Travelers Money Market Account for Variable Annuities, et al. – ‘N-3/A’ on 10/13/04

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Pre-Effective Amendment to Registration Statement for a Separate Account (Management Investment Company)   —   Form N-3
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: N-3/A       Pre-Effective Amendment to Registration Statement    219   1.00M 
                          for a Separate Account (Management                     
                          Investment Company)                                    
 2: EX-99.13    Miscellaneous Exhibit                                  1      5K 

N-3/A   —   Pre-Effective Amendment to Registration Statement for a Separate Account (Management Investment Company)
Document Table of Contents

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                                                        STATEMENT NO. 333-117032
                                                                        811-3409

================================================================================

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

----------

FORM N-3

 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
 PRE-EFFECTIVE AMENDMENT NO. 1

AND/OR
 REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940
AMENDMENT NO. 40

 -----------

 THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES
(Exact name of Registrant)

 THE TRAVELERS INSURANCE COMPANY
 (Name of Insurance Company)

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

 ONE CITYPLACE, HARTFORD, CONNECTICUT 06103-3415
(Address of Insurance Company's Principal Executive Offices)

 Insurance Company's Telephone Number, including Area Code: (860) 308-1000

ERNEST J. WRIGHT
Assistant Secretary to the Board of Managers
 The Travelers Money Market Account for Variable Annuities
 One Cityplace, Hartford, Connecticut 06103-3415
 (Name and Address of Agent for Service)

Approximate Date of Proposed Public Offering: As soon as practicable following  
the effectiveness of the Registration Statement.                                

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

[   ]    immediately upon filing pursuant to paragraph (b) of Rule 485.         

[   ]    on ___________ pursuant to paragraph (b) of Rule 485.                  

[   ]    ____ days after filing pursuant to paragraph (a)(1) of Rule 485.       

[   ]    on ___________ pursuant to paragraph (a)(1) of Rule 485.               

If appropriate, check the following box:                                        
[ N/A ] this post-effective amendment designates a new effective date for a     
previously filed post-effective amendment.                                      

The Registrant hereby amends this registration statement on such date or dates  
as may be necessary to delay its effective date until the registrant shall file 
a further amendment which specifically states that this registration statement  
shall thereafter become effective in accordance with Section 8(a) of the        
Securities Act of 1933 or until the registration statement shall become         
effective on such date as the Commission, acting pursuant to Section 8(a), may  
determine.                                                                      

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PART A

INFORMATION REQUIRED IN A PROSPECTUS

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UNIVERSAL ANNUITY ADVANTAGE PROSPECTUS
This prospectus describes Universal Annuity Advantage, 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 (referred to as     
"Subaccounts" in your Contract) you select and, subject to availability, the    
interest credited to the Fixed Account. The Variable Funding Options (sometimes 
called "Subaccounts") are:                                                      

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

                                                        [Enlarge/Download Table]

                                                                                                                            
Travelers Growth and Income Stock Account for Variable            Travelers Quality Bond Account for Variable Annuities (QB)
   Annuities (GIS)                                                                                                          
Travelers Money Market Account for Variable Annuities (MM)                                                                  

                             TRAVELERS FUND U FOR VARIABLE ANNUITIES                                                        
                             ---------------------------------------                                                        

                                                                                                                            
Capital Appreciation Fund                                        PUTNAM VARIABLE TRUST                                      
Dreyfus Stock Index Fund -- Initial Shares                          Putnam VT Small Cap Value Fund -- Class IB Shares       
High Yield Bond Trust                                            SALOMON BROTHERS VARIABLE SERIES FUNDS INC.                
Managed Assets Trust                                                All Cap Fund -- Class I(3)                              
ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC.                Investors Fund -- Class I                               
   AllianceBernstein Premier Growth Portfolio -- Class B(1)         Small Cap Growth Fund -- Class I                        
CITISTREET FUNDS, INC.                                           THE TRAVELERS SERIES TRUST                                 
   CitiStreet Diversified Bond Fund -- Class I                      Disciplined Mid Cap Stock Portfolio                     
   CitiStreet International Stock Fund -- Class I                   Lazard International Stock Portfolio                    
   CitiStreet Large Company Stock Fund -- Class I                   MFS Mid Cap Growth Portfolio                            
   CitiStreet Small Company Stock Fund -- Class I                   MFS Value Portfolio                                     
DELAWARE VIP TRUST                                                  Pioneer Fund Portfolio(4)                               
   Delaware VIP REIT Series -- Standard Class                       Social Awareness Stock Portfolio                        
DREYFUS VARIABLE INVESTMENT FUND                                    U.S. Government Securities Portfolio                    
   Dreyfus Variable Investment Fund -- Developing Leaders        TRAVELERS SERIES FUND INC.                                 
     Portfolio -- Initial Shares(2)                                 MFS Total Return Portfolio                              
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST                Pioneer Strategic Income Portfolio(5)                   
   Franklin Small Cap Fund -- Class 2 Shares                        SB Adjustable Rate Income Portfolio Smith Barney        
   Mutual Shares Securities Fund -- Class 2 Shares                    Class                                                 
   Templeton Developing Markets Securities Fund -- Class 2          Smith Barney Aggressive Growth Portfolio                
     Shares                                                         Smith Barney Large Capitalization Growth Portfolio      
   Templeton Foreign Securities Fund -- Class 2 Shares              Strategic Equity Portfolio(6)                           
   Templeton Global Asset Allocation Fund -- Class 1 Shares      VAN KAMPEN LIFE INVESTMENT TRUST                           
   Templeton Growth Securities Fund -- Class 1 Shares               Comstock Portfolio Class II Shares                      
GREENWICH STREET SERIES FUND                                     VARIABLE INSURANCE PRODUCTS FUND                           
   Appreciation Portfolio                                           Equity-Income Portfolio -- Initial Class                
   Fundamental Value Portfolio                                      Growth Portfolio -- Initial Class                       
JANUS ASPEN SERIES                                               VARIABLE INSURANCE PRODUCTS FUND II                        
   International Growth Portfolio -- Service Shares                 Asset Manager Portfolio -- Initial Class                
LAZARD RETIREMENT SERIES, INC.                                      Contrafund(R) Portfolio -- Service Class 2              
   Lazard Retirement Small Cap Portfolio                         VARIABLE INSURANCE PRODUCTS FUND III                       
PIMCO VARIABLE INSURANCE TRUST                                      Mid Cap Portfolio -- Service Class 2                    
   Total Return Portfolio -- Administrative Class                                                                           

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

(1)     Formerly Premier Growth Portfolio -- Class B            (4)   Formerly Utilities Portfolio                          
(2)     Formerly Small Cap Portfolio -- Initial Shares          (5)   Formerly Putnam Diversified Income Portfolio          
(3)     Formerly Capital Fund -- Class I                        (6)   Formerly Alliance Growth Portfolio                    

The Contract, certain Contract features and/or some of the funding options may  
not be available in all states. This prospectus provides the information that   
you should know before investing in the Contract. Please keep this prospectus   
for future reference. You can receive additional information about your Contract
by requesting a copy of the Statement of Additional Information ("SAI") dated   
October 25, 2004. We filed the SAI with the Securities and Exchange Commission  
("SEC"), and it is incorporated by reference into this prospectus. To request a 
copy, write to The Travelers Insurance Company, Annuity Investor Services, One  
Cityplace, 3 CP, Hartford, Connecticut 06103-3415, call 1-800-842-9406 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 APPROVED OR DISAPPROVED THESE SECURITIES OR 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 OCTOBER 25, 2004

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 TABLE OF CONTENTS

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Glossary....................................................  3     Allocation of Annuity....................................38
Summary.....................................................  5     Variable Annuity.........................................38
Fee Table...................................................  8     Fixed Annuity............................................39
Condensed Financial Information............................. 15  Payment Options.............................................39
The Annuity Contract........................................ 15     Election of Options......................................39
   Contract Owner Inquiries................................. 16     Annuity Options..........................................39
   Purchase Payments........................................ 16  Miscellaneous Contract Provisions...........................40
   Accumulation Units....................................... 16     Right to Return..........................................40
   The Variable Funding Options............................. 17     Termination..............................................40
The Fixed Account........................................... 22     Required Reports.........................................41
Charges and Deductions...................................... 22     Assignment...............................................41
   General.................................................. 22     Suspension of Payments...................................41
   Withdrawal Charge........................................ 23  Other Information...........................................41
   Free Withdrawal Allowance................................ 23     The Insurance Company....................................41
   Transfer Charge.......................................... 23     Financial Statements.....................................41
   Administrative Charge.................................... 23     Distribution of Variable Annuity Contracts...............41
   Mortality and Expense Risk Charge........................ 24     Conformity with State and Federal Laws...................42
   Guaranteed Minimum Withdrawal Benefit Charge............. 24     Voting Rights............................................43
   Variable Funding Option Expenses......................... 24     Restrictions on Financial Transactions...................43
   Premium Tax.............................................. 24     Legal Proceedings and Opinions...........................43
   Changes in Taxes Based upon Premium or Value............. 24  The Separate Accounts.......................................44
   Asset Allocation Advice.................................. 24     Performance Information..................................44
   Managed Separate Account: Management and Fees............ 24  Federal Tax Considerations..................................45
Transfers................................................... 25     General Taxation of Annuities............................45
   Dollar Cost Averaging ................................... 27     Types of Contracts: Qualified and Non-qualified..........45
Asset Allocation Services................................... 27     Qualified Annuity Contracts..............................45
Access to your Money........................................ 29       Taxation of Qualified Annuity Contracts................45
   Systematic Withdrawals................................... 31       Mandatory Distributions for Qualified Plans............46
   Managed Distribution Program............................. 32     Non-qualified Annuity Contracts..........................46
   Loans.................................................... 32       Diversification Requirements for Variable                
Ownership Provisions........................................ 32         Annuities............................................47
   Types of Ownership....................................... 32       Ownership of the Investments...........................47
      Contract Owner........................................ 32       Taxation of Death Benefit Proceeds.....................47
      Beneficiary........................................... 32     Other Tax Considerations.................................47
      Annuitant............................................. 33       Treatment of Charges for Optional Benefits.............47
Death Benefit............................................... 33       Penalty Tax for Premature Distribution.................47
   Death Proceeds before the Maturity Date.................. 33       Puerto Rico Tax Considerations.........................47
      Standard Death Benefit................................ 33       Non-Resident Aliens....................................48
      Annual Step-Up Death Benefit to Age 75................ 34  Managed Separate Accounts...................................48
   Payment of Proceeds...................................... 35    The Travelers Growth and Income Stock                       
   Spousal Contract Continuance............................. 36       Account................................................48
   Beneficiary Contract Continuance......................... 37    The Travelers Quality Bond Account .......................50
   Planned Death Benefit.................................... 37    The Travelers Money Market Account .......................52
   Death Proceeds after the Maturity Date................... 38  Investments at a Glance.....................................56
The Annuity Period.......................................... 38  Appendix A (Condensed Financial Information)...............A-1
   Maturity Date............................................ 38  Appendix B (The Fixed Account).............................B-1
Access to your Money........................................ 38  Appendix C (Contents of Statement of                          
                                                                    Additional Information).................................C-1

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GLOSSARY

ACCUMULATION UNIT -- an accounting unit of measure used to calculate the value  
of this Contract before Annuity Payments begin.                                 

