trends by the investment
advisers may not result in a successful hedging transaction in the futures
market over a short time period. However, as is noted above, the use of
financial futures by the Accounts is intended primarily to limit transaction and
borrowing costs. At no time will the Accounts use financial futures for
speculative purposes.

Successful use of futures contracts for hedging purposes is also subject to the
investment advisers' ability to predict correctly movements in the direction of
the market. However, the investment advisers believe that over time the value of
the Accounts' portfolios will tend to move in the same direction as the market
indices which are intended to correlate to the price movements of the portfolio
securities sought to be hedged.

MONEY MARKET INSTRUMENTS

Money market securities are instruments with remaining maturities of one year or
less, such as bank certificates of deposit, bankers' acceptances, commercial
paper (including master demand notes), and obligations issued or guaranteed by
the United States Government, its agencies or instrumentalities, some of which
may be subject to repurchase agreements.

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CERTIFICATES OF DEPOSIT

Certificates of deposit are receipts issued by a bank in exchange for the
deposit of funds. The issuer agrees to pay the amount deposited plus interest to
the bearer of the receipt on the date specified on the certificate. The
certificate usually can be traded in the secondary market prior to maturity.

BANKERS' ACCEPTANCES

Bankers' acceptances typically arise from short-term credit arrangements
designed to enable businesses to obtain funds to finance commercial
transactions. Generally, an acceptance is a time draft drawn on a bank by an
exporter or an importer to obtain a stated amount of funds to pay for specific
merchandise. The draft is then "accepted" by the bank which, in effect,
unconditionally guarantees to pay the face value of the instrument on its
maturity date. The acceptance may then be held by the accepting bank as an
earning asset or it may be sold in the secondary market at the going rate of
discount for a specific maturity. Although maturities for acceptances can be as
long as 270 days, most acceptances have maturities of six months or less.
Bankers' acceptances acquired by the Accounts must have been accepted by U.S.
commercial banks, including foreign branches of U.S. commercial banks, having
total deposits at the time of purchase in excess of $1 billion, and must be
payable in U.S. dollars.

COMMERCIAL PAPER RATINGS

Investments in commercial paper are limited to those rated A-1 by Standard &
Poor's Corporation and Prime-1 by Moody's Investors Service, Inc. Commercial
paper rated A-1 by S&P has the following characteristics: (1) liquidity ratios
are adequate to meet cash requirements; (2) the issuer's long- term senior debt
is rated "A" or better, although in some cases "BBB" credits may be allowed; (3)
the issuer has access to at least two additional channels of borrowing; (4)
basic earnings and cash flow have an upward trend with allowances made for
unusual circumstances; and (5) the issuer's industry is typically well
established and the issuer has a strong position within the industry.

MASTER DEMAND NOTES

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separate account must permit it to demand payment of principal and accrued
interest at any time (on not more than seven days notice) or to resell the note
at any time to a third party. Master demand notes may have maturities of more
than one year, provided they specify that (i) the account be entitled to payment
of principal and accrued interest upon not more than seven days notice, and (ii)
the rate of interest on such notes be adjusted automatically at periodic
intervals which normally will not exceed 31 days, but which may extend up to one
year. Because these types of notes are direct lending arrangements between the
lender and the borrower, such instruments are not normally traded, and there is
no secondary market for these notes, although they are redeemable and thus
repayable by the borrower at face value plus accrued interest at any time.
Accordingly, the right to redeem is dependent upon the ability of the borrower
to pay principal and interest on demand. In connection with master demand note
arrangements, the investment adviser considers earning power, cash flow, and
other liquidity ratios of the borrower to pay principal and interest on demand.
These notes, as such, are not typically rated by credit rating agencies. Unless
they are so rated, a separate account may invest in them only if at the time of
an investment the issuer meets the criteria set forth above for commercial
paper. The notes will be deemed to have a maturity equal to the longer of the
period remaining to the next interest rate adjustment or the demand notice
period.

UNITED STATES GOVERNMENT SECURITIES

Securities issued or guaranteed by the United States Government include a
variety of Treasury securities that differ only in their interest rates,
maturities and dates of issuance. Treasury Bills have maturities of one year or
less, Treasury Notes have maturities of one to ten years, and Treasury Bonds
generally have maturities of greater than ten years at the date of issuance.

REPURCHASE AGREEMENTS

Interim cash balances may be invested from time to time in repurchase agreements
with approved counterparties. Approved counterparties are limited to national
banks or reporting broker-dealers meeting the Advisor's credit quality standards
as presenting minimal risk of default. All repurchase transactions must be
collateralized by U.S. Government securities with market value no less than 102%
of the amount of the transaction, including accrued interest. Repurchase
transactions generally mature the next business day but, in the event of a
transaction of longer maturity, collateral will be marked to market daily and,
when required, additional cash or qualifying collateral will be required from
the counterparty.

11
<PAGE> 245

more or less than the rate on the securities collateralizing the transaction.
Physical delivery or, in the case of "book-entry" securities, segregation in the
counterparty's account at the Federal Reserve for the benefit of the Portfolio
is required to establish a perfected claim to the collateral for the term of the
agreement in the event the counterparty fails to fulfill its obligation.

As the securities collateralizing a repurchase transaction are generally of
longer maturity than the term of the transaction, in the event of default by the
counterparty on its obligation, the Portfolio would bear the risks of delay,
adverse market fluctuation and transaction costs in disposing of the collateral.

INVESTMENT MANAGEMENT AND ADVISORY SERVICES

The investments and administration of the separate accounts are under the
direction of the Board of Managers. Subject to the authority of the Board of
Managers, Travelers Asset Management International Company LLC ("TAMIC")
furnishes investment management and advisory services to Account GIS and QB,
according to the terms of written Investment Advisory Agreements. The agreement
effective May 1, 1998 between Account GIS and TAMIC was approved by a vote of
the Variable Annuity Contract Owners at their meeting held on April 27, 1998.
The agreement between Account QB and TAMIC was approved by a vote of the
Variable Annuity Contract Owners at their meeting held on April 23, 1993.

Each of these agreements will continue in effect as described below in (3), as
required by the 1940 Act. Each of the agreements:

1. provides that for investment management and advisory services, the Company
will pay to TAMIC, an advisory fee based on the current value of the assets
of the accounts for which TAMIC acts as investment adviser (see "Advisory
and Subadvisory Fees" below:);

2. may not be terminated by TAMIC without prior approval of a new investment
advisory agreement by those casting a majority of the votes entitled to be
cast and will be subject to termination without the payment of any penalty,
upon sixty days written notice, by the Board of Managers or by a vote of
those casting a majority of the votes entitled to be cast;

3. will continue in effect for a period more than two years from the date of
its execution, only so long as its continuance is specifically approved at
least annually by a vote of a majority of the Board of Managers, or by a
vote of a majority of the outstanding voting securities of the Account. In
addition, and in either event, the terms of the agreement must be approved
annually by a vote of a majority of the Board of Managers who are not
parties to, or interested persons of any party to, the agreement, cast in
person, at a meeting called for the purpose of voting on the approval and
at which the Board of Managers has been furnished the information that is
reasonably necessary to evaluate the terms of the agreement;

4. will automatically terminate upon assignment.

The Travelers Investment Management Company (TIMCO) serves as subadviser to
Account GIS, pursuant to a written agreement dated May 1, 1998 with TAMIC, which
was approved by a vote of the Variable Annuity Contract Owners at their meeting
held on April 27, 1998. TAMIC pays TIMCO an amount equivalent on an annual basis
to a maximum of 0.45% of the aggregate of the average daily net assets of
Account GIS, grading down to 0.20%.

ADVISORY AND SUBADVISORY FEES

12
<PAGE> 246

1998 to April 30, 1998 was $1,094,293. The subadvisory fees paid to TIMCO by
TAMIC for the period May 1, 1998 to December 31, 1998 was $2,291,392 and for the
year ended December 31, 1999 was $3,895,005 The total advisory fee paid to TAMIC
for the period May 1, 1998 to December 31, 1998 was $3,274,491 and for the year
ended Decmber 31, 1999 was $5,840,016.

For furnishing investment management and advisory services to Account QB, TAMIC
is paid an amount equivalent on an annual basis to 0.3233% of the average daily
net assets of Account QB. For the years ended December 31, 1997, 1998 and 1999
the advisory fees were $529,458, $518,262 and $495,204, respectively.

TAMIC

TAMIC, an indirect wholly owned subsidiary of Citigroup Inc., is located at One
Tower Square, Hartford, Connecticut 06183. In addition to providing subadvisory
services to Accounts GIS and QB, TAMIC acts as investment adviser for other
investment companies which serve as the funding media for certain variable
annuity and variable life insurance contracts offered by The Travelers Insurance
Company and its affiliates. TAMIC also acts as investment adviser for individual
and pooled pension and profit-sharing accounts, for offshore insurance companies
affiliated with The Travelers Insurance Company, and for non-affiliated
insurance companies, both domestic and offshore.

Investment advice and management for TAMIC's clients are furnished in accordance
with their respective investment objectives and policies and investment
decisions for the Accounts will be made independently from those of any other
accounts managed by TAMIC. However, securities owned by Accounts GIS and QB may
also be owned by other clients and it may occasionally develop that the same
investment advice and decision for more than one client is made at the same
time. Furthermore, it may develop that a particular security is bought or sold
for only some clients even though it might be held or bought or sold for other
clients, or that a particular security is bought for some clients when other
clients are selling the security. When two or more accounts are engaged in the
purchase or sale of the same security, the transactions are allocated as to
amount in accordance with a formula which is equitable to each account. It is
recognized that in some cases this system could have a detrimental effect on the
price or volume of the security as far as Accounts GIS and QB are concerned. In
other cases, however, it is believed that the ability of Account QB to
participate in volume transactions will produce better executions for the
account.

BROKERAGE

Subject to approval of the Board of Managers, it is the policy of TAMIC, in
executing transactions in portfolio securities, to seek best execution of orders
at the most favorable prices. The determination of what may constitute best
execution and price in the execution of a securities transaction by a broker
involves a number of considerations, including, without limitation, the overall
direct net economic result to Account QB, involving both price paid or received
and any commissions and other cost paid, the efficiency with which the
transaction is effected, the ability to effect the transaction at all where a
large block is involved, the availability of the broker to stand ready to
execute potentially difficult transactions in the future and the financial
strength and stability of the broker. Such considerations are judgmental and are
weighed by management in determining the overall reasonableness of brokerage
commissions paid. Subject to the foregoing, a factor in the selection of brokers
is the receipt of research services, analyses and reports concerning issuers,
industries, securities, economic factors and trends, and other statistical and
factual information. Any such research and other statistical and factual
information provided by brokers is considered to be in addition to and not in
lieu of services required to be performed by TAMIC under its Investment Advisory
Agreements. The cost, value and specific application of such information are
indeterminable and hence are not practicably allocable among Account QB and
other clients of TAMIC who may indirectly benefit from the availability of such
information. Similarly, Account QB may indirectly benefit from information made
available as a result of transactions for such clients.

13
<PAGE> 247

be no brokerage commissions paid for such purchases. Purchases from the
underwriters will include the underwriting commission or concession, and
purchases from dealers serving as market makers will include the spread between
the bid and asked prices. Where transactions are made in the over-the-counter
market, Account QB will deal with primary market makers unless more favorable
prices are otherwise obtainable. Brokerage fees will be incurred in connection
with futures transactions, and Account QB will be required to deposit and
maintain funds with brokers as margin to guarantee performance of future
obligations.

TAMIC may follow a policy of considering the sale of units of Account QB a
factor in the selection of broker-dealers to execute portfolio transactions,
subject to the requirements of best execution described above.

The policy of TAMIC with respect to brokerage is and will be reviewed by the
Board of Managers periodically. Because of the possibility of further regulatory
developments affecting the securities exchanges and brokerage practices
generally, the foregoing practices may be changed, modified or eliminated.

The were no brokerage commissions paid by Account QB for the fiscal years ended
December 31, 1997, 1998 and 1999. For the fiscal year ended December 31, 1999,
no portfolio transactions were directed to certain brokers because of research
services. No commissions were paid to broker dealers affiliated with TAMIC.

TIMCO

TIMCO, an indirect wholly owned subsidiary of Citigroup Inc., is located at One
Tower Square, Hartford, Connecticut 06183. In addition to providing subadvisory
services to Account GIS, TIMCO acts as investment adviser (or subadviser) for
other investment companies which serve as the funding media for certain variable
annuity and variable life insurance contracts offered by The Travelers Insurance
Company and its affiliates. TIMCO also acts as investment adviser for individual
and pooled pension and profit-sharing accounts and for affiliated companies of
The Travelers Insurance Company.

Investment decisions for Account GIS will be made independently from those of
any other accounts managed by TIMCO. If, however, accounts managed by TIMCO are
simultaneously engaged in the purchase of the same security, then available
securities may be allocated to each account and may be averaged as to price in
whatever manner TIMCO deems to be fair. In some cases, this system might
adversely affect the price or volume of securities being bought or sold by an
account, while in other cases it may produce better executions or lower
brokerage rates.

BROKERAGE

Subject to approval of the Board of Managers, and in accordance with the
Investment Advisory Agreement, TIMCO will place purchase and sale orders for the
portfolio securities of Account GIS through brokerage firms which it may select
from time to time with the objective of seeking the best execution by
responsible brokerage firms at reasonably competitive rates. To the extent
consistent with this policy, certain brokerage transactions may be placed with
firms which provide brokerage and research services to TIMCO, and such
transactions may be paid for at higher rates than other firms would charge. The
term "brokerage and research services" includes advice as to the value of
securities; the advisability of investing in, purchasing or selling securities;
the availability of securities for purchasers or sellers of securities;
furnishing analyses and reports concerning issues, industries, securities,
economic factors and trends, portfolio strategy and performance of accounts; and
effecting securities transactions and performing functions incidental thereto
(such as clearance and settlement). These brokerage and research services may be
utilized in providing investment advice to Account GIS and may also be utilized
in providing investment advice and management to all accounts over which TIMCO
exercises investment discretion, but not all of such services will necessarily
be utilized in providing investment advice to all accounts. This practice may be
expected to result in greater cost to the Accounts than might otherwise be the
case if brokers whose charges were based on execution alone were used for such
transactions. TIMCO believes that brokers' research services are very important
in providing investment advice to the Accounts but is unable to give the
services a dollar value. While research services are not expected to reduce the
expenses of TIMCO, TIMCO will, through the use of these services, avoid the
additional expenses which would be incurred if it should attempt to develop
comparable information through its own staff.

14
<PAGE> 248

Transactions in the over-the-counter market are placed with the principal market
makers unless better price and execution may be obtained otherwise. Brokerage
fees will be incurred in connection with futures transactions, and Account GIS
will be required to deposit and maintain funds with brokers as margin to
guarantee performance of future obligations.

The overall reasonableness of brokerage commissions paid is evaluated by
personnel of TIMCO responsible for trading and for managing Account GIS's
portfolio by comparing brokerage firms utilized by TIMCO and other firms with
respect to the following factors: the prices paid or received in securities
transactions, speed of execution and settlement, size and difficulty of the
brokerage transactions, the financial soundness of the firms, and the quality,
timeliness and quantity of research information and reports.

The total brokerage commissions paid by Account GIS for the fiscal years ending
December 31, 1997, 1998 and 1999 were $818,411, $896,520 and $970,607,
respectively. For the fiscal year ended December 31, 1999, portfolio
transactions in the amount of $739,890,351 were directed to certain brokers
because of research services, of which $753,650 was paid in commissions with
respect to such transactions. No formula was used in placing such transactions
and no specific amount of transactions was allocated for research services. For
the year ended December 31, 1999 commissions in the amounts of $25,640 and
$32,490 were paid to Salomon Smith Barney Inc. and The Robinson Humphrey
Company, Inc., respectively, both affiliates of TIMCO, which equals, for each,
2.6% and 3.3% of Account GIS's aggregate brokerage commissions paid to such
brokers during 1999. The percentage of Account GIS's aggregate dollar amount of
transactions involving the payment of commissions effected through Salomon Smith
Barney and Robinson Humphrey were 2.4% and 2.9%, respectively.

VALUATION OF ASSETS

The value of the assets of each Separate Account is determined on each Valuation
Date as of the close of the New York Stock Exchange (the "Exchange"). If the
Exchange is not open for trading on any such day, then such computation shall be
made as of the normal close of the Exchange. Each security traded on a national
securities exchange is valued at the last reported sale price on the Valuation
Date. If there has been no sale on that day, then the value of the security is
taken to be the mean between the reported bid and asked prices on the Valuation
Date or on the basis of quotations received from a reputable broker or any other
recognized source.

Any security not traded on a securities exchange but traded in the
over-the-counter market and for which market quotations are readily available is
valued at the mean between the quoted bid and asked prices on the Valuation Date
or on the basis of quotations received from a reputable broker or any other
recognized source.

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.

Short-term investments for which a quoted market price is available are valued
at market. Short term investments maturing in more than sixty days for which
there is no reliable quoted market price are valued by "marking to market"
(computing a market value based upon quotations from dealers or issuers for
securities of a similar type, quality and maturity). "Marking to market" takes
into account unrealized appreciation or depreciation due to changes in interest
rates or other factors which would influence the current fair values of such
securities. Short-term investments maturing in sixty days or less for which
there is no reliable quoted market price are valued at amortized cost which
approximates market.

THE BOARD OF MANAGERS

<PAGE> 249

participating in the Separate Accounts. A majority of the members of the Board
of Managers are persons who are not affiliated with The Travelers Insurance
Company, TIMCO, TAMIC or their affiliates.

Name and Position
With the Fund Principal Occupation During Last Five Years
- ----------------- -------------------------------------------
<S> <C>
* Heath B. McLendon Managing Director (1993-present), Salomon Smith Barney, Inc. ("Salomon Smith
Chairman and Trustee Barney"); President and Director (1994-present), SSB Citi Fund Management LLC;
7 World Trade Center (successor to SSBC Fund Management Inc.); Director and President
New York, NY (1996-present), Travelers Investment Adviser, Inc.; Chairman and Director of
Age 66 sixty investment companies associated with Salomon Smith Barney; Trustee (1999)
of 6 Trusts of Citifunds' family of Trusts; Trustee, Drew University; Advisory
Director, M&T Bank; Chairman, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Chairman, Board of
Trustees, five Mutual Funds sponsored by The Travelers Insurance Company++;
prior to July 1993, Senior Executive Vice President of Shearson Lehman Brothers
Inc.

Knight Edwards Of Counsel (1988-present), Partner (1956-1988), Edwards & Angell, Attorneys;
Trustee Member, Advisory Board (1973-1994), thirty-one mutual funds sponsored by
154 Arlington Avenue Keystone Group, Inc.; Member, Board of Managers, seven Variable Annuity
Providence, RI Separate Accounts of The Travelers Insurance Company+; Trustee, five Mutual
Age 76 Funds sponsored by The Travelers Insurance Company.++
</TABLE>

<PAGE> 250

<TABLE>
<S> <C>
Robert E. McGill, III Retired manufacturing executive. Director (1983-1995), Executive Vice President
Trustee (1989-1994) and Senior Vice President, Finance and Administration (1983-1989),
295 Hancock Street The Dexter Corporation (manufacturer of specialty chemicals and materials);
Williamstown, MA Vice Chairman (1990-1992), Director (1983-1995), Life Technologies, Inc. (life
Age 68 science/biotechnology products); Director, (1994-1999), The Connecticut Surety
Corporation (insurance); Director (1995-present), Chemfab Corporation
(specialty materials manufacturer); Director (1999-present), Ravenwood Winery,
Inc.; Director (1999-present), Lydall Inc. (manufacturer of fiber materials);
Member, Board of Managers, seven Variable Annuity Separate Accounts of The
Travelers Insurance Company+; Trustee, five Mutual Funds sponsored by The
Travelers Insurance Company.++

Lewis Mandell Dean, School of Management (1998-present), University at Buffalo; Dean, College
Trustee of Business Administration (1995-1998), Marquette University; Professor of
160 Jacobs Hall Finance (1980-1995) and Associate Dean (1993-1995), School of Business
Buffalo, NY Administration, and Director, Center for Research and Development in Financial
Age 57 Services (1980-1995), University of Connecticut; Director (2000-present),
Delaware North Corp. (hospitality business); Director (1992-present), GZA
Geoenvironmental Tech, Inc. (engineering services); Member, Board of Managers,
seven Variable Annuity Separate Accounts of The Travelers Insurance Company+;
Trustee, five Mutual Funds sponsored by The Travelers Insurance Company.++

Frances M. Hawk, Private Investor, (1997-present); Portfolio Manager (1992-1997, HLM Management
CFA, CFP Company, Inc. (investment management); Assistant Treasurer, Pensions and
Trustee Benefits Management (1989-1992), United Technologies Corporation (broad-based
28 Woodland Street designer and manufacturer of high technology products); Member, Board of
Sherborn, MA Managers, seven Variable Annuity Separate Accounts of The Travelers Insurance
Age 52 Company+; Trustee, five Mutual Funds sponsored by The Travelers Insurance
Company.++

Ernest J. Wright Vice President and Secretary (1996-present), Assistant Secretary (1994-1996),
Secretary to the Board Counsel (1987-present), The Travelers Insurance Company; Secretary, Board of
One Tower Square Managers, seven Variable Annuity Separate Accounts of The Travelers Insurance
Hartford, Connecticut Company+; Secretary, Board of Trustees, five Mutual Funds sponsored by The
Age 59 Travelers Insurance Company.++

Kathleen A. McGah Deputy General Counsel (1999 - present); Assistant Secretary (1995-present),
Assistant Secretary to The Travelers Insurance Company; Assistant Secretary, Board of Managers, seven
The Board Variable Annuity Separate Accounts of The Travelers Insurance Company+;
One Tower Square Assistant Secretary, Board of Trustees, five Mutual Funds sponsored by The
Hartford, Connecticut Travelers Insurance Company.++ Prior to January 1995, Counsel, ITT Hartford
Age 49 Life Insurance Company.

David Golino Vice President (1999-present); Second Vice President (1996-1999), The Travelers
Principal Accounting Officer Insurance Company; Principal Accounting Officer, seven Variable Annuity
One Tower Square Separate Accounts of The Travelers Insurance Company.++ Prior to May 1996,
Hartford, Connecticut Senior Manager, Deloitte & Touche LLP.
Age 38
</TABLE>

<PAGE> 251

++ These five Mutual Funds are: Capital Appreciation Fund, Money Market
Portfolio Trust, High Yield Bond Trust, Managed Assets Trust and The
Travelers Series Trust.

* Mr. McLendon is an "interested person" within the meaning of the 1940 Act
by virtue of his position as Managing Director of Salomon Smith Barney Inc., an
indirect wholly owned subsidiary of Citigroup Inc. and also owns shares and
options to purchase shares of Citigroup Inc., the indirect parent of The
Travelers Insurance Company.

The Company is responsible for payment of the fees and expenses of the Board of
Managers, and the expenses of audit of the Separate Accounts, as well as other
expenses for services related to the operations of the accounts, for which it
deducts certain amounts from purchase payments and from the accounts.

Members of the Board of Managers who are also officers or employees of Citigroup
Inc. or its subsidiaries are not entitled to any fee. Members of the Board of
Managers who are not affiliated as employees of Citigroup Inc. or its
subsidiaries receive an aggregate retainer of $19,000 for service on the Boards
of the seven Variable Annuity Separate Accounts established by The Travelers
Insurance Company and the five Mutual Funds sponsored by The Travelers Insurance
Company. They also receive an aggregate fee of $2,500 for each meeting of such
Boards attended. Board Members with 10 years of service may agree to provide
services as emeritus director at age 72 or upon reaching 80 years of age and
will receive 50% of the annual retainer and 50% of meeting fees if attended.

ADMINISTRATIVE SERVICES

Under the terms of an Administrative Services Agreement and Agreement to Provide
Guarantees (formerly the Distribution and Management Agreement), the Company
provides all administrative services and mortality and expense risk guarantees
related to variable annuity contracts issued by the Company in connection with
Account GIS and Account QB and assumes the risk of minimum death benefits, as
applicable. The Company also pays all sales costs (including costs associated
with the preparation of sales literature); all costs of qualifying Account GIS
and Account QB and the variable annuity contracts with regulatory authorities;
the costs of proxy solicitation; all custodian, accountants' and legal fees; and
all compensation paid to the unaffiliated members of the Board of Managers. The
Company also provides without cost to Account GIS and Account QB all necessary
office space, facilities, and personnel to manage its affairs.

The Company received the following amounts from the Separate Accounts in each of
the last three fiscal years for services provided under the Administrative
Services Agreement and Agreement to provide Guarantees:

<TABLE>
<CAPTION>
SEPARATE ACCOUNT 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
GIS $12,365,601 $9,908,196 $7,623,733
QB $ 1,998,726 $2,069,452 $2,144,373
</TABLE>

18
<PAGE> 252

SECURITIES CUSTODIAN

Chase Manhattan Bank, N.A., Chase MetroTech Center, Brooklyn, New York, is the
custodian of the portfolio securities and similar investments of Accounts GIS
and QB.

INDEPENDENT ACCOUNTANTS

Financial statements as of and for the year ended December 31, 1999 of Accounts
GIS, QB, MM, TGIS, TSB, and TAS, included in the Annual Reports (for each)
incorporated by reference in this SAI, have been incorporated herein in
reliance on the reports of KPMG LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing. These financial
statements include prior period amounts which were audited by other independent
accountants.

The consolidated financial statements of The Travelers Insurance Company and
Subsidiaries as of December 31, 1999 and 1998, and for each of the years in the
three-year period ended December 31, 1999, have been included herein in reliance
upon the report of KPMG LLP, independent certified public accountants, appearing
elsewhere herein, and upon the authority of said firm as experts in accounting
and auditing.

19
<PAGE> 253

THIS PAGE INTENTIONALLY LEFT BLANK.

<PAGE> 254

THE TRAVELERS

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES AND
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

GROUP VARIABLE ANNUITY CONTRACTS

ISSUED BY

THE TRAVELERS INSURANCE COMPANY

Pension and Profit-Sharing Programs

L-11162S TIC Ed. 5-2000
Printed in U.S.A.
<PAGE> 255
INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholder
The Travelers Insurance Company and Subsidiaries:

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 are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP
Hartford, Connecticut
January 18, 2000

F-1
<PAGE> 256
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
($ in millions)

FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
---- ---- ----

See Notes to Consolidated Financial Statements.

F-2
<PAGE> 257
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in millions)

Total Liabilities and Shareholder's Equity $63,531 $56,548
============================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.

F-3
<PAGE> 258
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED EARNINGS AND
ACCUMULATED OTHER CHANGES IN EQUITY FROM NON-OWNER SOURCES
($ in millions)

See Notes to Consolidated Financial Statements.

F-4
<PAGE> 259
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
($ in millions)

See Notes to Consolidated Financial Statements.

F-5
<PAGE> 260
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies used in the preparation of the accompanying
financial statements follow.

Basis of Presentation

Certain prior year amounts have been reclassified to conform to the 1999
presentation.

ACCOUNTING CHANGES

Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities

F-6
<PAGE> 261
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Accounting by Insurance and Other Enterprises for Insurance - Related
Assessments

ACCOUNTING POLICIES

F-7
<PAGE> 262
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Short-term securities, consisting primarily of money market instruments and
other debt issues purchased with a maturity of less than one year, are
carried at amortized cost which approximates market.