ANNUITANT -- the person on whose life the Maturity Date and Annuity Payments    
depend.                                                                         

ANNUITY PAYMENTS -- a series of periodic payments (a) for life; (b) for life    
with a minimum number of payments; (c) for the joint lifetime of the Annuitant  
and another person, and thereafter during the lifetime of the survivor; or (d)  
for a fixed period.                                                             

ANNUITY UNIT -- an accounting unit of measure used to calculate the amount of   
Annuity Payments.                                                               

CASH SURRENDER VALUE -- the Contract Value less any withdrawal charge and       
premium tax not previously deducted.                                            

CODE -- the Internal Revenue Code of 1986, as amended, and all related laws and 
regulations that are in effect during the term of this Contract.                

CONTRACT DATE -- the date on which the Contract is issued.                      

CONTRACT OWNER (you) -- the person named in the Contract (on the specifications 
page) as the owner of the Contract.                                             

CONTRACT VALUE -- Purchase Payments, plus or minus any investment experience on 
the amounts allocated to the variable funds or interest on amounts allocated to 
the Fixed Account, adjusted by any applicable charges and withdrawals.          

CONTRACT YEARS -- twelve month periods beginning with the Contract Date.        

DEATH REPORT DATE -- the day on which we have received 1) Due Proof of Death and
2) written payment instructions or election of spousal or beneficiary contract  
continuation.                                                                   

DUE PROOF OF DEATH -- (i) a copy of a certified death certificate; (ii) a copy  
of a certified decree of a court of competent jurisdiction as to the finding of 
death; (iii) a written statement by a medical doctor who attended the deceased; 
or (iv) any other proof satisfactory to us.                                     

FIXED ACCOUNT -- an account that consists of all of the assets under this       
Contract other than those in the Separate Account. The Fixed Account is part of 
the general assets of the Company.                                              

HOME OFFICE -- the Home Office of The Travelers Insurance Company or any other  
office that we may designate for the purpose of administering this Contract.    

MATURITY DATE -- the date on which the Annuity Payments are to begin.           

PAYMENT OPTION -- an annuity option elected under your Contract.                

PURCHASE PAYMENT -- any premium paid by you to initiate or supplement this      
Contract.                                                                       

QUALIFIED CONTRACT -- a contract used in a retirement plan or program that is   
intended to qualify under Sections 401, 403, or 408 of the Code.                

SEPARATE ACCOUNT -- a segregated account registered with the Securities and     
Exchange Commission ("SEC"), the assets of which are invested solely in the     
Underlying Funds. The assets of the Separate Account are held exclusively for   
the benefit of Contract Owners.                                                 

SUBACCOUNT -- that portion of the assets of a Separate Account that is allocated
to a particular Underlying Fund.                                                

UNDERLYING FUND -- a portfolio of an open-end management investment company that
is registered with the SEC in which the Subaccounts invest.                     

VALUATION DATE -- a date on which a Subaccount is valued.                       

VALUATION PERIOD -- the period between successive valuations.                   

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VARIABLE FUNDING OPTION -- a Subaccount of the Separate Account that invests in 
an Underlying Fund.                                                             

WE, US, OUR -- The Travelers Insurance Company                                  

WRITTEN REQUEST -- written information sent to us in a form and content         
satisfactory to us and received at our Home Office.                             

YOU, YOUR -- the Contract Owner.                                                

WRITTEN REQUEST -- written information sent to us in a form and content         
satisfactory to us and received at our Home Office.                             

YOU, YOUR -- the Contract Owner.                                                

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SUMMARY:

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 CONTRACT? We designed the Contract 
for retirement savings or other long-term investment purposes. The Contract     
provides a choice of death benefits 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, that is part of our general account (the "Fixed Account"). We
guarantee money directed to the Fixed Account as to principal and interest. The 
Variable Funding Options fluctuate with the investment performance of the       
Underlying Funds and are 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 (annuity period). 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 non-qualified 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 one of a number of annuity options. You 
may receive annuity payments from the Variable Funding Options and/or the Fixed 
Account. If you elect variable Annuity Payments, the dollar amount of your      
payments may increase or decrease. Once you choose one of the annuity options   
and begin to receive payments, it cannot be changed.                            

WHO CAN PURCHASE THIS CONTRACT? The Contract is currently available for use in  
connection with (1) individual non-qualified purchases; (2) Individual          
Retirement Annuities (IRAs); (3) other qualified retirement plans and (4)       
beneficiary-directed transfers of death proceeds from another contract.         
Qualified Contracts include Contracts qualifying under Section 401(a), 403(b),  
or 408(b) of the Internal Revenue Code of 1986, as amended. Purchase of this    
Contract through a tax qualified retirement plan ("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 this Contract for its Death Benefit, Annuity Option Benefits, and    
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 non-qualified Contracts, the minimum initial Purchase Payment is $1,000, and
$100 thereafter. No additional payments are allowed if the Contract is purchased
with a beneficiary-directed transfer of death proceeds.                         

The ages of the owner and annuitant determine which death benefits and certain  
optional features are available to you. See the Annuity Contract section for    
more information.                                                               

CAN I EXCHANGE MY CURRENT ANNUITY CONTRACT FOR THIS CONTRACT? The Code generally
permits you to exchange one annuity contract for another in a "tax-free         
exchange." Therefore, you can transfer the proceeds from another annuity        
contract to purchase this Contract. Before making an exchange to acquire this   
Contract, you should carefully compare this Contract to your current contract.  
You may have to pay a surrender charge under your current contract to exchange  
it for this Contract, and this Contract has its own surrender charges that would
apply to you. The other fees and charges under this Contract may be higher or   
lower and the benefits may be different than those of your current contract. In 
addition, you may have to pay federal income or penalty taxes on the exchange if
it does not qualify for tax-free treatment. You should not exchange another     
contract for this Contract unless you determine, after evaluating all the facts,
the exchange is in your best interests. Remember that the person selling you the
Contract generally will earn a commission on the sale.                          

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."                                                                    

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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 your Contract Value plus
any Contract charges and premium taxes you paid (but not fees and charges       
assessed by the Underlying Funds). Where state law requires a different right to
return period, or the return of Purchase Payments, the Company will comply. You 
bear the investment risk on the Purchase Payment allocated to a Variable Funding
Option during the right to return period; therefore, the Contract Value we      
return may be greater or less than your Purchase Payment.                       

If you purchased your Contract as an Individual Retirement Annuity, and you     
return it within the first seven days after delivery, or longer if your state   
law permits, we will refund your full Purchase Payment. During the remainder of 
the right to return period, we will refund your Contract Value (including       
charges we assessed). We will determine your Contract Value at the close of     
business on the day we receive a Written Request for a refund.                  

CAN YOU GIVE A GENERAL DESCRIPTION OF THE VARIABLE FUNDING OPTIONS AND HOW THEY 
OPERATE? The Variable Funding Options represent Subaccounts of The Separate     
Account. At your direction, the Separate Account, through its Subaccounts, uses 
your Purchase Payments to purchase shares of one or more of the Underlying Funds
that holds securities consistent with its own investment policy. Depending on   
market conditions, you may make or lose money in any of these Variable Funding  
Options.                                                                        

You can transfer among the Variable Funding Options as frequently as you wish   
without any current tax implications. Currently there is no limit to the number 
of transfers allowed. We may, in the future, 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. Please refer to Appendix B for possible restrictions     
between the Fixed Account and the Variable Funding Options.                     

WHAT EXPENSES WILL BE ASSESSED UNDER THE CONTRACT? The Contract has insurance   
features and investment features, and there are costs related to each. We deduct
a mortality and expense (M&E) risk charge daily from the amounts you allocate to
the Separate Account. The M&E is an annual charge and depends on the death      
benefit option you select at purchase. We deduct the M&E at an annual rate of   
1.25% if you select the Standard Death Benefit, and at a rate of 1.40% if you   
select the Annual Step-Up to Age 75 Death Benefit.                              

We also deduct a semiannual Contract administrative charge of $15 until the     
Maturity Date from amounts allocated to the Separate Account. This charge is    
waived if your Contract Value is $60,000 or greater on the date the charge is   
assessed. It is also waived on distribution of proceeds due to death.           

Each Underlying Fund also charges for management costs and other expenses.      

If you withdraw or commute amounts from the Contract, we may deduct a withdrawal
charge. The charge equals 5% of each Purchase Payment withdrawn if withdrawn    
within 5 years of the payment date.                                             

If you select the Guaranteed Minimum Withdrawal Benefit ("GMWB"), a maximum of  
1.00% annually will be deducted from amounts in the Variable Funding Options.   
The current charge is 0.40%.                                                    

If you select and are eligible for the Managed Advisory Portfolio Program, which
is an asset allocation program, the maximum charge is 0.80% annually deducted   
from amounts in the Variable Funding Options.                                   