Other invested assets include partnership investments and real estate joint
ventures accounted for on the equity method of accounting. Undistributed
income is reported in net investment income.

Gains and losses arising from financial futures contracts are used to
adjust the basis of hedged investments and are recognized in net investment
income over the life of the investment.

Forward contracts, interest rate options and equity swaps were not
significant at December 31, 1999 and 1998. Information concerning
derivative financial instruments is included in Note 5.

F-8
<PAGE> 263
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

VALUE OF INSURANCE IN FORCE

F-9
<PAGE> 264
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

F-10
<PAGE> 265
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

by the Connecticut insurance commissioner. The Company has not yet
determined the impact that this change will have on the statutory capital
and surplus of its insurance subsidiaries.

FUTURE APPLICATION OF ACCOUNTING STANDARDS

F-11
<PAGE> 266
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

2. COMMERCIAL PAPER AND LINES OF CREDIT

3. REINSURANCE

The Company writes workers' compensation business through its Accident
Department. This business is ceded 100% to an affiliate, The Travelers
Indemnity Company.

F-12
<PAGE> 267
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

A summary of reinsurance financial data reflected within the consolidated
statements of income and balance sheets is presented below ($ in millions):

Reinsurance recoverables at December 31, 1999 and 1998 include amounts
recoverable on unpaid and paid losses and were as follows ($ in millions):

REINSURANCE RECOVERABLES 1999 1998
------------------------------------------------------------------------------------------------------

F-13
<PAGE> 268
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

4. SHAREHOLDER'S EQUITY

Shareholder's Equity and Dividend Availability

The Company's statutory capital and surplus was $5.03 billion and $4.95
billion at December 31, 1999 and 1998, respectively.

F-14
<PAGE> 269
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

4. SHAREHOLDER'S EQUITY (continued)

Accumulated Other Changes in Equity from Non-Owner Sources, Net of Tax

Changes in each component of Accumulated Other Changes in Equity from Non-Owner
Sources were as follows:

F-15
<PAGE> 270
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

5. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

Derivative Financial Instruments

F-16

<PAGE> 271
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The off-balance sheet risks of interest rate options, equity swaps and
forward contracts were not significant at December 31, 1999 and 1998.

The off-balance sheet risk of derivative instruments held for trading
purposes was not significant at December 31, 1999 and 1998.

F-17
<PAGE> 272
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Financial Instruments with Off-Balance Sheet Risk

Fair Value of Certain Financial Instruments

At December 31, 1999 and 1998, investments in fixed maturities had a
carrying value and a fair value of $23.9 billion and $23.9 billion,
respectively. See Notes 1 and 12.

Citigroup Preferred Stock included in other invested assets had a carrying
value and fair value of $987 million at December 31, 1999 and 1998.

The carrying value of policy loans, which have no defined maturities, is
considered to be fair value.

F-18
<PAGE> 273
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

6. COMMITMENTS AND CONTINGENCIES

Financial Instruments with Off-Balance Sheet Risk

See Note 5 for a discussion of financial instruments with off-balance sheet
risk.

Litigation

In March 1997, a purported class action entitled Patterman v. The
Travelers, Inc., et al. was commenced in the Superior Court of Richmond
County, Georgia, alleging, among other things, violations of the Georgia
RICO statute and other state laws by an affiliate of the Company, Primerica
Financial Services, Inc. and certain of its affiliates. Plaintiffs seek
unspecified compensatory and punitive damages and other relief. In October
1997, defendants answered the complaint, denied liability and asserted
numerous affirmative defenses. In February 1998, on defendants' motion, the
Superior Court of Richmond County transferred the lawsuit to the Superior
Court of Gwinnett County, Georgia. Plaintiffs appealed the transfer order,
and in December 1998 the Court of Appeals of the State of Georgia reversed
the lower court's decision. Defendants petitioned the Georgia Supreme Court
to hear an appeal from the decision of the Court of Appeals, and the
petition was granted in May 1998. In September 1999, oral argument on
defendants' petition was heard and, on February 28, 2000, the Georgia
Supreme Court affirmed the Georgia Court of Appeals and remanded the matter
to the Superior Court of Richmond County. In March 2000, defendants moved
the Georgia Supreme Court to reconsider its February 28, 2000 decision, and
that motion remains pending. Proceedings in the trial court have been
stayed pending appeal. Defendants intend to vigorously contest the
litigation.

7. BENEFIT PLANS

Pension and Other Postretirement Benefits

401(k) Savings Plan

F-19
<PAGE> 274
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

8. RELATED PARTY TRANSACTIONS

At December 31, 1999 and 1998 the Company had outstanding loaned securities
to SSB for $123.0 million and $39.7 million, respectively.

Included in other invested assets is a $987 million investment in Citigroup
preferred stock at December 31, 1999 and 1998, carried at cost.

In the ordinary course of business, the Company purchases and sells
securities through affiliated broker-dealers. These transactions are
conducted on an arm's length basis.

F-20
<PAGE> 275
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

In 1998 Primerica became a distributor of products for Travelers Life &
Annuity. Primerica sold $903 million and $256 million of deferred annuities
in 1999 and 1998, respectively.

Had the Company applied FAS 123 in accounting for Citigroup stock options,
net income would have been the pro forma amounts indicated below:

F-21
<PAGE> 276
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

9. LEASES

The Company is reimbursed for use of furniture and equipment through cost
sharing agreements by its affiliates.

F-22
<PAGE> 277
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
10. FEDERAL INCOME TAXES

EFFECTIVE TAX RATE

Additional tax benefits attributable to employee stock plans allocated
directly to shareholder's equity were $17 million for each of the years
ended December 31, 1999, 1998 and 1997.

F-23
<PAGE> 278
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The net deferred tax liabilities at December 31, 1999 and 1998 were
comprised of the tax effects of temporary differences related to the
following assets and liabilities:

At December 31, 1999, the Company had no ordinary or capital loss
carryforwards.

F-24
<PAGE> 279
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

11. NET INVESTMENT INCOME

12. INVESTMENTS AND INVESTMENT GAINS (LOSSES)

Realized investment gains (losses) for the periods were as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions) ---- ---- ----
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REALIZED INVESTMENT GAINS
Fixed maturities $(23) $111 $ 71
Equity securities 7 6 (9)
Mortgage loans 29 21 59
Real estate held for sale 108 16 67
Other (8) (5) 11
------------------------------------------------------------------------------------------------------
Total Realized Investment Gains $113 $149 $199
------------------------------------------------------------------------------------------------------
</TABLE>

F-25
<PAGE> 280
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

F-26
<PAGE> 281
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Fixed Maturities

The amortized cost and fair value of investments in fixed maturities were
as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
GROSS GROSS
DECEMBER 31, 1998 AMORTIZED UNREALIZED UNREALIZED FAIR
($ in millions) COST GAINS LOSSES VALUE
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE:
Mortgage-backed securities - CMOs and
pass-through securities $ 4,717 $ 147 $ 11 $ 4,853
U.S. Treasury securities and obligations of
U.S. Government and government agencies and
authorities 1,563 186 3 1,746
Obligations of states, municipalities and
political subdivisions 239 18 -- 257
Debt securities issued by foreign governments 634 41 3 672
All other corporate bonds 13,025 532 57 13,500
Other debt securities 2,709 106 38 2,777
Redeemable preferred stock 86 3 1 88
------------------------------------------------------------------------------------------------------------------
Total Available For Sale $22,973 $ 1,033 $ 113 $23,893
------------------------------------------------------------------------------------------------------------------
</TABLE>

F-27
<PAGE> 282
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

F-28
<PAGE> 283
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Equity Securities

The cost and fair values of investments in equity securities were as
follows:

Mortgage Loans and Real Estate Held For Sale

At December 31, 1999 and 1998, the Company's mortgage loan and real estate
held for sale portfolios consisted of the following:

Underperforming mortgage loans include delinquent mortgage loans, loans in
the process of foreclosure, foreclosed loans and loans modified at interest
rates below market.

F-29
<PAGE> 284
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Aggregate annual maturities on mortgage loans at December 31, 1999 are as
follows:

Trading Securities

Trading securities of the Company are held in Tribeca.

F-30

<PAGE> 285
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Concentrations

At December 31, 1999 and 1998, the Company had an investment in Citigroup
Preferred Stock of $987 million. See Note 8.

The Company maintains a short-term investment pool for its insurance
affiliates in which the Company also participates. See Note 8.

The Company had concentrations of investments, primarily fixed maturities,
in the following industries:

F-31
<PAGE> 286
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Non-Income Producing Investments

Investments included in the consolidated balance sheets that were
non-income producing for the preceding 12 months were insignificant.

Restructured Investments

13. DEPOSIT FUNDS AND RESERVES

F-32
<PAGE> 287
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

14. RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES

The following table reconciles net income to net cash provided by operating
activities:

---------------------------------------------------------------------------------------------------------------------
</TABLE>

15. NON-CASH INVESTING AND FINANCING ACTIVITIES

F-33
<PAGE> 288
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

16. OPERATING SEGMENTS

BUSINESS SEGMENT INFORMATION:

F-34
<PAGE> 289
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
TRAVELERS LIFE & PRIMERICA LIFE
1998 ($ in millions) ANNUITY INSURANCE TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Business Volume:
Premiums $ 683 $1,057 $ 1,740
Deposits 7,693 -- 7,693
------- ------ -------
Total business volume $ 8,376 $1,057 $ 9,433
Net investment income 1,965 220 2,185
Interest credited to contractholders 876 -- 876
Amortization of deferred acquisition costs 88 187 275
Federal income taxes on Operating Income 260 170 430
Operating Income (excludes realized gains or
losses and the related FIT) $ 493 $ 312 $ 805
Segment Assets $49,646 $6,902 $56,548
-----------------------------------------------------------------------------------------------------------------
</TABLE>

F-35
<PAGE> 290
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

(a) Other represents revenue attributable to unallocated capital and run-off
businesses.

The Company's revenue was derived almost entirely from U.S. domestic
business. Revenue attributable to foreign countries was insignificant.

The Company had no transactions with a single customer representing 10% or
more of its revenue.

F-36
<PAGE> 291

STATEMENT OF ADDITIONAL INFORMATION

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

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

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

INDIVIDUAL VARIABLE ANNUITY CONTRACTS ISSUED BY
THE TRAVELERS INSURANCE COMPANY

MAY 1,2000

TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
<S> <C>
Description Of The Travelers And The Separate Accounts.................................................................. 2
The Insurance Company....................................................................................... 2
The Separate Accounts....................................................................................... 2
Investment Objectives And Policies...................................................................................... 2
The Travelers Growth And Income Stock Account For Variable Annuities.................................................... 3
The Travelers Quality Bond Account For Variable Annuities............................................................... 4
Description Of Certain Types Of Investments And Investment
Techniques Available To The Separate Accounts........................................................................... 6

Writing Covered Call Options................................................................................ 6
Buying Put And Call Options................................................................................. 7
Futures Contracts........................................................................................... 8
Money Market Instruments....................................................................................10
Investment Management And Advisory Services.............................................................................12
Advisory and Subadvisory Fees...............................................................................13
TAMIC...................................................................................................................13
TIMCO...................................................................................................................14

Valuation Of Assets.....................................................................................................16

The Board Of Managers...................................................................................................16

Administrative Services.................................................................................................18

Securities Custodian....................................................................................................19

Independent Accountants.................................................................................................19

Financial Statements....................................................................................................F-1
</TABLE>

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<PAGE> 292

DESCRIPTION OF THE TRAVELERS AND THE SEPARATE ACCOUNTS

THE INSURANCE COMPANY

The Travelers Insurance Company (the "Company") is a stock insurance company
chartered in 1864 in Connecticut and continuously engaged in the insurance
business since that time. It is licensed to conduct a life insurance business in
all states of the United States, the District of Columbia, Puerto Rico, Guam,
the Virgin Islands, Canada and the Bahamas. The Company is an indirect wholly
owned subsidiary of Citigroup Inc., a financial services holding company. The
Company's Home Office is located at One Tower Square, Hartford, Connecticut
06183.

THE SEPARATE ACCOUNTS

Each of the Separate Accounts which serve as the funding vehicles for the
Variable Annuity contracts described in this SAI meets the definition of a
separate account under the federal securities laws, and will comply with the
provisions of the Investment Company Act of 1940, as amended (the "1940 Act").
Additionally, the operations of each of the Separate Accounts are subject to the
provisions of Section 38a-433 of the Connecticut General Statutes which
authorizes the Connecticut Insurance Commissioner to adopt regulations under it.
The Section contains no restrictions on investments of the Separate Accounts,
and the Commissioner has adopted no regulations under the Section that affect
the Separate Accounts.

The Travelers Growth and Income Stock Account for Variable Annuities (Account
GIS) was established on September 22, 1967, and The Travelers Quality Bond
Account for Variable Annuities (Account QB) was established on July 29, 1974.
Each of the Separate Accounts, although an integral part of the Company, is
registered with the Securities and Exchange Commission ("SEC") as a diversified,
open-end management investment company under the 1940 Act. The assets of
Accounts GIS and QB are invested directly in securities (such as stocks, bonds
or money market instruments) which are compatible with the stated investment
policies of each account.

ACCOUNT GIS: The primary objective of Account GIS is long-term
accumulation of principal through capital appreciation and
retention of net investment income. The assets of Account GIS will
normally be invested in a portfolio of common stocks spread over
industries and companies.

ACCOUNT QB: The primary objective of Account QB is current income, moderate
capital volatility and total return. Assets of Account QB will be
invested in short-term to intermediate-term bonds or other debt
securities with a market value-weighted average maturity of five
years or less.

INVESTMENT OBJECTIVES AND POLICIES

2
<PAGE> 293

violation. It must be recognized that there are risks inherent in the ownership
of any investment and that there can be no assurance that the investment
objectives of the Separate Accounts will be achieved.