HOW WILL MY PURCHASE PAYMENTS AND WITHDRAWALS BE TAXED? Generally, the payments 
you make to a Qualified Contract during the accumulation phase are made with    
before-tax dollars. Generally, you will be taxed on your Purchase Payments and  
on any earnings when you make a withdrawal or begin receiving Annuity Payments. 
Under a non-qualified Contract, payments to the Contract are made with after-tax
dollars, and earnings will generally accumulate tax-deferred. You will be taxed 
on these earnings when they are withdrawn from the Contract. 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.                                                    

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.                                                      

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

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WHAT IS THE DEATH BENEFIT UNDER THE CONTRACT? At the time of purchase, you may  
choose the "Standard" Death Benefit or the "Annual Step-Up to Age 75" Death     
Benefit. The death benefit applies upon the first death of the Contract Owner,  
joint owner, or Annuitant. Assuming you are the Annuitant, the death benefit is 
as follows: If you die before the Contract is in the payout phase, the person   
you have chosen as your beneficiary will receive a death benefit. We calculate  
the death benefit value at the close of the business day on which our Home      
Office receives (1) Due Proof of Death and (2) written payment instructions or  
the election of beneficiary contract continuance. Please refer to the Death     
Benefit section in the prospectus for more details.                             

WHERE MAY I FIND OUT MORE ABOUT ACCUMULATION UNIT VALUES? The Condensed         
Financial Information in Appendix A to this prospectus provides more information
about Accumulation Unit values.                                                 

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

   o  DOLLAR COST AVERAGING. This is a program that allows you to invest a fixed
 amount of money in Variable 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.  

o  ASSET ALLOCATION ADVICE. You may be eligible to enter into a separate  
   investment advisory agreement with Tower Square Securities Inc. ("Tower
     Square"), an affiliate of the Company, for the purpose of receiving asset
     allocation advice under Tower Square's Managed Advisory Portfolio Program
    (the "program"). Under the program, participants allocate Contract Value
  according to one of six asset allocation model portfolios developed by
     Standard & Poor's Investment Advisory Services LLC ("Standard & Poor's"),
      an investment adviser that Tower Square engaged to create the Program. The
    program is not a part of the Contract issued by the Company, and you are
      not required to participate in the program. The program is fully described
in a separate disclosure statement prepared by Tower Square.        

o  MANAGED DISTRIBUTION PROGRAM. This optional program allows us to       
automatically calculate and distribute to you, in November of the   
 applicable tax year, an amount that will satisfy the Internal Revenue
    Service's minimum distribution requirements imposed on certain contracts
     once the owner reaches age 70 1/2 or retires. These minimum distributions
occur during the accumulation phase.                                

  o  SPOUSAL CONTRACT CONTINUANCE (SUBJECT TO AVAILABILITY). If your spouse is
   named as an owner and/or beneficiary, and you die prior to the Maturity
     Date, your spouse may elect to continue the Contract as owner rather than
     have the death benefit paid to the beneficiary. This feature applies to a
spousal joint Contract Owner and/or beneficiary only, and is only   
     available to non-qualified Contracts and Individual Retirement Annuities.

o  BENEFICIARY CONTRACT CONTINUANCE (NOT PERMITTED FOR NON-NATURAL        
    BENEFICIARIES). If you die before the Maturity Date, and if the value of
 any beneficiary's portion of the death benefit is between $20,000 and
     $1,000,000 as of the date of your death, that beneficiary(s) may elect to
continue his/her portion of the Contract rather than have the death 
benefit paid to the beneficiary.                                    

   o  SYSTEMATIC WITHDRAWAL OPTION. Before the Maturity Date, you can arrange to
   have money sent to you at set intervals throughout the year. Of course,
    any applicable income and penalty taxes will apply on amounts withdrawn.
Withdrawals in excess of the annual free withdrawal allowance may be
subject to a withdrawal charge.                                     

o  AUTOMATIC REBALANCING. You may elect to have the Company periodically  
      reallocate the values in your Contract to match the rebalancing allocation
selected.                                                           

 o  GUARANTEED MINIMUM WITHDRAWAL BENEFIT ("GMWB" OR "PRINCIPAL GUARANTEE").
   For an additional charge, we will guarantee the periodic return of your
    Purchase Payment. Under this benefit, we will pay you a maximum of 5% or
10% of your Purchase Payment, depending on when you elect to begin  
    receiving the payments, every year until your Purchase Payment have been
     returned in full. We reserve the right not to include subsequent Purchase
      Payments in the calculation of the amount that we guarantee to return. You
must be age 55 or older to elect this benefit.                      

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 FEE TABLE
--------------------------------------------------------------------------------

 ACCOUNTS GIS, QB AND MM
 FUND U AND ITS UNDERLYING FUNDS

The following tables describe the fees and expenses that you will pay when      
buying, owning, and surrendering the Contract. The first table describes the    
fees and expenses that you will pay at the time that you buy the Contract,      
surrender the Contract, or transfer Contract Value between Variable Funding     
Options. Expenses shown do not include premium taxes, which may be applicable.  

CONTRACT OWNER TRANSACTION EXPENSES                                             

WITHDRAWAL 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%    

TRANSFER CHARGE.......................................................    $10(1)
(ASSESSED ON TRANSFERS THAT EXCEED 12 PER YEAR)                                 

The next table describes the fees and expenses that you will pay periodically   
during the time that you own the Contract, not including Underlying Fund fees   
and expenses.                                                                   

CONTRACT ADMINISTRATIVE CHARGE                                                  

SEMIANNUAL CONTRACT ADMINISTRATIVE CHARGE..............................  $15(2) 

(ASSESSED ON AMOUNTS ALLOCATED TO THE SEPARATE ACCOUNTS UNTIL THE MATURITY      
DATE.)                                                                          

ANNUAL SEPARATE ACCOUNT CHARGES                                                 
(as a percentage of the average daily net assets of Managed Separate Accounts   
and Fund U)                                                                     

We will assess a mortality and expense risk charge ("M&E"), and a GMWB charge if
you elect the optional GMWB feature. Below is a summary of all charges that may 
apply, depending on the death benefit you select and the optional features you  
select:                                                                         

                                                        [Enlarge/Download Table]

                                                                                                          ANNUAL STEP-UP TO  
                                                                                     STANDARD DEATH         AGE 75 DEATH     
                                                                                        BENEFIT                BENEFIT       
                                                                                  ---------------------  --------------------
                                                                                                                             
Mortality and Expense Risk Charge.................................................         1.25%                 1.40%       
Maximum GMWB Charge (3)...........................................................         1.00%                 1.00%       
Total Annual Separate Account Charges with GMWB Selected..........................         2.25%                 2.40%       

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MANAGED ADVISORY PORTFOLIO PROGRAM                                              

The following table describes the annual investment advisory fee for clients who
enter into an investment advisory agreement to participate in Tower Square's    
Managed Advisory Portfolio Program.                                             

                                      MAXIMUM ANNUAL FEE FOR
CONTRACT VALUE EQUAL TO                          MANAGED ADVISORY             
OR GREATER THAN         BUT LESS THAN       PORTFOLIO PROGRAM(4)      
--------------------------- -----------------  ------------------------         
$0                  $25,000                 0.80%       
$25,000                $50,000                 0.65%          
$50,000                $75,000                 0.50%          
$75,000                $100,000                0.35%          
$100,000+                                       0.20%           

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

(1)  We do not currently assess the transfer charge.                            
(2)  The Semiannual Contract Administrative Charge is waived if your Contract   
  Value is $60,000 or greater on the date the charge is assessed, and from
distribution of proceeds due to death.                                
(3)  The current charge for GMWB is 0.40%                                       
(4)  The annual fee is applied to the participant's current Contract Value. Fees
    payable for participating in the program are deducted on a quarterly basis
from the Contract as a partial surrender.                             

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UNDERLYING FUND EXPENSES AS OF DECEMBER 31, 2003 (UNLESS OTHERWISE INDICATED):  

The first table below shows the range (minimum and maximum) of the total annual 
operating expenses charged by all of the Underlying Funds, before any voluntary 
or contractual fee waivers and/or expense reimbursements. The second table shows
each Underlying Fund's management fee, distribution and/or service fees (12b-1) 
if applicable, and other expenses. The Underlying Funds provided this           
information and we have not independently verified it. More detail concerning   
each Underlying Fund's fees and expenses is contained in the prospectus for each
Underlying Fund. Current prospectuses for the Underlying Funds can be obtained  
by calling 1-800-842-9406.                                                      

MINIMUM AND MAXIMUM TOTAL ANNUAL UNDERLYING FUND OPERATING EXPENSES             

                                                        MINIMUM      MAXIMUM
                                                       ----------    ---------
TOTAL ANNUAL FUND OPERATING EXPENSES                       0.27%        4.72%   
(expenses that are deducted from Underlying Fund                                
assets, including management fees, distribution                                 
and/or service fees (12b-1) fees, and other expenses                            

UNDERLYING FUND FEES AND EXPENSES                                               
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)                                   

                                                        [Enlarge/Download Table]


                                                DISTRIBUTION                             CONTRACTUAL FEE      NET TOTAL    
                                                   AND/OR                  TOTAL ANNUAL      WAIVER            ANNUAL      
                                  MANAGEMENT   SERVICE (12b-1)   OTHER      OPERATING     AND/OR EXPENSE      OPERATING    
UNDERLYING FUND:                      FEE           FEES        EXPENSES     EXPENSES     REIMBURSEMENT       EXPENSES     
-----------------                ------------  ---------------  ---------- ------------  -----------------  ---------------
                                                                                                                           
Capital Appreciation Fund.....       0.75%           --          0.07%        0.82%            --               0.82%(15)  
Dreyfus Stock Index Fund --                                                                                                
   Initial Shares.............       0.25%           --          0.02%        0.27%            --               0.27%      
High Yield Bond Trust.........       0.52%           --          0.13%        0.65%            --               0.65%(1)   
Managed Assets Trust..........       0.50%           --          0.09%        0.59%            --               0.59%(15)  
ALLIANCEBERNSTEIN VARIABLE                                                                                                 
   PRODUCT SERIES FUND, INC.                                                                                               
   AllianceBernstein Premier                                                                                               
     Growth Portfolio -- Class B*    1.00%          0.25%        0.05%        1.30%            --                 -- (2)   
CITISTREET FUNDS, INC.                                                                                                     
   CitiStreet Diversified Bond                                                                                             
     Fund -- Class I..........       0.44%           --          0.11%        0.55%            --               0.55%      
   CitiStreet International                                                                                                
     Stock Fund -- Class I....       0.74%           --          0.16%        0.90%            --               0.90%      
   CitiStreet Large Company                                                                                                
     Stock Fund -- Class I....       0.53%           --          0.10%        0.63%            --               0.63%      
   CitiStreet Small Company                                                                                                
     Stock Fund -- Class I....       0.60%           --          0.19%        0.79%            --               0.79%      
DELAWARE VIP TRUST                                                                                                         
   Delaware VIP REIT Series --                                                                                             
     Standard Class...........       0.75%           --          0.11%        0.86%            --               0.86%(3)   
DREYFUS VARIABLE INVESTMENT FUND                                                                                           
   Dreyfus Variable Investment                                                                                             
     Fund -- Developing Leaders                                                                                            
     Portfolio -- Initial Shares     0.75%           --          0.07%        0.82%            --               0.82%      

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                                                DISTRIBUTION                             CONTRACTUAL FEE      NET TOTAL    
                                                   AND/OR                  TOTAL ANNUAL      WAIVER            ANNUAL      
                                  MANAGEMENT   SERVICE (12b-1)   OTHER      OPERATING     AND/OR EXPENSE      OPERATING    
UNDERLYING FUND:                      FEE           FEES        EXPENSES     EXPENSES     REIMBURSEMENT       EXPENSES     
-----------------                ------------  ---------------  ---------- ------------  -----------------  ---------------
                                                                                                                           
FRANKLIN TEMPLETON VARIABLE                                                                                                
   INSURANCE PRODUCTS TRUST                                                                                                
   Franklin Small Cap Fund --                                                                                              
     Class 2 Shares*..........       0.51%          0.25%        0.29%        1.05%                             1.05%(4)   
   Mutual Shares Securities                                                                                                
     Fund -- Class 2 Shares*..       0.60%          0.25%        0.20%        1.05%            --               1.05%(5)   
   Templeton Developing Markets                                                                                            
     Securities Fund --                                                                                                    
     Class 2 Shares*..........       1.25%          0.25%        0.30%        1.80%            --               1.80%      
   Templeton Foreign Securities                                                                                            
     Fund -- Class 2 Shares*..       0.69%          0.25%        0.22%        1.16%                             1.16%(6)   
   Templeton Global Asset                                                                                                  
     Allocation Fund --                                                                                                    
     Class 1 Shares...........       0.61%           --          0.21%        0.82%            --                 --(6)(22)
   Templeton Growth Securities                                                                                             
     Fund -- Class 1 Shares...       0.81%           --          0.07%        0.88%            --               0.88%(8)   
GREENWICH STREET SERIES FUND                                                                                               
   Appreciation Portfolio.....       0.75%           --          0.02%        0.77%            --               0.77%      
   Fundamental Value Portfolio       0.75%           --          0.02%        0.77%            --               0.77%      
JANUS ASPEN SERIES                                                                                                         
   International Growth                                                                                                    
     Portfolio -- Service                                                                                                  
     Shares*..................       0.65%          0.25%        0.11%        1.01%            --               1.01%      
LAZARD RETIREMENT SERIES, INC.                                                                                             
   Lazard Retirement Small Cap                                                                                             
     Portfolio*...............       0.75%          0.25%        0.37%        1.37%                             1.37%(9)   
MANAGED SEPARATE                                                                                                           
   ACCOUNTS                                                                                                                
   Travelers Growth and Income                                                                                             
     Stock Account for Variable                                                                                            
     Annuities (GIS)..........       0.65%           --            --         0.65%            --               0.65%      
   Travelers Money Market                                                                                                  
     Account for Variable                                                                                                  
     Annuities (MM)...........       0.32%           --            --         0.32%            --               0.32%      
   Travelers Quality Bond                                                                                                  
     Account for Variable                                                                                                  
     Annuities (QB)...........       0.32%           --            --         0.32%                             0.32%      
PIMCO VARIABLE INSURANCE TRUST                                                                                             
   Total Return Portfolio --                                                                                               
     Administrative Class*....       0.25%          0.15%        0.26%        0.66%          0.01%              0.65%(10)  
PUTNAM VARIABLE TRUST                                                                                                      
   Putnam VT Small Cap Value                                                                                               
     Fund -- Class IB Shares*.       0.80%          0.25%        0.12%        1.17%            --               1.17%(11)  
SALOMON BROTHERS VARIABLE                                                                                                  
   SERIES FUNDS INC.                                                                                                       
   All Cap Fund -- Class I....       0.85%           --          0.13%        0.98%            --               0.98%      
   Investors Fund -- Class I..       0.70%           --          0.12%        0.82%            --               0.82%      
   Small Cap Growth Fund --                                                                                                
     Class I..................       0.75%           --          0.51%        1.26%            --               1.26%      


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                                                DISTRIBUTION                             CONTRACTUAL FEE      NET TOTAL     
                                                   AND/OR                  TOTAL ANNUAL      WAIVER            ANNUAL       
                                  MANAGEMENT   SERVICE (12b-1)   OTHER      OPERATING     AND/OR EXPENSE      OPERATING     
UNDERLYING FUND:                      FEE           FEES        EXPENSES     EXPENSES     REIMBURSEMENT       EXPENSES      
-----------------                ------------  ---------------  ---------- ------------  -----------------  --------------- 
                                                                                                                            
THE TRAVELERS SERIES TRUST                                                                                                  
   Disciplined Mid Cap                                                                                                      
     Stock Portfolio..........       0.70%           --          0.12%        0.82%            --               0.82%(12)   
   Lazard International                                                                                                     
     Stock Portfolio..........       0.83%           --          0.17%        1.00%            --               1.00%(15)   
   MFS Mid Cap Growth Portfolio      0.80%           --          0.12%        0.92%            --               0.92%(13)   
   MFS Value Portfolio........       0.75%           --          0.33%        1.08%            --                 --(13)(22)
   Pioneer Fund Portfolio.....       0.75%           --          0.40%        1.15%            --               1.15%(14)   
   Social Awareness                                                                                                         
     Stock Portfolio..........       0.62%           --          0.16%        0.78%            --               0.78%(15)   
   U.S. Government                                                                                                          
     Securities Portfolio.....       0.32%           --          0.10%        0.42%            --               0.42%(15)   
TRAVELERS SERIES FUND INC.                                                                                                  
   MFS Total Return Portfolio.       0.80%           --          0.02%        0.82%            --               0.82%       
   Pioneer Strategic                                                                                                        
     Income Portfolio.........       0.75%           --          0.25%        1.00%            --               1.00%       
   SB Adjustable Rate Income                                                                                                
     Portfolio Smith                                                                                                        
     Barney Class*............       0.60%          0.25%        3.87%        4.72%          3.72%              1.00%(16)   
   Smith Barney Aggressive                                                                                                  
     Growth Portfolio.........       0.80%           --          0.02%        0.82%            --               0.82%       
   Smith Barney Large                                                                                                       
     Capitalization Growth                                                                                                  
     Portfolio................       0.75%           --          0.04%        0.79%            --               0.79%       
   Strategic Equity Portfolio.       0.80%           --          0.04%        0.84%            --               0.84%       
VAN KAMPEN LIFE INVESTMENT TRUST                                                                                            
   Comstock Portfolio                                                                                                       
     Class II Shares*.........       0.60%          0.25%        0.05%        0.90%            --               0.90%       
VARIABLE INSURANCE PRODUCTS FUND                                                                                            
   Equity-Income Portfolio --                                                                                               
     Initial Class............       0.48%           --          0.09%        0.57%            --                 --(17)(22)
   Growth Portfolio --                                                                                                      
     Initial Class............       0.58%           --          0.09%        0.67%            --                 --(18)(22)
VARIABLE INSURANCE PRODUCTS                                                                                                 
   FUND II                                                                                                                  
   Asset Manager Portfolio --                                                                                               
     Initial Class............       0.53%           --          0.10%        0.63%            --                 --(19)(22)
   Contrafund(R) Portfolio --                                                                                               
     Service Class 2*.........       0.58%          0.25%        0.10%        0.93%            --                 --(20)(22)
VARIABLE INSURANCE PRODUCTS                                                                                                 
   FUND III                                                                                                                 
   Mid Cap Portfolio --                                                                                                     
     Service Class 2*.........       0.58%          0.25%        0.12%        0.95%            --                 --(21)(22)
--------------                                                                                                              

*    The 12b-1 fees deducted from these classes cover certain distribution,     
    shareholder support and administrative services provided by intermediaries
(the insurance company, broker dealer or other service provider).     

NOTES                                                                           
(1)   Management fee is based on 0.50% on first $50 million of net assets;    
      0.40% on the next $100 million; 0.30% on the next $100 million and 0.25%
on assets in excess of $250 million. Other expenses include 0.06% 
       administrative services fee the Fund pays to Travelers Insurance Company.
(2)   Total portfolio operating expenses do not reflect Alliance's waiver of a
    portion of its advisory fee. This waiver is effective as of January 1,
   2004 and the fee reduction is expected to continue for a period of at
least five years.                                                 
(3)   The investment advisor for the Delaware VIP REIT Series is Delaware     
      Management Company ("DMC"). For the period May 1, 2002 through April 30,
      2004, the advisor waived its management fee and/or reimbursed the Series
  for expenses to the extent that total expenses (excluding any taxes,
    interest, brokerage fees, and extraordinary expenses) would not exceed
0.95%. Effective May 1, 2004 through April 30, 2005, DMC has      
   contractually agreed to waive its management fee and/or reimburse the
  Series for expenses to the extent that total expenses (excluding any
    taxes, interest, brokerage fees, and extraordinary expenses) would not
exceed 0.95%. Under its Management Agreement, the Series pays a   
   management fee based on average daily net assets as follows: 0.75% on