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES

INVESTMENT OBJECTIVE

INVESTMENT RESTRICTIONS

1. Not more than 5% of the assets of the Account will be invested in the
securities of any one issuer, except obligations of the United States
Government and its instrumentalities.

2. Borrowings will not be made, except that the right is reserved to borrow
from banks for emergency purposes, provided that such borrowings will not
exceed 5% of the value of the assets of the Account and that immediately
after the borrowing, and at all times thereafter, and while any such
borrowing is unrepaid, there will be asset coverage of at least 300% for
all borrowings of the Account.

3. Securities of other issuers will not be underwritten, except that the
Account could be deemed an underwriter when engaged in the sale of
restricted securities. (See item 13.)

4. Interests in real estate will not be purchased, except as may be
represented by securities for which there is an established market.

5. No purchase of commodities or commodity contracts will be made, except
transactions involving financial futures in order to limit transaction and
borrowing costs and for hedging purposes, as discussed above.

6. Loans will be made only through the acquisition of a portion of privately
placed issue of bonds, debentures or other evidences of indebtedness of a
type customarily purchased by institutional investors. (See item 13.)

3
<PAGE> 294

7. Investments will not be made in the securities of a company for the purpose
of exercising management or control.

8. Not more than 10% of the voting securities of any one issuer will be
acquired. (It is the present practice of Account GIS not to exceed 5% of
the voting securities of any one issuer.)

9. Senior securities will not be issued.

10. Short sales of securities will not be made.

11. Purchases will not be made on margin, except for short-term credits which
are necessary for the clearance of transactions, and for the placement of
not more than 5% of its net asset value in total margin deposits for
positions in futures contracts.

12. The Account will not invest in the securities of other investment
companies, except as part of a plan of merger, consolidation or acquisition
of assets.

13. Not more than 5% of the value of the assets of the Account may be invested
in restricted securities (securities which may not be publicly offered
without registration under the Securities Act of 1933).

PORTFOLIO TURNOVER

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

INVESTMENT OBJECTIVE

4
<PAGE> 295

five years. (In the case of mortgage-backed securities, the estimated average
life of cash flows will be used instead of average maturity.) Investments in
longer term obligations may be made if the Board of Managers concludes that the
investment yields justify a longer term commitment.

The portfolio will be actively managed and Account QB may sell investments prior
to maturity to the extent that this action is considered advantageous in light
of factors such as market conditions or brokerage costs. While the investments
of Account QB are generally not listed securities, there are firms which make
markets in the type of debt instruments which Account QB holds. No problems of
salability are anticipated with regard to the investments of Account QB.

INVESTMENT RESTRICTIONS

The investment restrictions set forth in items 1 through 9 below are fundamental
and may not be changed without a vote of a majority of the outstanding voting
securities of Account QB, as defined in the 1940 Act. Items 10 through 13 may be
changed by a vote of the Board of Managers of Account QB.

2. Borrowings will not be made, except that the right is reserved to
borrow from banks for emergency purposes, provided that these
borrowings will not exceed 5% of the value of the assets of Account QB
and that immediately after the borrowing, and at all times thereafter,
and while any borrowing is unrepaid, there will be asset coverage of
at least 300% for all borrowings of Account QB.

3. Securities of other issuers will not be underwritten, except that
Account QB could be deemed to be an underwriter when engaged in the
sale of restricted securities.

4. Interests in real estate will not be purchased, except as may be
represented by securities for which there is an established market.

5. No purchase of commodities or commodity contracts will be made, except
transactions involving financial futures used as a hedge against
unanticipated changes in prevailing levels of interest rates.

7. Investments will not be made in the securities of a company for the
purpose of exercising management or control.

8. Not more than 10% of the voting securities of any one issuer will be
acquired.

9. Senior securities will not be issued.

10. Short sales of securities will not be made.

5
<PAGE> 296
11. Purchases will not be made on margin, except for any short-term
credits that are necessary for the clearance of transactions and to
place up to 5% of the value of its net assets in total margin deposits
for positions in futures contracts.

12. Account QB will not invest in the securities of other investment
companies, except as part of a plan of merger, consolidation or
acquisition of assets.

PORTFOLIO TURNOVER

Brokerage costs associated with short-term debt instruments are significantly
lower than those incurred on equity investments, and thus, a high portfolio
turnover rate would not adversely affect the brokerage costs of Account QB to
the same extent as high turnover in a separate account which invests primarily
in common stock. The portfolio turnover rate for Account QB for the years ended
December 31, 1997, 1998 and 1999 was 196%, 438% and 340%, respectively.

DESCRIPTION OF CERTAIN TYPES OF INVESTMENTS AND INVESTMENT TECHNIQUES
AVAILABLE TO THE SEPARATE ACCOUNTS

WRITING COVERED CALL OPTIONS

6
<PAGE> 297

A previously written call option can be closed out by purchasing an identical
call option only on a national securities exchange which provides a secondary
market in the call option. There is no assurance that a liquid secondary market
will exist for a particular call option at such time. If Account GIS cannot
effect a closing transaction, it will not be able to sell the underlying
security while the previously written option remains outstanding, even though it
might otherwise be advantageous to do so.

BUYING PUT AND CALL OPTIONS

7
<PAGE> 298

FUTURES CONTRACTS

STOCK INDEX FUTURES

Account GIS will invest in stock index futures. A stock index futures contract
provides for one party to take and the other to make delivery of an amount of
cash over the hedging period equal to specified amount times the difference
between a stock index value at the close of the last trading day of the contract
or the selling price and the price at which the futures contract is originally
struck. The stock index assigns relative values to the common stocks included in
the index and reflects overall price trends in the designated market for equity
securities. Therefore, price changes in a stock index futures contract reflect
changes in the specified index of equity securities on which the futures
contract is based. Stock index futures may also be used, to a limited extent, to
hedge specific common stocks with respect to market (systematic) risk (involving
the market's assessment of overall economic prospects) as distinguished from
stock-specific risk (involving the market's evaluation of the merits of the
issuer of a particular security). By establishing an appropriate "short"
position in stock index futures, Account GIS may seek to protect the value of
its equity securities against an overall decline in the market for equity
securities. Alternatively, in anticipation of a generally rising market, Account
GIS can seek to avoid losing the benefit of apparently low current prices by
establishing a "long" position in stock index futures and later liquidating that
position as particular equity securities are in fact acquired. Account GIS will
not be a hedging fund; however, to the extent that any hedging strategies
actually employed are successful, Account GIS will be affected to a lesser
degree by adverse overall market price movements unrelated to the merits of
specific portfolio equity securities than would otherwise be the case. Gains and
losses on futures contracts employed as hedges for specific securities will
normally be offset by losses or gains, respectively, on the hedged security.

INTEREST RATE FUTURES

8
<PAGE> 299

FUTURES MARKETS AND REGULATIONS

SPECIAL RISKS

9
<PAGE> 300

movements in the underlying security due to certain market distortions. First,
rather than meeting variation margin deposit requirements should a futures
contract value move adversely, investors may close futures contracts through
offsetting transactions which could distort the normal relationship between the
index and futures markets. Second, since margin requirements in the futures
market are less onerous than in the securities market, the futures market may
attract more speculators than the securities market. Increased participation by
speculators may cause temporary price distortions. Due to the possibility of
such price distortion, and also because of the imperfect correlation discussed
above, even a correct forecast of general market trends by the investment
advisers may not result in a successful hedging transaction in the futures
market over a short time period. However, as is noted above, the use of
financial futures by the Accounts is intended primarily to limit transaction and
borrowing costs. At no time will the Accounts use financial futures for
speculative purposes.

MONEY MARKET INSTRUMENTS

CERTIFICATES OF DEPOSITS

BANKERS' ACCEPTANCES

COMMERCIAL PAPER RATINGS

10
<PAGE> 301

Investments in commercial paper are limited to those rated A-1 by Standard &
Poor's Corporation and Prime-1 by Moody's Investors Service, Inc. Commercial
paper rated A-1 by S&P has the following characteristics: (1) liquidity ratios
are adequate to meet cash requirements; (2) the issuer's long-term senior debt
is rated "A" or better, although in some cases "BBB" credits may be allowed; (3)
the issuer has access to at least two additional channels of borrowing; (4)
basic earnings and cash flow have an upward trend with allowances made for
unusual circumstances; and (5) the issuer's industry is typically well
established and the issuer has a strong position within the industry.

MASTER DEMAND NOTES

Master demand notes are unsecured obligations that permit the investment of
fluctuating amounts at varying rates of interest pursuant to direct arrangements
between the lender (issuer) and the borrower. Master demand notes may permit
daily fluctuations in the interest rate and daily changes in the amounts
borrowed. An Account has the right to increase the amount under the note at any
time up to the full amount provided by the note agreement, or to decrease the
amount, and the borrower may repay up to the full amount of the note without
penalty. Notes purchased by a separate account must permit it to demand payment
of principal and accrued interest at any time (on not more than seven days
notice) or to resell the note at any time to a third party. Master demand notes
may have maturities of more than one year, provided they specify that (i) the
account be entitled to payment of principal and accrued interest upon not more
than seven days notice, and (ii) the rate of interest on such notes be adjusted
automatically at periodic intervals which normally will not exceed 31 days, but
which may extend up to one year. Because these types of notes are direct lending
arrangements between the lender and the borrower, such instruments are not
normally traded, and there is no secondary market for these notes, although they
are redeemable and thus repayable by the borrower at face value plus accrued
interest at any time. Accordingly, the right to redeem is dependent upon the
ability of the borrower to pay principal and interest on demand. In connection
with master demand note arrangements, the investment adviser considers earning
power, cash flow, and other liquidity ratios of the borrower to pay principal
and interest on demand. These notes, as such, are not typically rated by credit
rating agencies. Unless they are so rated, a separate account may invest in them
only if at the time of an investment the issuer meets the criteria set forth
above for commercial paper. The notes will be deemed to have a maturity equal to
the longer of the period remaining to the next interest rate adjustment or the
demand notice period.

UNITED STATES GOVERNMENT SECURITIES

11
<PAGE> 302

United States; others, such as securities of Federal Home Loan Banks, are
supported by the right of the issuer to borrow from the Treasury; still others,
such as bonds issued by the Federal National Mortgage Association, a private
corporation, are supported only by the credit of the instrumentality. Because
the United States Government is not obligated by law to provide support to an
instrumentality it sponsors, the Accounts will invest in the securities issued
by such an instrumentality only when the investment advisers determine that the
credit risk with respect to the instrumentality does not make the securities
unsuitable investments. United States Government securities will not include
international agencies or instrumentalities in which the United States
Government, its agencies or instrumentalities participate, such as the World
Bank, the Asian Development Bank or the Inter-American Development Bank, or
issues insured by the Federal Deposit Insurance Corporation.

REPURCHASE AGREEMENTS

In executing a repurchase agreement, a portfolio purchases eligible securities
subject to the seller's simultaneous agreement to repurchase them on a mutually
agreed upon date and at a mutually agreed upon price. The purchase and resale
prices are negotiated with the counterparty on the basis of current short-term
interest rates, which may be more or less than the rate on the securities
collateralizing the transaction. Physical delivery or, in the case of
"book-entry" securities, segregation in the counterparty's account at the
Federal Reserve for the benefit of the Portfolio is required to establish a
perfected claim to the collateral for the term of the agreement in the event the
counterparty fails to fulfill its obligation.

As the securities collateralizing a repurchase transaction are generally of
longer maturity than the term of the transaction, in the event of default by the
counterparty on its obligation, the Portfolio would bear the risks of delay,
adverse market fluctuation and transaction costs in disposing of the collateral.

INVESTMENT MANAGEMENT AND ADVISORY SERVICES

The investments and administration of the separate accounts are under the
direction of the Board of Managers. Subject to the authority of the Board of
Managers, Travelers Asset Management International Company LLC ("TAMIC")
furnishes investment management and advisory services to Account QB and GIS,
according to the terms of written Investment Advisory Agreements. The agreement
effective May 1, 1998 between Account GIS and TAMIC was approved by a vote of
the Variable Annuity Contract Owners at their meeting held on April 27, 1998.
The agreement between Account QB and TAMIC was approved by a vote of the
Variable Annuity Contract Owners at their meeting held on April 23, 1993.

Each of these agreements will continue in effect as described below in (3), as
required by the 1940 Act. Each of the agreements:

1. provides that for investment management and advisory services, the
Company will pay to TAMIC, an advisory fee based on the current value
of the assets of the accounts for which TAMIC acts as investment
adviser (see "Advisory and Subadvisory Fees" below);

2. may not be terminated by TAMIC without prior approval of a new
investment advisory agreement by those casting a majority of the votes
entitled to be cast and will be subject to termination without the
payment of any penalty, upon sixty days' written notice, by the Board
of Managers or by a vote of those casting a majority of the votes
entitled to be cast;

12
<PAGE> 303
3. will continue in effect for a period more than two years from the date
of its execution, only so long as its continuance is specifically
approved at least annually by a vote of a majority of the Board of
Managers, or by a vote of a majority of the outstanding voting
securities of the Account. In addition, and in either event, the terms
of the agreement must be approved annually by a vote of a majority of
the Board of Managers who are not parties to, or interested persons of
any party to, the agreement, cast in person, at a meeting called for
the purpose of voting on the approval and at which the Board of
Managers has been furnished the information that is reasonably
necessary to evaluate the terms of the agreement;

4. will automatically terminate upon assignment.