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       the first $500 million, 0.70% on the next $500 million, 0.65% on the next
  $1,500 million, 0.60% on assets in excess of $2,500 million, all per
year.                                                             
 (4)   While the maximum amount payable under the Fund's Class 2 rule 12b-1 plan
    is 0.35% per year of the Fund's Class 2 average annual net assets, the
    Fund's Board of Trustees (Board) has set the current rate at 0.25% per
  year. The manager has agreed in advance to reduce its fee to reflect
 reduced services resulting from the Fund's investment in a Franklin
  Templeton money fund. This reduction is required by the Board and an
order of the Securities and Exchange Commission. Including such   
reduction, Net Total Annual Operating Expenses are 1.01%.         
 (5)   While the maximum amount payable under the Fund's Class 2 rule 12b-1 plan
    is 0.35% per year of the Fund's Class 2 average annual net assets, the
  Fund's Board of Trustees has set the current rate at 0.25% per year.
(6)   The manager has agreed in advance to reduce its fee to reflect reduced  
   services resulting from the Fund's investment in a Franklin Templeton
    money fund. This reduction is required by the Fund's Board of Trustees
   (Board) and an order of the Securities and Exchange Commission (SEC).
Including such reduction, Net Total Operating Expenses are 1.16%. 
(7)   The Fund administration fee is paid indirectly through the management   
fee.                                                              
(8)   The Fund administration fee is paid indirectly through the management   
fee.                                                              
(9)   The Investment Manager has contractually agreed to waive its fee and, if
 necessary, reimburse the Portfolio through December 31, 2004 to the
  extent Total Annual Portfolio Operating Expenses exceed 1.25% of the
Portfolio's average daily net assets.                             
(10)  "Other Expenses" reflects a 0.25% administrative fee, and 0.01%         
representing the Portfolio's pro rata Trustees' fees. PIMCO has   
       contractually agreed, for the fund's current fiscal year, to reduce total
     annual portfolio operating expenses for the Administrative Class shares
   to the extent they would exceed, due to the payment of organizational
       expenses and Trustees' fees, 0.65% of average daily net assets. Under the
Expense Limitation Agreement, PIMCO may recoup these waivers and  
   reimbursements in future periods, not exceeding three years, provided
 total expenses, including such recoupment, do not exceed the annual
expense limit.                                                    
(11)  There was no fee waiver or expense reimbursement for 2003, but effective
     January 28, 2004 there will be a limit in effect. Effective January 28,
       2004, Putnam Management has agreed to limit its compensation (and, to the
      extent necessary, bear other expenses) through December 31, 2004, to the
    extent that each fund's net expenses as a percentage of its net assets
  exceed the average expense ratio for the fund's Lipper peer group of
funds underlying variable insurance products.                     
(12)  Fund has a voluntary expense cap of 0.95%. Other Expenses include 0.06% 
       administrative services fee the Fund pays to Travelers Insurance Company.
(13)  Fund has a voluntary expense cap of 1.00%. Other Expenses include 0.06% 
       administrative services fee the Fund pays to Travelers Insurance Company.
(14)  Effective 5/1/03, shareholders approved a new Investment Advisory       
  Agreement that increased the management fee from 0.65% to 0.75%. The
   actual Management Fee for the year was a blended rate of 0.72%. Other
expense include 0.06% administrative services fee the Fund pays to
Travelers Insurance Company.                                      
(15)  Fund has a voluntary expense cap of 1.25%. Other Expenses include 0.06% 
       administrative services fee the Fund pays to Travelers Insurance Company.
(16)  Management has contractually agreed to waive fees and/or reimburse      
       expenses through a period of 16 months from October 31, 2003 so that "Net
Annual Operating Expenses" will not exceed 1.00%.                 
(17)  A portion of the brokerage commissions that the fund pays may be        
     reimbursed and used to reduce the fund's expenses. In addition, through
     arrangements with the fund's custodian, credits realized as a result of
uninvested cash balances are used to reduce the fund's custodian  
      expenses. Including these reductions, the total class operating expenses
   would have been 0.56%. These offsets may be discontinued at any time.
(18)  A portion of the brokerage commissions that the fund pays may be        
reimbursed and used to reduce the fund's expenses. Including this 
  reduction, the total class operating expenses would have been 0.64%.
These offsets may be discontinued as any time.                    
(19)  A portion of the brokerage commissions that the fund pays may be        
     reimbursed and used to reduce the fund's expenses. In addition, through
     arrangements with the fund's custodian, credits realized as a result of
uninvested cash balances are used to reduce the fund's custodian  
      expenses. Including these reductions, the total class operating expenses
   would have been 0.62%. These offsets may be discontinued at any time.
(20)  A portion of the brokerage commissions that the fund pays may be        
     reimbursed and used to reduce the fund's expenses. In addition, through
     arrangements with the fund's custodian, credits realized as a result of
uninvested cash balances are used to reduce the fund's custodian  
      expenses. Including these reductions, the total class operating expenses
   would have been 0.90%. These offsets may be discontinued at any time.
(21)  A portion of the brokerage commissions that the fund pays may be          
   reimbursed and used to reduce the fund's expenses. In addition, through
   arrangements with the fund's custodian, credits realized as a result of
      uninvested cash balances are used to reduce the fund's custodian expenses.
     Including these reductions, the total class operating expenses would have
been 0.93%. These offsets may be discontinued at any time.          
(22)  The table below shows the amount of the waiver or reimbursement and the   
      net total annual operating expenses for Underlying Funds that have entered
     into a voluntary fee waiver and/or expense reimbursement arrangement. The
     net total annual operating expense figure reflects the fee waivers and/or
  expense reimbursements that were in effect as of the Underlying Fund's
      fiscal year end. However, as these arrangements are voluntary, they may be
      changed or terminated at any time, in which case the Underlying Fund would
     be subject to different net total annual operating expenses. Without such
waivers performance would be lower.                                 

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                                                                          VOLUNTARY FEE                        
                                                                          WAIVER AND/OR                        
                                                                             EXPENSE         NET TOTAL ANNUAL  
FUNDING OPTION                                                            REIMBURSEMENT     OPERATING EXPENSES 
----------------                                                     -------------------  ---------------------
                                                                                                               
Templeton Global Asset Allocation Fund -- Class 1 Shares............          0.01%                0.81%       
MFS Value Portfolio.................................................          0.08%                1.00%       
Equity-Income Portfolio -- Initial Class............................          0.01%                0.56%       
Growth Portfolio -- Initial Class...................................          0.03%                0.64%       
Asset Manager Portfolio -- Initial Class............................          0.01%                0.62%       
Contrafund(R) Portfolio -- Service Class 2..........................          0.03%                0.90%       
Mid Cap Portfolio -- Service Class 2................................          0.02%                0.93%       

EXAMPLES                                                                        

These examples are intended to help you compare the cost of investing in the    
Contract with the cost of investing in other variable annuity contracts. These  
costs include Contract Owner transaction expenses, Contract fees, separate      
account annual expenses, and Underlying Fund total annual operating expenses.   
These examples do not represent past or future expenses. Your actual expenses   
may be more or less than those shown.                                           

These examples assume that you invest $10,000 in the Contract for the time      
periods indicated and that your investment has a 5% return each year. The       
examples reflect the annual Contract administrative charge, factoring in that   
the charge is waived for contracts over a certain value. Additionally, the      
examples are based on the minimum and maximum Underlying Fund total annual      
operating expenses shown above, and do not reflect any Underlying Fund fee      
waivers and/or expense reimbursements.                                          

The examples assume that you have allocated all of your Contract Value to either
the Underlying Fund with the maximum total annual operating expenses or the     
Underlying Fund with the minimum total annual operating expenses. Your actual   
expenses will be less than those shown if you do not elect all of the available 
optional benefits.                                                              

EXAMPLE 1 -- This example assumes that you have elected the most expensive death
benefit option, and the Guaranteed Minimum Withdrawal Benefit at the maximum    
charge.                                                                         

                                                        [Enlarge/Download Table]

                                              IF CONTRACT IS SURRENDERED AT THE         IF CONTRACT IS NOT SURRENDERED OR     
                                                    END OF PERIOD SHOWN:               ANNUITIZED AT END OF PERIOD SHOWN:     
                                           ---------------------------------------- ------------------------------------------
FUNDING OPTION                             1 YEAR   3 YEARS    5 YEARS   10 YEARS   1 YEAR    3 YEARS    5 YEARS    10 YEARS  
-----------------                          -------- --------- ---------- ---------- --------  --------- ---------- -----------
                                                                                                                              
Underlying Fund with Maximum Total Annual    784      1371      1985       3139       284       871       1485        139     
Operating Expenses                                                                                                            
Underlying Fund with Minimum Total Annual                                                                                     
Operating Expenses                          1218      2605      3931       6491       718       2105      3431        6491    

EXAMPLE 2 -- This example assumes that you have elected the most expensive death
benefit option, and the Guaranteed Minimum Withdrawal Benefit at the current    
charge.                                                                         

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                                              IF CONTRACT IS SURRENDERED AT THE         IF CONTRACT IS NOT SURRENDERED OR     
                                                    END OF PERIOD SHOWN:               ANNUITIZED AT END OF PERIOD SHOWN:     
                                           ---------------------------------------- ------------------------------------------
FUNDING OPTION                             1 YEAR   3 YEARS    5 YEARS   10 YEARS   1 YEAR    3 YEARS    5 YEARS    10 YEARS  
-----------------                          -------- --------- ---------- ---------- -------- ---------- ---------- -----------
                                                                                                                              
Underlying Fund with Maximum Total Annual                                                                                     
Operating Expenses                           724      1192      1685       2545       224       692       1185        2545    
Underlying Fund with Minimum Total Annual                                                                                     
Operating Expenses                          1161      2449      3695       6133       661      1949       3195        6133    

EXAMPLE 3 -- This example assumes that you have elected the most expensive death
benefit option, the Guaranteed Minimum Withdrawal Benefit at the current charge,
and the MAPP program at the maximum fee. Under the MAPP program, you choose to  
enter into a separate investment advisory agreement with Tower Square for the   
purpose of receiving asset allocation advice. The program is not a part of the  
Contract issued by the Company.                                                 

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                                              IF CONTRACT IS SURRENDERED AT THE         IF CONTRACT IS NOT SURRENDERED OR     
                                                    END OF PERIOD SHOWN:               ANNUITIZED AT END OF PERIOD SHOWN:     
                                           ---------------------------------------- ------------------------------------------
FUNDING OPTION                             1 YEAR   3 YEARS    5 YEARS   10 YEARS   1 YEAR    3 YEARS    5 YEARS    10 YEARS  
-----------------                          -------- --------- ---------- ---------- --------  --------- ---------- -----------
                                                                                                                              
Underlying Fund with Minimum Total Annual                                                                                     
Operating Expenses                           804      1431      2082       3328       304       931       1582        3328    
Underlying Fund with Maximum Total Annual                                                                                     
Operating Expenses                          1237      2657      4008       6605       737       2157      3508        6605    

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

No condensed financial information is shown because, as of December 31, 2003,   
the Variable Funding Options had not yet commenced operation.                   