ADVISORY AND SUBADVISORY FEES

For furnishing investment management and advisory services to Account GIS, under
a management agreement effective May 1, 1998, TAMIC is paid an amount
equivalent, on an annual basis, to a maximum of 0.65% of the average daily net
assets of Account GIS, grading down to 0.40%.. The fee is computed daily and
paid monthly. Prior to May 1, 1998, TIMCO was the investment advisor, and the
fee was 0.45%. The total advisory fees paid to TIMCO by Account GIS for the
fiscal year ended December 31, 1997 was $2,723,508 and for the period January 1,
1998 to April 30, 1998 was $1,094,293. The subadvisory fees paid to TIMCO by
TAMIC for the period May 1, 1998 to December 31, 1998 was $2,291,392 and for the
year ended December 31, 1999 was $3,895,005 The total advisory fee paid to TAMIC
for the period May 1, 1998 to December 31, 1998 was $3,274,491 and for the year
ended Decmber 31, 1999 was $5,840,016.

TAMIC

TAMIC, an indirect wholly owned subsidiary of Citigroup Inc., is located at One
Tower Square, Hartford, Connecticut 06183. In addition to providing investment
management and advisory services to Account GIS, TAMIC acts as investment
adviser for investment companies which serve as the funding media for certain
variable annuity and variable life insurance contracts offered by The Travelers
Insurance Company and its affiliates. TAMIC also acts as investment adviser for
individual and pooled pension and profit-sharing accounts, for offshore
insurance companies affiliated with The Travelers Insurance Company, and for
non-affiliated insurance companies, both domestic and offshore.

Investment advice and management for TAMIC's clients are furnished in accordance
with their respective investment objectives and policies and investment
decisions for the Accounts will be made independently from those of any other
accounts managed by TAMIC. However, securities owned by Account QB may also be
owned by other clients and it may occasionally develop that the same investment
advice and decision for more than one client is made at the same time.
Furthermore, it may develop that a particular security is bought or sold for
only some clients even though it might be held or bought or sold for other
clients, or that a particular security is bought for some clients when other
clients are selling the security. When two or more accounts are engaged in the
purchase or sale of the same security, the transactions are allocated as to
amount in accordance with a formula which is equitable to each account. It is
recognized that in some cases this system could have a detrimental effect on the
price or volume of the security as far as Account QB is concerned. In other
cases, however, it is believed that the ability of Account QB to participate in
volume transactions will produce better executions for the account.

13
<PAGE> 304

BROKERAGE

Purchases and sales of bonds and money market instruments will usually be
principal transactions and will normally be purchased directly from the issuer
or from the underwriter or market maker for the securities. There usually will
be no brokerage commissions paid for such purchases. Purchases from the
underwriters will include the underwriting commission or concession, and
purchases from dealers serving as market makers will include the spread between
the bid and asked prices. Where transactions are made in the over-the-counter
market, Account QB will deal with primary market makers unless more favorable
prices are otherwise obtainable. Brokerage fees will be incurred in connection
with futures transactions, and Account QB will be required to deposit and
maintain funds with brokers as margin to guarantee performance of future
obligations.

The policy of TAMIC with respect to brokerage is and will be reviewed by the
Board of Managers periodically. Because of the possibility of further regulatory
developments affecting the securities exchanges and brokerage practices
generally, the foregoing practices may be changed, modified or eliminated.

TIMCO

14
<PAGE> 305

manner TIMCO deems to be fair. In some cases, this system might adversely affect
the price or volume of securities being bought or sold by an account, while in
other cases it may produce better executions or lower brokerage rates.

BROKERAGE

Transactions in the over-the-counter market are placed with the principal market
makers unless better price and execution may be obtained otherwise. Brokerage
fees will be incurred in connection with futures transactions, and Account GIS
will be required to deposit and maintain funds with brokers as margin to
guarantee performance of future obligations.

VALUATION OF ASSETS

15
<PAGE> 306

the value of the security is taken to be the mean between the reported bid and
asked prices on the Valuation Date or on the basis of quotations received from a
reputable broker or any other recognized source.

Short-term investments for which a quoted market price is available are valued
at market. Short-term investments maturing in more than sixty days for which
there is no reliable quoted market price are valued by "marking to market"
(computing a market value based upon quotations from dealers or issuers for
securities of a similar type, quality and maturity). "Marking to market" takes
into account unrealized appreciation or depreciation due to changes in interest
rates or other factors which would influence the current fair values of such
securities. Short-term investments maturing in sixty days or less for which
there is no reliable quoted market are valued at amortized cost which
approximates market.

THE BOARD OF MANAGERS

The investment and administration of each of the Separate Accounts are under the
direction of the Board of Managers, listed below. Members of the Board of
Managers are elected annually by those Contract Owners participating in the
Separate Accounts. A majority of the members of the Board of Managers are
persons who are not affiliated with The Travelers Insurance Company, TIMCO,
TAMIC or their affiliates.

<TABLE>
<CAPTION>
Name and Position
With the Fund Principal Occupation During Last Five Years
- ----------------- -------------------------------------------
<S> <C>
*Heath B. McLendon Managing Director (1993-present), Salomon Smith Barney, Inc. ("Salomon Smith
Chairman and Trustee Barney"); President and Director (1994-present), SSB Citi Fund Management LLC;
7 World Trade Center (successor to SSBC Fund Management Inc.); Director and President
New York, NY (1996-present), Travelers Investment Adviser, Inc.; Chairman and Director of
Age 66 sixty investment companies associated with Salomon Smith Barney; Trustee (1999)
of 6 Trusts of Citifunds' family of Trusts; Trustee, Drew University; Advisory
Director, M&T Bank; Chairman, Board of Managers, seven Variable Annuity
Separate Accounts of The Travelers Insurance Company+; Chairman, Board of
Trustees, five Mutual Funds sponsored by The Travelers Insurance Company++;
prior to July 1993, Senior Executive Vice President of Shearson Lehman Brothers
Inc.
</TABLE>
16

<PAGE> 307

<TABLE>
<S> <C>
Knight Edwards Of Counsel (1988-present), Partner (1956-1988), Edwards & Angell, Attorneys;
Trustee Member, Advisory Board (1973-1994), thirty-one mutual funds sponsored by
154 Arlington Avenue Keystone Group, Inc.; Member, Board of Managers, seven Variable Annuity
Providence, RI Separate Accounts of The Travelers Insurance Company+; Trustee, five Mutual
Age 76 Funds sponsored by The Travelers Insurance Company.++

Robert E. McGill, III Retired manufacturing executive. Director (1983-1995), Executive Vice President
Trustee (1989-1994) and Senior Vice President, Finance and Administration (1983-1989),
295 Hancock Street The Dexter Corporation (manufacturer of specialty chemicals and materials);
Williamstown, MA Vice Chairman (1990-1992), Director (1983-1995), Life Technologies, Inc. (life
Trustee, science/biotechnology products); Director, (1994-1999), The Connecticut Surety
Age 68 Corporation (insurance); Director (1995-present), Chemfab Corporation
(specialty materials manufacturer); Director (1999-present), Ravenwood Winery,
Inc.; Director (1999-present), Lydall Inc. (manufacturer of fiber materials);
Member, Board of Managers, seven Variable Annuity Separate Accounts of The
Travelers Insurance Company+; five Mutual Funds sponsored by The Travelers
Insurance Company.++

Frances M. Hawk, Private Investor, (1997-present); Portfolio Manager (1992-1997, HLM Management
CFA, CFP Company, Inc. (investment management); Assistant Treasurer, Pensions and
Trustee Benefits. Management (1989-1992), United Technologies Corporation (broad-based
28 Woodland Street designer and manufacturer of high technology products); Member, Board of
Sherborn, MA Managers, seven Variable Annuity Separate Accounts of The Travelers Insurance
Age 52 Company+; Trustee, five Mutual Funds sponsored by The Travelers Insurance
Company.++

<PAGE> 308

<TABLE>
<S> <C>
David Golino Vice President (1999-present); Second Vice President (1996-1999), The Travelers
Principal Accounting Insurance Company; Principal Accounting Officer, seven Variable Annuity
Officer Separate Accounts of The Travelers Insurance Company.++ Prior to May 1996,
One Tower Square Senior Manager, Deloitte & Touche LLP.
Hartford, Connecticut
Age 38
</TABLE>

++ These five Mutual Funds are: Capital Appreciation Fund, Money Market
Portfolio, High Yield Bond Trust, Managed Assets Trust and The Travelers
Series Trust.

* Mr. McLendon is an "interested person" within the meaning of the 1940 Act
by virtue of his position as Managing Director of Salomon Smith Barney Inc., an
indirect wholly owned subsidiary of Citigroup Inc. and also owns shares and
options to purchase shares of Citigroup Inc., the indirect parent of The
Travelers Insurance Company.

The Company is responsible for payment of the fees and expenses of the Board of
Managers, and the expenses of audit of the Separate Accounts, as well as other
expenses for services related to the operations of the accounts, for which it
deducts certain amounts from purchase payments and from the accounts.

Members of the Board of Managers who are also officers or employees of Citigroup
Inc. or its subsidiaries are not entitled to any fee. Members of the Board of
Managers who are not affiliated as employees of Citigroup Inc. or its
subsidiaries receive an aggregate retainer of $19,000 for service on the Boards
of the seven Variable Annuity Separate Accounts established by The Travelers
Insurance Company and the five Mutual Funds sponsored by The Travelers Insurance
Company. They also receive an aggregate fee of $2,500 for each meeting of such
Boards attended. Board members with 10 years of service may agree to provide
services as emeritus director at age 72 or upon reaching 80 years of age and
will receive 50% of the annual retainer and 50% of meeting fees if attended.

ADMINISTRATIVE SERVICES

18
<PAGE> 309

The Company received the following amounts from the Separate Accounts in each of
the last three fiscal years for services provided under the Administrative
Services Agreement and Agreement to provide Guarantees:

<TABLE>
<CAPTION>
SEPARATE ACCOUNT 1999 1998 1997
---- ---- ----
<S> <C> <C> <C>
GIS $12,365,601 $9,908,196 $7,623,733
QB $ 1,998,726 $2,069,452 $2,144,373
</TABLE>

The Company received the following amounts from the Separate Accounts in each of
the last three fiscal years for services provided under the Distribution and
Management Agreements:

SECURITIES CUSTODIAN

Chase Manhattan Bank, N.A., Chase MetroTech Center, Brooklyn, New York, is the
custodian of the portfolio securities and similar investments of Accounts GIS
and QB.

INDEPENDENT ACCOUNTANTS

Financial statements as of and for the year ended December 31, 1999 of Accounts
GIS, QB, MM, TGIS, TSB, and TAS, included in the Annual Reports (for each)
incorporated by reference in this SAI, have been incorporated herein in
reliance on the reports of KPMG LLP, independent accountants, given on the
authority of that firm as experts in accounting and auditing. These financial
statements include prior period amounts which were audited by other independent
accountants.

19
<PAGE> 310

THIS PAGE INTENTIONALLY LEFT BLANK.

<PAGE> 311
INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholder
The Travelers Insurance Company and Subsidiaries:

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 are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

/s/ KPMG LLP
Hartford, Connecticut
January 18, 2000

F-1
<PAGE> 312
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
($ in millions)

FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
---- ---- ----

See Notes to Consolidated Financial Statements.

F-2
<PAGE> 313
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
($ in millions)

Total Liabilities and Shareholder's Equity $63,531 $56,548
============================================================================================================================
</TABLE>

See Notes to Consolidated Financial Statements.

F-3
<PAGE> 314
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN RETAINED EARNINGS AND
ACCUMULATED OTHER CHANGES IN EQUITY FROM NON-OWNER SOURCES
($ in millions)

See Notes to Consolidated Financial Statements.

F-4
<PAGE> 315
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
($ in millions)

See Notes to Consolidated Financial Statements.

F-5
<PAGE> 316
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Significant accounting policies used in the preparation of the accompanying
financial statements follow.

Basis of Presentation

Certain prior year amounts have been reclassified to conform to the 1999
presentation.

ACCOUNTING CHANGES

Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities

F-6
<PAGE> 317
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Accounting by Insurance and Other Enterprises for Insurance - Related
Assessments

ACCOUNTING POLICIES

F-7
<PAGE> 318
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Short-term securities, consisting primarily of money market instruments and
other debt issues purchased with a maturity of less than one year, are
carried at amortized cost which approximates market.

Other invested assets include partnership investments and real estate joint
ventures accounted for on the equity method of accounting. Undistributed
income is reported in net investment income.

Gains and losses arising from financial futures contracts are used to
adjust the basis of hedged investments and are recognized in net investment
income over the life of the investment.

Forward contracts, interest rate options and equity swaps were not
significant at December 31, 1999 and 1998. Information concerning
derivative financial instruments is included in Note 5.

F-8
<PAGE> 319
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

VALUE OF INSURANCE IN FORCE

F-9
<PAGE> 320
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

F-10
<PAGE> 321
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

by the Connecticut insurance commissioner. The Company has not yet
determined the impact that this change will have on the statutory capital
and surplus of its insurance subsidiaries.

FUTURE APPLICATION OF ACCOUNTING STANDARDS

F-11
<PAGE> 322
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

2. COMMERCIAL PAPER AND LINES OF CREDIT

3. REINSURANCE

The Company writes workers' compensation business through its Accident
Department. This business is ceded 100% to an affiliate, The Travelers
Indemnity Company.

F-12
<PAGE> 323
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

A summary of reinsurance financial data reflected within the consolidated
statements of income and balance sheets is presented below ($ in millions):

Reinsurance recoverables at December 31, 1999 and 1998 include amounts
recoverable on unpaid and paid losses and were as follows ($ in millions):

REINSURANCE RECOVERABLES 1999 1998
------------------------------------------------------------------------------------------------------

F-13
<PAGE> 324
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

4. SHAREHOLDER'S EQUITY

Shareholder's Equity and Dividend Availability

The Company's statutory capital and surplus was $5.03 billion and $4.95
billion at December 31, 1999 and 1998, respectively.

F-14
<PAGE> 325
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

4. SHAREHOLDER'S EQUITY (continued)

Accumulated Other Changes in Equity from Non-Owner Sources, Net of Tax

Changes in each component of Accumulated Other Changes in Equity from Non-Owner
Sources were as follows:

F-15
<PAGE> 326
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

5. DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS

Derivative Financial Instruments

F-16

<PAGE> 327
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The off-balance sheet risks of interest rate options, equity swaps and
forward contracts were not significant at December 31, 1999 and 1998.

The off-balance sheet risk of derivative instruments held for trading
purposes was not significant at December 31, 1999 and 1998.

F-17
<PAGE> 328
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Financial Instruments with Off-Balance Sheet Risk

Fair Value of Certain Financial Instruments

At December 31, 1999 and 1998, investments in fixed maturities had a
carrying value and a fair value of $23.9 billion and $23.9 billion,
respectively. See Notes 1 and 12.

Citigroup Preferred Stock included in other invested assets had a carrying
value and fair value of $987 million at December 31, 1999 and 1998.

The carrying value of policy loans, which have no defined maturities, is
considered to be fair value.

F-18
<PAGE> 329
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

6. COMMITMENTS AND CONTINGENCIES

Financial Instruments with Off-Balance Sheet Risk

See Note 5 for a discussion of financial instruments with off-balance sheet
risk.

Litigation

In March 1997, a purported class action entitled Patterman v. The
Travelers, Inc., et al. was commenced in the Superior Court of Richmond
County, Georgia, alleging, among other things, violations of the Georgia
RICO statute and other state laws by an affiliate of the Company, Primerica
Financial Services, Inc. and certain of its affiliates. Plaintiffs seek
unspecified compensatory and punitive damages and other relief. In October
1997, defendants answered the complaint, denied liability and asserted
numerous affirmative defenses. In February 1998, on defendants' motion, the
Superior Court of Richmond County transferred the lawsuit to the Superior
Court of Gwinnett County, Georgia. Plaintiffs appealed the transfer order,
and in December 1998 the Court of Appeals of the State of Georgia reversed
the lower court's decision. Defendants petitioned the Georgia Supreme Court
to hear an appeal from the decision of the Court of Appeals, and the
petition was granted in May 1998. In September 1999, oral argument on
defendants' petition was heard and, on February 28, 2000, the Georgia
Supreme Court affirmed the Georgia Court of Appeals and remanded the matter
to the Superior Court of Richmond County. In March 2000, defendants moved
the Georgia Supreme Court to reconsider its February 28, 2000 decision, and
that motion remains pending. Proceedings in the trial court have been
stayed pending appeal. Defendants intend to vigorously contest the
litigation.

7. BENEFIT PLANS

Pension and Other Postretirement Benefits

401(k) Savings Plan

F-19
<PAGE> 330
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

8. RELATED PARTY TRANSACTIONS

At December 31, 1999 and 1998 the Company had outstanding loaned securities
to SSB for $123.0 million and $39.7 million, respectively.

Included in other invested assets is a $987 million investment in Citigroup
preferred stock at December 31, 1999 and 1998, carried at cost.

In the ordinary course of business, the Company purchases and sells
securities through affiliated broker-dealers. These transactions are
conducted on an arm's length basis.

F-20
<PAGE> 331
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

In 1998 Primerica became a distributor of products for Travelers Life &
Annuity. Primerica sold $903 million and $256 million of deferred annuities
in 1999 and 1998, respectively.

Had the Company applied FAS 123 in accounting for Citigroup stock options,
net income would have been the pro forma amounts indicated below:

F-21
<PAGE> 332
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

9. LEASES

The Company is reimbursed for use of furniture and equipment through cost
sharing agreements by its affiliates.

F-22
<PAGE> 333
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)
10. FEDERAL INCOME TAXES

EFFECTIVE TAX RATE

Additional tax benefits attributable to employee stock plans allocated
directly to shareholder's equity were $17 million for each of the years
ended December 31, 1999, 1998 and 1997.

F-23
<PAGE> 334
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

The net deferred tax liabilities at December 31, 1999 and 1998 were
comprised of the tax effects of temporary differences related to the
following assets and liabilities:

At December 31, 1999, the Company had no ordinary or capital loss
carryforwards.

F-24
<PAGE> 335
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

11. NET INVESTMENT INCOME

12. INVESTMENTS AND INVESTMENT GAINS (LOSSES)

Realized investment gains (losses) for the periods were as follows:

<TABLE>
<CAPTION>
------------------------------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31, 1999 1998 1997
($ in millions) ---- ---- ----
------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
REALIZED INVESTMENT GAINS
Fixed maturities $(23) $111 $ 71
Equity securities 7 6 (9)
Mortgage loans 29 21 59
Real estate held for sale 108 16 67
Other (8) (5) 11
------------------------------------------------------------------------------------------------------
Total Realized Investment Gains $113 $149 $199
------------------------------------------------------------------------------------------------------
</TABLE>

F-25
<PAGE> 336
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

F-26
<PAGE> 337
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Fixed Maturities

The amortized cost and fair value of investments in fixed maturities were
as follows:

<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------
GROSS GROSS
DECEMBER 31, 1998 AMORTIZED UNREALIZED UNREALIZED FAIR
($ in millions) COST GAINS LOSSES VALUE
-------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
AVAILABLE FOR SALE:
Mortgage-backed securities - CMOs and
pass-through securities $ 4,717 $ 147 $ 11 $ 4,853
U.S. Treasury securities and obligations of
U.S. Government and government agencies and
authorities 1,563 186 3 1,746
Obligations of states, municipalities and
political subdivisions 239 18 -- 257
Debt securities issued by foreign governments 634 41 3 672
All other corporate bonds 13,025 532 57 13,500
Other debt securities 2,709 106 38 2,777
Redeemable preferred stock 86 3 1 88
------------------------------------------------------------------------------------------------------------------
Total Available For Sale $22,973 $ 1,033 $ 113 $23,893
------------------------------------------------------------------------------------------------------------------
</TABLE>

F-27
<PAGE> 338
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

F-28
<PAGE> 339
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Equity Securities

The cost and fair values of investments in equity securities were as
follows:

Mortgage Loans and Real Estate Held For Sale

At December 31, 1999 and 1998, the Company's mortgage loan and real estate
held for sale portfolios consisted of the following:

Underperforming mortgage loans include delinquent mortgage loans, loans in
the process of foreclosure, foreclosed loans and loans modified at interest
rates below market.

F-29
<PAGE> 340
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Aggregate annual maturities on mortgage loans at December 31, 1999 are as
follows:

Trading Securities

Trading securities of the Company are held in Tribeca.

F-30

<PAGE> 341
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Concentrations

At December 31, 1999 and 1998, the Company had an investment in Citigroup
Preferred Stock of $987 million. See Note 8.

The Company maintains a short-term investment pool for its insurance
affiliates in which the Company also participates. See Note 8.

The Company had concentrations of investments, primarily fixed maturities,
in the following industries:

F-31
<PAGE> 342
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

Non-Income Producing Investments

Investments included in the consolidated balance sheets that were
non-income producing for the preceding 12 months were insignificant.

Restructured Investments

13. DEPOSIT FUNDS AND RESERVES

F-32
<PAGE> 343
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

14. RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES

The following table reconciles net income to net cash provided by operating
activities:

---------------------------------------------------------------------------------------------------------------------
</TABLE>

15. NON-CASH INVESTING AND FINANCING ACTIVITIES

F-33
<PAGE> 344
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

16. OPERATING SEGMENTS

BUSINESS SEGMENT INFORMATION:

F-34
<PAGE> 345
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------------------------------------
TRAVELERS LIFE & PRIMERICA LIFE
1998 ($ in millions) ANNUITY INSURANCE TOTAL
-----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Business Volume:
Premiums $ 683 $1,057 $ 1,740
Deposits 7,693 -- 7,693
------- ------ -------
Total business volume $ 8,376 $1,057 $ 9,433
Net investment income 1,965 220 2,185
Interest credited to contractholders 876 -- 876
Amortization of deferred acquisition costs 88 187 275
Federal income taxes on Operating Income 260 170 430
Operating Income (excludes realized gains or
losses and the related FIT) $ 493 $ 312 $ 805
Segment Assets $49,646 $6,902 $56,548
-----------------------------------------------------------------------------------------------------------------
</TABLE>

F-35
<PAGE> 346
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(CONTINUED)

(a) Other represents revenue attributable to unallocated capital and run-off
businesses.

The Company's revenue was derived almost entirely from U.S. domestic
business. Revenue attributable to foreign countries was insignificant.

The Company had no transactions with a single customer representing 10% or
more of its revenue.

F-36
<PAGE> 347

THE TRAVELERS (LOGO UMBRELLA)

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES

AND

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

Individual Variable Annuity Contracts

Issued By

THE TRAVELERS INSURANCE COMPANY

Individual Purchasers

L-11895S TIC Ed. 5-2000
Printed in U.S.A.

<PAGE> 348

PART C

OTHER INFORMATION

Item 28. Financial Statements and Exhibits

(a) The financial statements of the Registrant, as well as of The Travelers
Growth and Income Stock Account for Variable Annuities, The Travelers
Money Market Account for Variable Annuities, The Travelers Timed Growth
and Income Stock Account for Variable Annuities, The Travelers Timed
Short-Term Bond Account for Variable Annuities and The Travelers Timed
Aggressive Stock Account for Variable Annuities, and the Reports of
Independent Auditors thereto, are in the Annual Reports for the
respective Accounts and are incorporated into the Statement of
Additional Information. For each of the Accounts, these financial
statements include as applicable:

Statement of Assets and Liabilities as of December 31, 1999
Statement of Operations for the year ended December 31, 1999
Statements of Changes in Net Assets for the years ended
December 31, 1999 and 1998
Statement of Investments as of December 31, 1999
Notes to Financial Statements

The consolidated financial statements of The Travelers Insurance
Company and subsidiaries and the reports of Independent Auditors are
contained in the Statements of Additional Information. The
consolidated financial statements of The Travelers Insurance Company
and subsidiaries include:

Consolidated Statements of Income for the years ended December
31, 1999, 1998 and 1997
Consolidated Balance Sheets as of December 31, 1999 and 1998
Consolidated Statements of Changes in Retained Earnings and
Accumulated Other Changes in Equity from Non-Owner Sources for
the years ended December 31, 1999, 1998 and 1997
Consolidated Statements of Cash Flows for the years ended
December 31, 1999, 1998 and 1997
Notes to Consolidated Financial Statements

(b) Exhibits

1. Resolution of The Travelers Insurance Company's Board of Directors
authorizing the establishment of the Registrant. (Incorporated
herein by reference to Exhibit 1 to Post-Effective Amendment No. 42
to the Registration Statement on Form N-3, filed on April 22, 1996.)

2. Rules and Regulations of the Registrant. (Incorporated herein by
reference to Exhibit C to the Definitive Proxy Statement on Schedule
14A filed March 9, 1999, Acession No. 0000950123-99-001973.)

3. Custody Agreement between the Registrant and Chase Manhattan Bank,
N. A., Brooklyn, New York. (Incorporated herein by reference to
Exhibit 3 to Post-Effective Amendment No. 41 to the Registration
Statement on Form N-3, filed April 26, 1995.)

4. Investment Advisory Agreement between the Registrant and Travelers
Asset Management International Corporation. (Incorporated herein by
reference to Exhibit 4 to Post-Effective Amendment No. 42 to the
Registration Statement on Form N-3, filed on April 22, 1996.)

<PAGE> 349

5(a). Distribution and Principal Underwriting Agreement among the
Registrant, The Travelers Insurance Company and CFBDS, Inc.
(Incorporated herein by reference to Exhibit 5(a) to Post-Effective
Amendment No. 14 to the Registration Statement on Form N-3, File No.
33-13052, filed February 23, 1999.)

5(b). Selling Agreement, (Incorporated herein by reference to Exhibit
3(b) to Pre-Effective Amendment No. 1 to the Registration Statement
on Form N-4, File No. 333-60227, filed

6. Example of Variable Annuity Contract (Incorporated herein by
reference to Exhibit 4 to Post-Effective Amendment No. 29 to the
Registration Statement on Form N-4 , File No. 2-79529, filed on
April 19, 1996.)

7. Example of Application. (Incorporated herein by reference to
Exhibit 7 to Post-Effective Amendment No. 29 to the Registration
Statement on Form N-4, File No. 2-79529, filed on April 19, 1996.)

8(a). Charter of The Travelers Insurance Company, as amended on October
19, 1994. (Incorporated herein by reference to Exhibit 3(a)(i) to
the Registration Statement on Form S-2, File No. 33-58677, filed via
EDGAR on April 18, 1995.)

8(b). By-Laws of The Travelers Insurance Company, as amended on October
20, 1994. (Incorporated herein by reference to Exhibit 3(b)(i) to
the Registration Statement on Form S-2, File No. 33-58677, filed via
EDGAR on April 18, 1995.)

12. Opinion of Counsel as to the legality of the securities being
registered. (Incorporated herein by reference to Exhibit 12 to
Post-Effective Amendment No. 44 to the Registration Statement on
Form N-3 filed April 30, 1997.)

13. Consent of KPMG LLP, Independent Certified Public Accountants.

16. Schedule for Computation of Total Return Calculations - Standardized
and Non-Standardized. (Incorporated herein by reference to Exhibit
16 to Post-Effective Amendment No. 44 to the Registration Statement
on Form N-4, filed April 30, 1998.)

17. Code of Ethics - To be provided in a subsequent amendment.

18(a) Powers of Attorney authorizing Ernest J. Wright or Kathleen A. McGah
as signatory for Heath B. McLendon, Knight Edwards, Robert E. McGill
III, Lewis Mandell and Frances M. Hawk. (Incorporated herein by
reference to Exhibit 18(a) to Post-Effective Amendment No. 42 to the
Registration Statement on Form N-3, filed on April 22, 1996.)

18(b). Powers of Attorney authorizing Ernest J. Wright or Kathleen A. McGah
as signatory for Michael A. Carpenter, Jay S. Benet, George C.
Kokulis, Ian R. Stuart and Katherine M. Sullivan. (Incorporated
herein by reference to Exhibit 18(b) to Post-Effective Amendment No.
43 to the Registration Statement on Form N-3 filed on February 20,
1997.)