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

Universal Annuity Advantage is a Contract between the Contract Owner ("you") and
the Company. This is the prospectus -- it is not the Contract. The prospectus   
highlights many Contract provisions to focus your attention on the Contract's   
essential features. Your rights and obligations under the Contract will be      
determined by the language of the Contract itself. When you receive your        
Contract, we suggest you read it promptly and carefully. There may be           
differences in your Contract from the descriptions in this prospectus because of
the requirements of the state where we issued your Contract. We will include any
such differences in your Contract.                                              

The Company offers several different annuities that your investment professional
may be authorized to offer to you. Each annuity offers different features and   
benefits that may be appropriate for you. In particular, the annuities differ   
based on variations in the standard and optional death benefit protection       
provided for your beneficiaries, the availability of optional living benefits,  
the ability to access your Contract Value if necessary and the charges that you 
will be subject to if you make a withdrawal or surrender the annuity. The       
separate account charges and other charges may be different between each annuity
we offer. Optional death benefits and living benefits are subject to a separate 
charge for the additional protections they offer to you and your beneficiaries. 
Furthermore, annuities that offer greater flexibility to access your Contract   
Value generally are subject to higher separate account charges than annuities   
that deduct charges if you make a withdrawal or surrender.                      

We encourage you to evaluate the fees, expenses, benefits and features of this  
annuity against those of other investment products, including other annuity     
products offered by us and other insurance companies. Before purchasing this or 
any other investment product you should consider whether the product you        
purchase is consistent with your risk tolerance, investment objectives,         
investment time horizon, financial and tax situation, liquidity needs and how   
you intend to use the annuity.                                                  

You make Purchase Payments to us and we credit them to your Contract. We promise
to pay you an income, in the form of Annuity 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. We may also offer a Fixed Account option. Where permitted by   
law, we reserve the right to restrict Purchase Payments into the Fixed Account  
whenever the credited interest rate on the Fixed Account is equal to the minimum
guaranteed interest rate specified under the Contract. The Contract Owner       
assumes the risk of gain or loss according to the performance of the Variable   
Funding Options. The Contract Value is the amount of Purchase Payments, plus or 
minus any investment experience on the amounts you allocate to the Separate     
Account ("Separate Account Contract Value") or interest on the amounts you      
allocate to the Fixed Account ("Fixed Account Contract Value"). The Contract    
Value also reflects all withdrawals made and charges deducted. There is         
generally no guarantee that at the Maturity Date the Contract 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.     

Certain changes and elections must be made in writing to the Company. Where the 
term "Written Request" is used, it means that you must send written information 
to our Home Office in a form and content satisfactory to us.                    

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The ages of the owner and Annuitant determine which death benefits and certain  
optional features are available to you.                                         

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                                           MAXIMUM AGE BASED ON THE OLDER OF THE OWNER 
        DEATH BENEFIT/OPTIONAL FEATURE         AND ANNUITANT ON THE CONTRACT DATE      
----------------------------------------  ---------------------------------------------
                                                                                       
Standard Death Benefit                                          85                     

Annual Step-Up to Age 75 Death Benefit                          75                     

Since optional death benefits carry higher charges, you should consider the ages
of the owner and Annuitant when electing these benefits, as the additional value
provided by the benefit may be significantly reduced or eliminated depending on 
the ages of the owner and Annuitant at the time of election.                    

Purchase of this Contract through a tax qualified retirement plan or IRA does   
not provide any additional tax deferral benefits beyond those provided by the   
plan or the IRA. Accordingly, if you are purchasing this Contract through a plan
or IRA, you should consider purchasing this Contract for its Death Benefit,     
Annuity Option Benefits, and other non-tax-related benefits. You should consult 
with your financial adviser to determine if this Contract is appropriate for    
you.                                                                            

CONTRACT OWNER INQUIRIES                                                        

Any questions you have about your Contract should be directed to our Home Office
at 1-800-842-9406.                                                              

PURCHASE PAYMENTS                                                               

Your initial Purchase Payment is due and payable before the Contract becomes    
effective. Minimum Purchase Payment amounts are:                                

o    IRAs: $1,000; minimum of $100 for subsequent payment             

o    other Qualified Contracts: $20                                   

o    non-qualified Contracts: $1,000; minimum of $100 for subsequent  
payment                                                     

Any Purchase Payment that would cause the aggregate Purchase Payments under the 
Contract to exceed $1,000,000 are subject to our approval at our Home Office.   
Additional Purchase Payments are not permitted for Contracts purchased with a   
beneficiary-directed transfer of death benefit proceeds. We may restrict        
Purchase Payments into the Fixed Account whenever the current credited interest 
rate for the Fixed Account is equal to the minimum guaranteed rate specified in 
your Contract.                                                                  

We will apply the initial Purchase Payment less any applicable premium tax      
within two business days after we receive it in good order at our Home Office.  
We will credit subsequent Purchase Payments to a Contract on the same business  
day we receive it, if it is 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 for regular trading (except when trading is restricted due to an emergency 
as defined by the Securities and Exchange Commission).                          

ACCUMULATION UNITS                                                              

The period between the Contract 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. Each Variable 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     
daily change in the value of an Accumulation Unit each day is based on the      
investment performance of the corresponding Underlying Fund, and the deduction  
of separate account charges shown in the Fee Table in this prospectus. 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 Variable 
Funding Option by the value of its Accumulation Unit. We calculate the value of 
an Accumulation Unit for each Variable 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.    

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THE VARIABLE FUNDING OPTIONS                                                    

You choose the Variable Funding Options to which you allocate your Purchase     
Payments. These Variable Funding Options are Subaccounts of the Separate        
Account. The Subaccounts invest in the Underlying Funds. You are not investing  
directly in the Underlying Fund. Each Underlying Fund is a portfolio of an      
open-end management investment company that is registered with the SEC under the
Investment Company Act of 1940. These Underlying Funds are not publicly traded  
and are offered only through variable annuity and variable life insurance       
products. They are not the same retail mutual funds as those offered outside of 
a variable annuity or variable life insurance product, although the investment  
practices and fund names may be similar, and the portfolio managers may be      
identical. Accordingly, the performance of the retail mutual fund is likely to  
be different from that of the Underlying Fund, and Contract Owners should not   
compare the two.                                                                

The Underlying Funds offered though this product are selected by the Company    
based on several criteria, including asset class coverage, the strength of the  
manager's reputation and tenure, brand recognition, performance, and the        
capability and qualification of each sponsoring investment firm. Another factor 
the Company considers during the initial selection process is whether the       
Underlying Fund or an affiliate of the Underlying Fund will compensate the      
Company for providing administrative, marketing, and support services that would
otherwise be provided by the Fund, the Fund's investment advisor, or its        
distributor. Finally, when the Company develops a variable annuity product in   
cooperation with a fund family or distributor (e.g. a "private label" product), 
the Company will generally include Underlying Funds based on recommendations    
made by the fund family or distributor, whose selection criteria may differ from
the Company's selection criteria.                                               

Each Underlying Fund is reviewed periodically after having been selected. Upon  
review, the Company may remove an Underlying Fund or restrict allocation of     
additional Purchase Payments to an Underlying Fund if the Company determines the
Underlying Fund no longer meets one or more of the criteria and/or if the       
Underlying Fund has not attracted significant contract owner assets.            

In addition, if any of the Underlying Funds become unavailable for allocating   
Purchase Payments, or if we believe that further investment in an Underlying    
Fund 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.                              

YOU WILL FIND DETAILED INFORMATION ABOUT THE UNDERLYING FUNDS AND THEIR INHERENT
RISKS IN THE CURRENT PROSPECTUSES FOR THE UNDERLYING FUNDS. SINCE EACH OPTION   
HAS VARYING DEGREES OF RISK, PLEASE READ THE PROSPECTUSES CAREFULLY. THERE IS NO
ASSURANCE THAT ANY OF THE UNDERLYING FUNDS WILL MEET ITS INVESTMENT OBJECTIVES. 
CONTACT YOUR REGISTERED REPRESENTATIVE OR CALL 1-800-842-9406 TO REQUEST COPIES 
OF THE PROSPECTUSES.                                                            

ADMINISTRATIVE, MARKETING AND SUPPORT SERVICE FEES. As described above, the     
Company and TDLLC have arrangements with the investment adviser, subadviser,    
distributor, and/or affiliated companies of most of the Underlying Funds under  
which the Company and TDLLC receive payments in connection with our provision of
administrative, marketing or other support services to the Funds. Proceeds of   
these payments may be used for any corporate purpose, including payment of      
expenses that the Company and TDLLC incur in promoting, issuing, distributing   
and administering the contracts. The Company and its affiliates may profit from 
these fees.                                                                     

The payments are generally based on a percentage of the average assets of each  
Underlying Fund allocated to the Variable Funding Options under the Contract or 
other contracts offered by the Company. The amount of the fee that an Underlying
Fund and its affiliates pay the Company and/or the Company's affiliates is      
negotiated and varies with each Underlying Fund. Aggregate fees relating to the 
different Underlying Funds may be as much as 0.60% of the average net assets of 
an Underlying Fund attributable to the relevant contracts. A portion of these   
payments may come from revenue derived from the Distribution and/or Service Fees
(12b-1 fees) that are paid by an Underlying Fund out its assets as part of its  
Total Annual Operating Expenses.                                                

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The current Variable Funding Options are listed below, along with their         
investment advisers and any subadviser:                                         

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               FUNDING                                 INVESTMENT                              INVESTMENT              
                OPTION                                  OBJECTIVE                          ADVISER/SUBADVISER          
---------------------------------------  ----------------------------------------  ------------------------------------
                                                                                                                       
Capital Appreciation Fund                Seeks growth of capital. The Fund         Travelers Asset Management          
                                         normally invests in equity securities     International Company LLC ("TAMIC") 
                                         of issuers of any size and in any         Subadviser: Janus Capital Corp.     
                                         industry.                                                                     