18(c). Powers of Attorney authorizing Jay S. Fishman or Ernest J. Wright as
signatory for Robert I. Lipp, Charles O. Prince, III, Marc P. Weill,
Irwin R. Ettinger and Donald T. DeCarlo. (Incorporated herein by
reference to Exhibit 18(c) to Post-Effective Amendment No. 41 to the
Registration Statement on Form N-3, filed April 26, 1995.)

18(d) Powers of Attorney authorizing Ernest J. Wright and Kathleen A.
McGah as signatory for George C. Kokulis, Katherine M. Sullivan and
Glenn D. Lammey.

<PAGE> 350

Item 29. Directors and Officers of The Travelers Insurance Company

<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address with Insurance Company with Registrant
- ------------------ ---------------------- ---------------------
<S> <C> <C>
George C. Kokulis* Director, President and ----
Chief Executive Officer
Katherine M. Sullivan* Director and Senior Vice President ----
Marc P. Weill** Director and Senior Vice President ----
Mary Jean Thornton* Executive Vice President and ----
Chief Information Officer
Stuart Baritz*** Senior Vice President ----
Jay S. Fishman* Senior Vice President ----
Barry Jacobson* Senior Vice President ----
Russell H. Johnson* Senior Vice President ----
Marla Berman Lewitus* Senior Vice President and ----
General Counsel
Brendan Lynch* Senior Vice President ----
Warren H. May* Senior Vice President ----
Kathleen Preston* Senior Vice President ----
David A. Tyson* Senior Vice President ----
F. Denney Voss* Senior Vice President ----
Glenn D. Lammey* Chief Financial Officer, Chief ----
Accounting Officer and Controller
Donald R. Munson, Jr.* Vice President ----
Anthony Cocolla Second Vice President ----
Scott R. Hansen Second Vice President ----
Linn K. Richardson* Second Vice President and Actuary ----
Paul Weissman Second Vice President and Actuary ----
David A. Golino Vice President Principal Accounting
Officer
Ernest J. Wright* Vice President and Secretary Secretary to the
Board of Managers
Kathleen A. McGah* Assistant Secretary and Assistant Secretary to
Deputy General Counsel Board of Managers

Principal Business Address:

* The Travelers Insurance Company ** Citigroup Inc.
One Tower Square 388 Greenwich Street
Hartford, CT 06183 New York, N.Y. 10013

*** Travelers Portfolio Group
1345 Avenue of the Americas
New York, NY 10105
</TABLE>

<PAGE> 351

Item 30. Persons Controlled by or Under Common Control with the Depositor or
Registrant.

Incorporated herein by reference to Exhibit 16 to Post-Effective Amendment No. 2
to the Registration Statement on Form N-4, File No. 333-40193, filed April 12,
2000.

Item 31. Number of Contract Owners

As of March 1, 2000, 11,394 contract owners held qualified and non-qualified
contracts offered by he Registrant.

Item 32. Indemnification

Pursuant to the provisions of Article IV, Section 4.4 of the Rules and
Regulations of the Registrant, indemnification is provided to members of the
Board of Managers, officers and employees of the Registrant in accordance with
the standards established by Sections 33-770-33-778, inclusive of the
Connecticut General Statutes ("C.G.S.") relating to indemnification under the
Connecticut Stock Corporation Act.

Sections 33-770 et seq. of the Connecticut General Statutes ("C.G.S.") regarding
indemnification of directors and officers of Connecticut corporations provides
in general that Connecticut corporations shall indemnify their officers,
directors and certain other defined individuals against judgments, fines,
penalties, amounts paid in settlement and reasonable expenses actually incurred
in connection with proceedings against the corporation. The corporation's
obligation to provide such indemnification generally does not apply unless (1)
the individual is wholly successful on the merits in the defense of any such
proceeding; or (2) a determination is made (by persons specified in the statute)
that the individual acted in good faith and in the best interests of the
corporation and in all other cases, his conduct was at least not opposed to the
best interests of the corporation, and in a criminal case he had no reasonable
cause to believe his conduct was unlawful; or (3) the court, upon application by
the individual, determines in view of all of the circumstances that such person
is fairly and reasonably entitled to be indemnified, and then for such amount as
the court shall determine. With respect to proceedings brought by or in the
right of the corporation, the statute provides that the corporation shall
indemnify its officers, directors and certain other defined individuals, against
reasonable expenses actually incurred by them in connection with such
proceedings, subject to certain limitations.

Citigroup Inc. also provides liability insurance for its directors and officers
and the directors and officers of its subsidiaries, including the Registrant.
This insurance provides for coverage against loss from claims made against
directors and officers in their capacity as such, including, subject to certain
exceptions, liabilities under the federal securities laws.

Rule 484 Undertaking

Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

<PAGE> 352

Item 33. Business and Other Connections of Investment Adviser

Officers and Directors of Travelers Asset Management International Company LLC
(TAMIC), the Fund's Investment Adviser, are set forth in the following table:

<TABLE>
<CAPTION>
Name Position with TAMIC Citigroup Investments Inc*
- ---- ------------------- --------------------------
<S> <C> <C>
Marc P. Weill Director and Chairman Executive President
Chief Investment Officer
David A. Tyson Director, President and Executive Vice President
Chief Investment Officer
Joseph E. Rueli, Jr. Director, Senior Vice President Senior Vice President
and Chief Financial Officer and Chief Financial Officer
F. Denney Voss Director and Senior Vice Executive Vice President
President
John R. Britt Director and Secretary Senior Counsel
Eugene Collins Senior Vice President Senior Vice President/
Thomas Hajdukiewicz Senior Vice President Senior Vice President/High Yield
Kathryn D. Karlic Senior Vice President Senior Vice President/Credit
Glenn N. Marchak Senior Vice President Vice President
David R. Miller Senior Vice President First Vice President
Emil J. Molinaro Senior Vice President First Vice President
Joseph M. Mullally Senior Vice President Senior Vice President
Jordan M. Stitzer Senior Vice President Senior Vice President
David Amaral Vice President Trader
Roy Augsberger Vice President First Vice President
John R. Calcagni, Jr. Senior Vice President First Vice President
Gilbert G. Campbell Vice President VP Senior Credit Analyst
Allen R. Cantrell Vice President Vice President-Portfolio Manager
Arthur William Carnduff Vice President Vice President-Portfolio Manager
Richard Davis Vice President Senior Financial Analyst
Angela Pellegrini Degis Vice President Vice President/Credit Analyst
Denise Duffee Vice President Vice President Portfolio Mgr.
Bruce E. Fox Vice President Vice President/Derivatives
Carl Franzetti Vice President Vice President/Sr. Credit Analyst
Kimerly Guerrero Vice President Vice President
John F. Green Vice President Vice President
Edward Hinchliffe III Vice President and Cashier First Vice President-Securities
Jeremy C. Hughes Vice President Trader
Paul Jablansky Vice President 2nd Vice President-Securities
Richard E. John Vice President Frist Vice President
Kurt Lin Vice President Trader
David R. Martin Vice President Vice President/Credit Analyst
Paul A. Mataras Vice President Vice President/Analyst High Yield
Robert Mills Vice President Assistant Vice President/Port. Mgr.
David Nadeau Vice President Senior Analyst
John W. Petchler Vice President First Vice President/Portfolio Mgr.
Steven A. Rosen Vice President Vice President/Sr. Credti Analyst
</TABLE>

<PAGE> 353

<TABLE>
<S> <C> <C>
Ebru Salomoni Vice President Sales/Marketing Representative
Andrew Sanford Vice President Vice President/Senior Trader
Charles H. Silverstein Vice President First Vice President/Portfolio Mgr.
Robert Simmons Vice President Vice President/Senior Trade
Lisa A. Thomas Vice President Assistant Vice President/Port. Mgr.
Teresa M. Torrey Vice President First Vice President/Portfolio Mgr
Pamela D. Westmoreland Vice President Vice President/Portfolio Manager
Matthew Anavy Assistant Vice President Trader
Paul Bryan Assistant Vice President Vice President-Securities
Eric Clapprood Assistant Vice President Financial Analyst
Bonnie Crisco Assistant Vice President Trader
Steve Diacos Assistant Vice President Vice President-Credit Analyst
William M. Gardner Assistant Vice President Private Placement Officer
Laura Horan Assistant Vice President Assistant Compliance Officer
Kevin Hwang Assistant Vice President Trading Analyst
Cristina Lucci Assistant Vice President Financial Analyst
Matthew J. McInerny Assistant Vice President Assistant Vice President
Linnea Morrow Assistant Vice President Vice President-Finance
Robert O'Brien Assistant Vice President Assistant Trader
Michael Plage Assistant Vice President Trading Analyst
Caroline Platt Assistant Vice President Trading Analyst
Andrew Feldman Assistant Secretary Senior Counsel, Corporate Staff
Millie Kim Assistant Secretary General Counsel
Daniel Scudder Assistant Secretary Counsel
Andrew Spring Assistant Secretary Counsel
Patricia A. Uzzel Compliance Officer Assistant Vice President and
Investment Compliance Officer
Frank J. Fazzina Controller First Vice President-Securities
</TABLE>

* Positions held with Citigroup Investments Inc. 388 Greenwich Street,
New York, N.Y.

Item 34. Principal Underwriter

(a) CFBDS, Inc.
21 Milk Street
Boston, MA 02109

(a) CFBDS, the Registrant's Distributor, is also the distributor for
CitiFunds(SM) International Growth & Income Portfolio, CitiFunds(SM)
International Growth Portfolio, CitiFunds(SM) U.S. Treasury Reserves,
CitiFunds(SM) Cash Reserves, CitiFunds(SM) Premium U.S. Treasury Reserves,
CitiFunds(SM) Premium Liquid Reserves, CitiFunds(SM) Institutional U.S. Treasury
Reserves, CitiFunds(SM) Institutional Liquid Reserves, CitiFunds(SM)
Institutional Cash Reserves, CitiFunds(SM) Tax Free Reserves, CitiFunds(SM)
Institutional Tax Free Reserves, CitiFunds(SM) California Tax Free Reserves,
CitiFunds(SM) Connecticut Tax Free Reserves, CitiFunds(SM) New York Tax Free
Reserves, CitiFunds(SM) New York Tax Free Income Portfolio, CitiFunds(SM)
National Tax Free Income Portfolio, CitiFunds(SM) California Tax Free Income
Portfolio, CitiFunds(SM) Intermediate Income Portfolio, CitiFunds(SM) Balanced
Portfolio, CitiFunds(SM) Small Cap Value Portfolio, CitiFunds(SM) Growth &
Income Portfolio, CitiFunds(SM) Large Cap

<PAGE> 354

Growth Portfolio, CitiFunds(SM) Small Cap Growth Portfolio, CitiFunds(SM)
Short-Term U.S. Government Income Portfolio, CitiFunds(SM) Emerging Asian
Markets Equity Portfolio CitiSelect(R) VIP Folio 200, CitiSelect(R) VIP Folio
300, CitiSelect(R) VIP Folio 400, CitiSelect(R) VIP Folio 500, CitiFunds(SM)
Small Cap Growth VIP Portfolio, CitiSelect(R) Folio 100, CitiSelect(R) Folio
200, CitiSelect(R) Folio 300, CitiSelect(R) Folio 400, and CitiSelect(R) Folio
500.

CFBDS is also the placement agent for Large Cap Value Portfolio, Small Cap Value
Portfolio, International Portfolio, Foreign Bond Portfolio, Intermediate Income
Portfolio, Short-Term Portfolio, Growth & Income Portfolio, U.S. Fixed Income
Portfolio, High Yield Portfolio, Large Cap Growth Portfolio, Small Cap Growth
Portfolio, International Equity Portfolio, Balanced Portfolio, Government Income
Portfolio, Tax Free Reserves Portfolio, Cash Reserves Portfolio and U.S.
Treasury Reserves Portfolio, Emerging Asian Markets Equity Portfolio.

CFBDS also serves as the distributor for the following funds: The Travelers Fund
U for Variable Annuities, The Travelers Fund VA for Variable Annuities, The
Travelers Fund BD for Variable Annuities, The Travelers Fund BD II for Variable
Annuities, The Travelers Fund BD III for Variable Annuities, The Travelers Fund
BD IV for Variable Annuities, The Travelers Fund ABD for Variable Annuities, The
Travelers Fund ABD II for Variable Annuities, The Travelers Separate Account PF
for Variable Annuities, The Travelers Separate Account PF II for Variable
Annuities, The Travelers Separate Account QP for Variable Annuities, The
Travelers Separate Account TM for Variable Annuities, The Travelers Separate
Account TM II for Variable Annuities, The Travelers Separate Account Five for
Variable Annuities, The Travelers Separate Account Six for Variable Annuities,
The Travelers Separate Account Seven for Variable Annuities, The Travelers
Separate Account Eight for Variable Annuities, The Travelers Separate Account
Nine for Variable Annuities, The Travelers Separate Account Ten for Variable
Annuities, The Travelers Fund UL for Variable Life Insurance, The Travelers Fund
UL II for Variable Life Insurance, The Travelers Fund UL III for Variable Life
Insurance, The Travelers Variable Life Insurance Separate Account One, The
Travelers Variable Life Insurance Separate Account Two, The Travelers Variable
Life Insurance Separate Account Three, The Travelers Variable Life Insurance
Separate Account Four, The Travelers Separate Account MGA, The Travelers
Separate Account MGA II, The Travelers Growth and Income Stock Account for
Variable Annuities, The Travelers Money Market Account for Variable Annuities,
The Travelers Timed Growth and Income Stock Account for Variable Annuities, The
Travelers Timed Short-Term Bond Account for Variable Annuities, The Travelers
Timed Aggressive Stock Account for Variable Annuities, The Travelers Timed Bond
Account for Variable Annuities

CFBDS is also the distributor for the following funds: Emerging Growth Fund,
Government Fund, Growth and Income Fund, International Equity Fund, Municipal
Fund, Balanced Investments, Emerging Markets Equity Investments, Government
Money Investments, High Yield Investments, Intermediate Fixed Income
Investments, International Equity Investments, International Fixed Income
Investments, Large Capitalization Growth Investments, Large Capitalization Value
Equity Investments, Long-Term Bond Investments, Mortgage Backed Investments,
Municipal Bond Investments, Small Capitalization Growth Investments, Small
Capitalization Value Equity Investments, Appreciation Portfolio, Diversified
Strategic Income Portfolio, Emerging Growth Portfolio, Equity Income Portfolio,
Equity Index Portfolio, Growth & Income Portfolio, Intermediate High Grade
Portfolio, International Equity Portfolio, Money Market Portfolio, Total Return
Portfolio.

CFBDS is also the distributor for the following Smith Barney Mutual Fund
registrants: Smith Barney Adjustable Rate Government Income Fund, Smith Barney
Aggressive Growth Fund Inc., Smith Barney Appreciation Fund, Smith Barney
Arizona Municipals Fund Inc., Smith Barney California Municipals Fund Inc.,
Smith Barney Large Cap Blend Fund, Smith Barney Fundamental Value Fund Inc.,
Smith Barney Balanced Fund, Smith Barney Convertible Fund, Smith Barney
Diversified Strategic Income Fund, Smith Barney Exchange Reserve Fund, Smith
Barney High Income Fund, Smith Barney Municipal High Income Fund, Smith Barney
Premium Total Return Fund, Smith Barney Total Return Bond Fund, Smith Barney
Contrarian Fund, Smith Barney Government Securities Fund, Smith Barney
Hansberger Global Small Cap Value Fund, Smith Barney Hansberger Global Value
Fund, Smith Barney Investment Grade Bond Fund, Smith Barney Special Equities
Fund, Smith Barney Intermediate

<PAGE> 355

Maturity California Municipals Fund, Smith Barney Intermediate Maturity New York
Municipals Fund, Smith Barney Large Capitalization Growth Fund, Smith Barney S&P
500 Index Fund, Smith Barney Mid Cap Blend Fund, Smith Barney Managed
Governments Fund Inc., Smith Barney Managed Municipals Fund Inc., Smith Barney
Massachusetts Municipals Fund, Cash Portfolio, Government Portfolio, Retirement
Portfolio, California Money Market Portfolio, Florida Portfolio, Georgia
Portfolio, Limited Term Portfolio, New York Money Market Portfolio, New York
Portfolio, Pennsylvania Portfolio, Smith Barney Municipal Money Market Fund,
Inc., Smith Barney Natural Resources Fund Inc., Smith Barney New Jersey
Municipals Fund Inc., Smith Barney Oregon Municipals Fund, Zeros Plus Emerging
Growth Series 2000, Smith Barney Security and Growth Fund, Smith Barney Small
Cap Blend Fund, Inc., Smith Barney Telecommunications Income Fund, Smith Barney
High Income Portfolio, Smith Barney Large Cap Value Portfolio, Smith Barney
International Equity Portfolio, Smith Barney Large Capitalization Growth
Portfolio, Smith Barney Money Market Portfolio, Smith Barney Pacific Basin
Portfolio, Balanced Portfolio, Conservative Portfolio, Growth Portfolio, High
Growth Portfolio, Income Portfolio, Global Portfolio, Select Balanced Portfolio,
Select Conservative Portfolio, Select Growth Portfolio, Select High Growth
Portfolio, Select Income Portfolio, Concert Social Awareness Fund, Large Cap
Value Fund, Short-Term High Grade Bond Fund, U.S. Government Securities Fund,
Cash Portfolio, Government Portfolio, Municipal Portfolio, Concert Peachtree
Growth Fund, Income and Growth Portfolio, Reserve Account Portfolio, U.S.
Government/High Quality Securities Portfolio, Emerging Markets Portfolio,
European Portfolio, Global Government Bond Portfolio, International Balanced
Portfolio, International Equity Portfolio, Pacific Portfolio, AIM Capital
Appreciation Portfolio, Alliance Growth Portfolio, GT Global Strategic Income
Portfolio, MFS Total Return Portfolio, Putnam Diversified Income Portfolio, TBC
Managed Income Portfolio, Van Kampen American Capital Enterprise Portfolio,
Centurion Tax-Managed U.S. Equity Fund, Centurion Tax-Managed International
Equity Fund, Centurion U.S. Protection Fund, Centurion International Protection
Fund, Global High-Yield Bond Fund, International Equity Fund, Emerging
Opportunities Fund, Core Equity Fund, Long-Term Bond Fund, Global Dimensions
Fund L.P., Citicorp Private Equity L.P., AIM V.I. Capital Appreciation Fund, AIM
V.I. Government Series Fund, AIM V.I. Growth Fund, AIM V.I. International Equity
Fund, AIM V.I. Value Fund, Fidelity VIP Growth Portfolio, Fidelity VIP High
Income Portfolio, Fidelity VIP Equity Income Portfolio, Fidelity VIP Overseas
Portfolio, Fidelity VIP II Contrafund Portfolio, Fidelity VIP II Index 500
Portfolio, MFS World Government Series, MFS Money Market Series, MFS Bond
Series, MFS Total Return Series, MFS Research Series, MFS Emerging Growth
Series.

CFBDS is also the distributor for the following Salomon Brothers funds: Salomon
Brothers Institutional Money Market Fund, Salomon Brothers Cash Management Fund,
Salomon Brothers New York Municipal Money Market Fund, Salomon Brothers National
Intermediate Municipal Fund, Salomon Brothers U.S. Government Income Fund,
Salomon Brothers High Yield Bond Fund, Salomon Brothers Strategic Bond Fund,
Salomon Brothers Total Return Fund, Salomon Brothers Asia Growth Fund, Salomon
Brothers Capital Fund Inc, Salomon Brothers Investors Fund Inc, Salomon Brothers
Opportunity Fund Inc, Salomon Brothers Institutional High Yield Bond Fund,
Salomon Brothers Institutional Emerging Markets Debt Fund, Salomon Brothers
Variable Investors Fund, Salomon Brothers Variable Capital Fund, Salomon
Brothers Variable Total Return Fund, Salomon Brothers Variable High Yield Bond
Fund, Salomon Brothers Variable Strategic Bond Fund, Salomon Brothers Variable
U.S. Government Income Fund, and Salomon Brothers Variable Asia Growth Fund.

(b) The information required by this Item 29 with respect to each director
and officer of CFBDS, Inc. is incorporated by reference to Schedule A of Form BD
filed by CFBDS pursuant to the Securities and Exchange Act of 1934 (File No.
8-32417).

<PAGE> 356

Item 35. Location of Accounts and Records

(1) The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183

(2) Chase Manhattan Bank, N. A.
Chase MetroTech Center
Brooklyn, New York 11245

Item 36. Management Services

Inapplicable.

Item 37. Undertakings

The undersigned Registrant hereby undertakes:

(a) To file a post-effective amendment to this registration statement as
frequently as is necessary to ensure that the audited financial
statements in the registration statement are never more than sixteen
months old for so long as payments under the variable annuity contracts
may be accepted;

(b) To include either (1) as part of any application to purchase a contract
offered by the prospectus, a space that an applicant can check to
request a Statement of Additional Information, or (2) a post card or
similar written communication affixed to or included in the prospectus
that the applicant can remove to send for a Statement of Additional
Information; and

(c) To deliver any Statement of Additional Information and any financial
statements required to be made available under this Form N-3 promptly
upon written or oral request.

The Company hereby represents:

(a) That the aggregate charges under the Contracts of the Registrant
described herein are reasonable in relation to the services rendered,
the expenses expected to be incurred, and the risks assumed by the
Company.

<PAGE> 357

SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of
1940, the Registrant certifies that it meets the requirements of Securities Act
Rule 485(b) for effectiveness of this post-effective amendment to this
registration statement and has caused this amendment to this registration
statement to be signed on its behalf, in the City of Hartford, State of
Connecticut, on the 28th day of April, 2000.

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES
(Registrant)

By: *HEATH B. McLENDON
------------------------------
Heath B. McLendon
Chairman of the Board of Managers

As required by the Securities Act of 1933, this post-effective amendment to this
registration statement has been signed by the following persons in the
capacities indicated on the 28th day of April 2000.

<TABLE>
<S> <C>
*HEATH B. McLENDON Chairman, Board of Managers
- --------------------------
(Heath B. McLendon)

*KNIGHT EDWARDS Member, Board of Managers
- --------------------------
(Knight Edwards)

*ROBERT E. McGILL, III Member, Board of Managers
- --------------------------
(Robert E. McGill, III)

*LEWIS MANDELL Member, Board of Managers
- --------------------------
(Lewis Mandell)

*FRANCES M. HAWK Member, Board of Managers
- --------------------------
(Frances M. Hawk)
</TABLE>

*By:/s/Ernest J. Wright, Attorney-in-Fact
Secretary, Board of Managers

<PAGE> 358

SIGNATURES

THE TRAVELERS INSURANCE COMPANY
(Insurance Company)

By: *GLENN D. LAMMEY
-----------------------------------------
Glenn D. Lammey
Chief Financial Officer
Chief Accounting Officer and Controller

<TABLE>
<S> <C>
*GEORGE C. KOKULIS Director, President and Chief Executive Officer
- -------------------------- (Principal Executive Officer)
(George C. Kokulis

*KATHERINE M. SULLIVAN Director
- --------------------------
(Katherine M. Sullivan)

*MARC P. WEILL Director
- --------------------------
(Marc P. Weill)
</TABLE>

* By: /s/Ernest J. Wright, Attorney-in-Fact

<PAGE> 359

EXHIBIT INDEX

<TABLE>
<CAPTION>
Exhibit
No Description Method of Filing
- ------- ----------- ----------------
<S> <C> <C>
13. Consent of KPMG LLP, Independent Certified Public Accountants Electronically

18(d). Powers of Attorney authorizing Ernest J. Wright or Kathleen A. Electronically
McGah as signatory for George C. Kokulis, Katherine M. Sullivan
and Glenn D. Lammey.
</TABLE>

<PAGE> 1

Exhibit 13

Consent of Independent Certified Public Accountants

Board of Directors
The Travelers Insurance Company

We consent to the use of our reports included herein or incorporated herein by
reference and to the reference to our firm under the heading "Condensed
Financial Information" and as experts under the heading "Independent
Accountants".

/s/KPMG LLP
Hartford, Connecticut
April 28, 2000

<PAGE> 1

Exhibit 18(d)

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

That I, GEORGE C. KOKULIS of Simsbury, Connecticut, Director,
President and Chief Executive Officer of The Travelers Insurance Company
(hereafter the "Company"), do hereby make, constitute and appoint ERNEST J.
WRIGHT, Secretary of said Company, and KATHLEEN A. McGAH, Assistant Secretary of
said Company, or either one of them acting alone, my true and lawful
attorney-in-fact, for me, and in my name, place and stead, to sign registration
statements on behalf of said Company on Form N-3 or other appropriate form under
the Securities Act of 1933 and the Investment Company Act of 1940 for The
Travelers Quality Bond Account for Variable Annuities, a separate account of the
Company dedicated specifically to the funding of variable annuity contracts to
be offered by said Company, and further, to sign any and all amendments thereto,
including post-effective amendments, that may be filed by the Company on behalf
of said registrant.

IN WITNESS WHEREOF, I have hereunto set my hand this 10th day of
April 2000.

/s/George C. Kokulis
Director, President and Chief Executive Officer
The Travelers Insurance Company

<PAGE> 2

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

That I, KATHERINE M. SULLIVAN of Longmeadow, Massachusetts, a
Director of The Travelers Insurance Company (hereafter the "Company"), do hereby
make, constitute and appoint ERNEST J. WRIGHT, Secretary of said Company, and
KATHLEEN A. McGAH, Assistant Secretary of said Company, or either one of them
acting alone, my true and lawful attorney-in-fact, for me, and in my name, place
and stead, to sign registration statements on behalf of said Company on Form N-3
or other appropriate form under the Securities Act of 1933 and the Investment
Company Act of 1940 for The Travelers Quality Bond Account for Variable
Annuities, a separate account of the Company dedicated specifically to the
funding of variable annuity contracts to be offered by said Company, and
further, to sign any and all amendments thereto, including post-effective
amendments, that may be filed by the Company on behalf of said registrant.

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of
March 2000.

/s/Katherine M. Sullivan
Director
The Travelers Insurance Company

<PAGE> 3

THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES

POWER OF ATTORNEY

KNOW ALL MEN BY THESE PRESENTS:

That I, GLENN D. LAMMEY of Simsbury, Connecticut, Chief Financial
Officer, Chief Accounting Officer and Controller of The Travelers Insurance
Company (hereafter the "Company"), do hereby make, constitute and appoint ERNEST
J. WRIGHT, Secretary of said Company, and KATHLEEN A. McGAH, Assistant Secretary
of said Company, or either one of them acting alone, my true and lawful
attorney-in-fact, for me, and in my name, place and stead, to sign registration
statements on behalf of said Company on Form N-3 or other appropriate form under
the Securities Act of 1933 and the Investment Company Act of 1940 for The
Travelers Quality Bond Account for Variable Annuities, a separate account of the
Company dedicated specifically to the funding of variable annuity contracts to
be offered by said Company, and further, to sign any and all amendments thereto,
including post-effective amendments, that may be filed by the Company on behalf
of said registrant.

IN WITNESS WHEREOF, I have hereunto set my hand this 31st day of
March 2000.

/s/Glenn D. Lammey
Chief Financial Officer,
Chief Accounting Officer and Controller
The Travelers Insurance Company