Dreyfus Stock Index Fund -- Initial      Seeks to match the total return of the    The Dreyfus Corporation             
Shares                                   S&P 500 Index. The Fund normally          Subadviser: Mellon Equity           
                                         invests in all 500 stocks in the S&P      Associates                          
                                         500 in proportion to their weighting                                          
                                         in the index.                                                                 

High Yield Bond Trust                    Seeks high current income. The Fund       Travelers Asset Management          
                                         normally invests in below                 International Company LLC ("TAMIC") 
                                         investment-grade bonds and debt                                               
                                         securities.                                                                   

Managed Assets Trust                     Seeks high total return. The Fund         Travelers Asset Management          
                                         normally invests in equities,             International Company LLC ("TAMIC") 
                                         convertible and fixed-income              Subadviser: Travelers Investment    
                                         securities. The Fund's policy is to       Management Company ("TIMCO")        
                                         allocate investments among asset                                              
                                         classes.                                                                      

ALLIANCEBERNSTEIN VARIABLE PRODUCT                                                                                     
   SERIES FUND, INC.                                                                                                   
   AllianceBernstein Premier Growth      Seeks growth of capital. The Fund         Alliance Capital Management L.P.    
     Portfolio -- Class B                normally invests in equity securities                                         
                                         of a relatively small number of                                               
                                         intensely researched U.S. companies.                                          

CITISTREET FUNDS, INC.                                                                                                 
   CitiStreet Diversified Bond Fund      Seeks maximum long term total return.     CitiStreet Funds Management LLC     
     -- Class I                          The Fund normally invests in fixed        ("CitiStreet")                      
                                         income securities.                        Subadviser: Western                 
                                                                                   AssetManagement Company; Salomon    
                                                                                   Brothers Asset Management           
                                                                                   ("SBAM"); and SSgA Funds            
                                                                                   Management ("SSgA")                 

   CitiStreet International Stock        Seeks maximum long term total return.     CitiStreet                          
     Fund -- Class I                     The Fund normally invests in the          Subadviser: Bank of Ireland Asset   
                                         common stocks of established non-U.S.     Management (U.S.) Limited;          
                                         companies.                                Citigroup Asset Management          
                                                                                   Limited, and SSgA                   

   CitiStreet Large Company Stock        Seeks maximum long term total return.     CitiStreet                          
     Fund -- Class I                     The Fund normally invests in the          Subadviser: Wellington Management   
                                         common stocks of large, well              Company; Smith Barney Fund          
                                         established companies.                    Management LLC, and SSgA            

   CitiStreet Small Company Stock        Seeks maximum long term total return.     CitiStreet                          
     Fund -- Class I                     The Fund normally invests in the          Subadviser: TCW Investment          
                                         common stocks of small companies.         Management; SBAM; and SSgA          

DELAWARE VIP TRUST                                                                                                     
   Delaware VIP REIT Series --           Seeks to achieve maximum long term        Delaware Management Company         
     Standard Class                      total return with capital appreciation    ("Delaware")                        
                                         as a secondary objective. The Fund                                            
                                         normally invests in companies that                                            
                                         manage a portfolio of real estate to                                          
                                         earn profits for shareholders (REITS).                                        

DREYFUS VARIABLE INVESTMENT FUND                                                                                       
   Dreyfus Variable Investment Fund      Seeks to maximize capital                 The Dreyfus Corporation             
     -- Developing Leaders Portfolio     appreciation. The Fund normally                                               
     -- Initial Shares                   invests in companies with market                                              
                                         capitalizations of less than $2                                               
                                         billion at the time of purchase.                                              

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               FUNDING                                 INVESTMENT                              INVESTMENT              
                OPTION                                  OBJECTIVE                          ADVISER/SUBADVISER          
---------------------------------------  ----------------------------------------  ------------------------------------
                                                                                                                       
FRANKLIN TEMPLETON VARIABLE INSURANCE                                                                                  
   PRODUCTS TRUST                                                                                                      
   Franklin Small Cap Fund --            Seeks long-term capital growth. The       Franklin Advisers, Inc.             
     Class 2 Shares                      Fund normally invests in small                                                
                                         capitalization companies.                                                     

   Mutual Shares Securities Fund --      Seeks capital appreciation. Income is     Franklin Mutual Advisers, LLC       
     Class 2 Shares                      a secondary objective. The Fund                                               
                                         normally invests in equity securities                                         
                                         of companies believed to be                                                   
                                         undervalued.                                                                  

   Templeton Developing Markets          Seeks long-term capital appreciation.     Templeton Asset Management Ltd.     
     Securities Fund -- Class 2 Shares   The Fund normally invests in the                                              
                                         investments of emerging market                                                
                                         countries, primarily equity securities.                                       

   Templeton Foreign Securities Fund     Seeks long-term capital growth. The       Templeton Investment Counsel, LLC   
     -- Class 2 Shares                   Fund normally invests in investments,                                         
                                         primarily equity securities, of                                               
                                         issuers located outside of the U.S.,                                          
                                         including those in emerging markets.                                          

   Templeton Global Asset Allocation     Seeks high total return. The Fund         Templeton Investment Counsel, LLC   
     Fund -- Class 1 Shares              normally invests in equity securities                                         
                                         of companies in any country, debt                                             
                                         securities of companies and                                                   
                                         governments of any country, and in                                            
                                         money market instruments and it may                                           
                                         invest in high-yield, lower rated                                             
                                         bonds.                                                                        

   Templeton Growth Securities Fund      Seeks long-term capital growth. The       Templeton Global Advisors Limited   
     -- Class 1 Shares                   Fund normally invests in equity                                               
                                         securities of companies located                                               
                                         anywhere in the world, including the                                          
                                         U.S. and emerging markets.                                                    

GREENWICH STREET SERIES FUND                                                                                           
   Appreciation Portfolio                Seeks long- term appreciation of          Smith Barney Fund Management LLC    
                                         capital. The Fund normally invests in     ("SBFM")                            
                                         equity securities of U.S. companies.                                          

   Fundamental Value Portfolio           Seeks long-term capital growth.           SBFM                                
                                         Current income is a secondary                                                 
                                         consideration. The Fund normally                                              
                                         invests in common stocks, and common                                          
                                         stock equivalents of companies,                                               
                                         believed to be undervalued.                                                   

JANUS ASPEN SERIES                                                                                                     
   International Growth Portfolio --     Seeks long-term growth of capital. The    Janus Capital                       
     Service Shares                      Fund normally invests in securities of                                        
                                         issuers from at least five countries,                                         
                                         excluding the U.S.                                                            

LAZARD RETIREMENT SERIES, INC.                                                                                         
   Lazard Retirement Small Cap           Seeks long-term capital appreciation.     Lazard Asset Management, LLC        
     Portfolio                           The Fund normally invests in equity                                           
                                         securities, principally common stocks,                                        
                                         of relatively small U.S. companies                                            
                                         that are believed to be undervalued                                           
                                         based on their earnings, cash flow or                                         
                                         asset values.                                                                 

MANAGED SEPARATE ACCOUNTS                                                                                              
   Travelers Growth and Income Stock     Seeks long-term accumulation of           Travelers Asset Management          
     Account for Variable Annuities      principal through capital appreciation    International Company LLC ("TAMIC") 
     (GIS)                               and retention of net investment           Subadviser: TIMCO                   
                                         income. The Fund normally invests in                                          
                                         the common stocks of large U.S.                                               
                                         companies based on a quantative                                               
                                         screening process and to mirror the                                           
                                         overall risk, sector weightings and                                           
                                         growth value style characteristics of                                         
                                         the S&P 500 Index.                                                            

   Travelers Money Market Account for    Seeks preservation of capital, a high     TAMIC                               
     Variable Annuities (MM)             degree of liquidity and high current                                          
                                         income. The Fund normally invests in                                          
                                         high quality U.S. dollar denomintaed                                          
                                         money market instruments.                                                     

   Travelers Quality Bond Account for    Seeks current income, moderate capital    TAMIC                               
     Variable Annuities (QB)             volatility and total return. The Fund                                         
                                         normally invests in investment-grade                                          
                                         debt securities and money market                                              
                                         instruments.                                                                  

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               FUNDING                                 INVESTMENT                              INVESTMENT              
                OPTION                                  OBJECTIVE                          ADVISER/SUBADVISER          
---------------------------------------  ----------------------------------------  ------------------------------------
                                                                                                                       
PIMCO VARIABLE INSURANCE TRUST                                                                                         
   Total Return Portfolio --             Seeks maximum total return, consistent    Pacific Investment Management       
     Administrative Class                with preservation of capital and          Company LLC                         
                                         prudent investment management. The                                            
                                         Fund normally invests in intermediate                                         
                                         maturity fixed income securities.                                             

PUTNAM VARIABLE TRUST                                                                                                  
   Putnam VT Small Cap Value Fund --     Seeks capital appreciation. The Fund      Putnam Investment Management        
     Class IB Shares                     normally invests in the common stocks     ("Putnam")                          
                                         of U.S. companies believed to be                                              
                                         undervalued in the market.                                                    

SALOMON BROTHERS VARIABLE SERIES                                                                                       
   FUNDS INC.                                                                                                          
   All Cap Fund -- Class I               Seeks capital appreciation. The Fund      Salomon Brothers Asset Management   
                                         normally invests in common stocks and     ("SBAM")                            
                                         their equivalents of companies                                                
                                         believed to be undervalued in the                                             
                                         marketplace.                                                                  

   Investors Fund -- Class I             Seeks long term growth of capital.        SBAM                                
                                         Secondarily seeks current income. The                                         
                                         Fund normally invests in common stocks                                        
                                         of established companies.                                                     

   Small Cap Growth Fund -- Class I      Seeks long term growth of capital. The    SBAM                                
                                         Fund normally invests in equity                                               
                                         securities of companies with small                                            
                                         market capitalizations.                                                       

THE TRAVELERS SERIES TRUST                                                                                             
   Disciplined Mid Cap Stock Portfolio   Seeks growth of capital. The Fund         TAMIC                               
                                         normally invests in the equity            Subadviser: Travelers Investment    
                                         securities of companies with mid-size     Management Company ("TIMCO")        
                                         market capitalizations.                                                       

   Lazard International Stock            Seeks capital appreciation. The Fund      TAMIC                               
     Portfolio                           normally invests in equity securities     Subadviser: Lazard Asset Management 
                                         of non-U.S. domiciled companies                                               
                                         located in developed markets.                                                 

   MFS Mid Cap Growth Portfolio          Seeks long term growth of capital. The    TAMIC                               
                                         Fund normally invests in equity           Subadviser: MFS                     
                                         securities of companies with medium                                           
                                         market capitalization that are                                                
                                         believed to have above average growth                                         
                                         potential.                                                                    

   MFS Value Portfolio                   Seeks capital appreciation and            TAMIC                               
                                         reasonable income. The Fund normally      Subadviser: MFS                     
                                         invests in income producing equity                                            
                                         securities of companies believed to be                                        
                                         undervalued in the market.                                                    

   Pioneer Fund Portfolio                Seeks reasonable income and capital       TAMIC                               
                                         growth. The Fund normally invests in      Subadviser: Pioneer Investment      
                                         equity securities that are carefully      Management Inc.                     
                                         selected, reasonably priced securities.                                       

   Social Awareness Stock Portfolio      Seeks long term capital appreciation      Smith Barney Fund Management LLC    
                                         and retention of net investment           ("SBFM")                            
                                         income. The Fund normally invests in                                          
                                         equity securities. The Fund seeks                                             
                                         companies that meet certain investment                                        
                                         criteria and social criteria.                                                 

   U.S. Government Securities            Seeks current income, total return and    TAMIC                               
     Portfolio                           high credit quality. The Fund normally                                        
                                         invests in securities issued or                                               
                                         guaranteed by the U.S. Government, its                                        
                                         agencies or instrumentalities.                                                

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               FUNDING                                 INVESTMENT                              INVESTMENT              
                OPTION                                  OBJECTIVE                          ADVISER/SUBADVISER          
---------------------------------------  ----------------------------------------  ------------------------------------
                                                                                                                       
TRAVELERS SERIES FUND INC.                                                                                             
   MFS Total Return Portfolio            Seeks above average income consistent     TIA                                 
                                         with the prudent employment of            Subadviser: MFS                     
                                         capital. Secondarily, seeks growth of                                         
                                         capital and income. The Fund normally                                         
                                         invests in a broad range of equity and                                        
                                         fixed-income securities of both U.S.                                          
                                         and foreign issuers.                                                          

   Pioneer Strategic Income Portfolio    Seeks high current income consistent      TIA                                 
                                         with preservation of capital. The Fund    Subadviser: Putnam Investment       
                                         normally invests in debt securities of    Management, Inc.                    
                                         U.S. and foreign governments and                                              
                                         corporations.                                                                 

   SB Adjustable Rate Income             Seeks high current income and to limit    Smith Barney Fund Management LLC    
     Portfolio Smith Barney Class        the degree of fluctuation of its net                                          
                                         asset value resulting from movements                                          
                                         in interest rates. The Fund normally                                          
                                         invests in adjustable rate securities.                                        

   Smith Barney Aggressive Growth        Seeks long-term capital appreciation.     SBFM                                
     Portfolio                           The Fund normally invests in common                                           
                                         stocks of companies that are                                                  
                                         experiencing, or are expected to                                              
                                         experience, growth in earnings.                                               

   Smith Barney Large Capitalization     Seeks long term growth of capital. The    SBFM                                
     Growth Portfolio                    Fund normally invests in equities, or                                         
                                         similar securities, of companies with                                         
                                         large market capitalizations.                                                 

   Strategic Equity Portfolio            Seeks capital appreciation. The Fund      TIA                                 
                                         normally invests in the equity            Subadviser: Fidelity Management &   
                                         securities, primarily in common stocks    Research Company ("FMR")            
                                         of domestic issuers, and is not                                               
                                         constrained to any particular                                                 
                                         investment style.                                                             

VAN KAMPEN LIFE INVESTMENT TRUST                                                                                       
   Comstock Portfolio Class II Shares    Seeks capital growth and income. The      Van Kampen Asset Management Inc.    
                                         Fund normally invests in common and       ("Van Kampen")                      
                                         preferred stocks, and convertible                                             
                                         securities, of well established                                               
                                         undervalued companies.                                                        

VARIABLE INSURANCE PRODUCTS FUND                                                                                       
   Equity-Income Portfolio -- Initial    Seeks reasonable income. The Fund         Fidelity Management & Research      
     Class                               normally invests in equity securities     Company ("FMR")                     
                                         with a focus on income producing                                              
                                         equities.                                                                     

   Growth Portfolio -- Initial Class     Seeks capital appreciation. The Fund      Fidelity Management & Research      
                                         normally invests in common stocks         Company ("FMR")                     
                                         believed to have above-average growth                                         
                                         potential.                                                                    

VARIABLE INSURANCE PRODUCTS FUND II                                                                                    
   Asset Manager Portfolio -- Initial    Seeks high total return with reduced      Fidelity Management & Research      
     Class                               risk over the long-term. The Fund         Company ("FMR")                     
                                         normally invests by allocating assets                                         
                                         among stocks, bonds and short-term                                            
                                         instruments.                                                                  

   Contrafund(R) Portfolio -- Service      Seeks long term capital appreciation.   Fidelity Management & Research      
     Class 2                             The Fund normally invests in common       Company ("FMR")                     
                                         stocks of companies whose value may                                           
                                         not be fully recognized by the public.                                        
VARIABLE INSURANCE PRODUCTS FUND III                                                                                   
   Mid Cap Portfolio -- Service          Seeks long term growth of capital. The    Fidelity Management & Research      
    Class 2                              Fund normally invests in common stocks    Company ("FMR")                     
                                         of companies with medium market                                               
                                         capitalizations.                                                              

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 FIXED ACCOUNT
--------------------------------------------------------------------------------

We may offer our Fixed Account as a funding option. Please refer to your        
Contract and Appendix B for more information.                                   

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:                            

o    the ability for you to make withdrawals and surrenders under the 
Contracts                                                   

    o    the death benefit paid on the death of the Contract Owner, Annuitant,
or first of the joint owners                                

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

  o    administration of the annuity options available under the Contracts

o    the distribution of various reports to Contract Owners           

Costs and expenses we incur include:                                            

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

 o    sales and marketing expenses including commission payments to your
sales agent and                                             

o    other costs of doing business                                    

Risks we assume include:                                                        

o    that Annuitants may live longer than estimated when the annuity  
factors under the Contracts were established                

     o    that the amount of the death benefit will be greater than the Contract
Value                                                       

o    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.                                                                     

The amount of a charge may not necessarily correspond to the costs associated   
with providing the services or benefits indicated by the designated charge. For 
example, the withdrawal charge we collect may not fully cover all of the sales  
and distribution expenses we actually incur. The amount of any fee or charge is 
not impacted by an outstanding loan. We may also profit on one or more of the   
charges. We may use any such profits for any corporate purpose, including the   
payment of sales expenses.                                                      

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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.          

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

(c)  any Purchase Payments to which withdrawal charges apply (on a    
first-in, first-out basis) and, finally                     

(d)  from any Contract earnings                                       

Unless you instruct us otherwise, we will deduct the withdrawal charge from the 
amount requested.                                                               

We will not deduct a withdrawal charge due to:                                  

o    the death of the Contract Owner or Annuitant with no Contingent  
Annuitant surviving;                                        

    o    minimum distributions (as defined by the Internal Revenue Code) taken
       under our Managed Distribution Program then in effect if elected by
the Contract Owner by written request;                      

o    the start of a Life Annuity option;                              

o    the start of Payments for a Fixed Period of at least a 5-year    
duration;                                                   

o    disability of the Annuitant, subsequent to the Contract Date, as 
        defined by the Internal Revenue Code, for Contracts issued as 403(b)
      Plan; or o a distribution under a Contract issued as a 403(b) plan
       where the Annuitant is over age 55 and retired and the Contract has
    been in effect for at least 5 years. Payment must be made to the
       Contract Owner. Proof of retirement is required if the Annuitant is
under age 65.                                               

FREE WITHDRAWAL ALLOWANCE                                                       

Beginning in the second Contract Year and prior to the Maturity Date, you may   
withdraw up to 10% of the Contract Value annually. We calculate the available   
withdrawal amount as of the end of the previous Contract Year. The free         
withdrawal provision applies to all withdrawals. We reserve the right to not    
permit the provision on a full surrender. You may withdraw the Free Withdrawal  
Allowance during the first Contract Year if taken under a systematic withdrawal 
program.                                                                        

Any withdrawal is subject to federal income taxes on the taxable portion. In    
addition, a 10% federal penalty tax may be assessed on any withdrawal if the    
Contract Owner is under age 59 1/2. You should consult with your tax adviser    
regarding the tax consequences of a withdrawal.                                 

TRANSFER CHARGE                                                                 

We reserve the right to assess a transfer charge of up to $10 on transfers      
exceeding 12 per year. We will notify you in writing at your last known address 
at least 31 days before we impose any such transfer charge.                     

ADMINISTRATIVE CHARGE                                                           

Before the Maturity Date, we deduct a semiannual Contract administrative charge 
of $15 in June and December of each year from amounts allocated to the Separate 
Accounts. This charge is waived if your Contract Value is $60,000 or greater on 
the date the charge would be assessed. It is also waived from distribution of   
proceeds due                                                                    

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to death. The charge compensates us for expenses incurred in establishing and   
maintaining the Contract and we will prorate this charge (i.e., calculate) from 
the date of purchase. We will also prorate this charge if you surrender your    
Contract, or if we terminate your Contract.                                     

MORTALITY AND EXPENSE RISK CHARGE                                               

Each business day, we deduct a mortality and expense risk ("M&E") charge from   
amounts we hold in each Separate Account applicable to the Variable Funding     
Options you select. We reflect the deduction in our calculation of accumulation 
and Annuity Unit values. If you choose the Standard Death Benefit, the M&E      
charge is 1.25% annually. If you select the Annual Step-Up to Age 75 Death      
Benefit, the M&E charge is 1.40% annually. This charge compensates the Company  
for risks assumed, benefits provided and expenses incurred, including the       
payment of commissions to your sales agent.                                     

GUARANTEED MINIMUM WITHDRAWAL BENEFIT CHARGE                                    

If the GMWB option is selected, a charge is deducted each business day from     
amounts held in the Variable Funding Options. The charge equals, on an annual   
basis, a maximum of 1.00% of the amounts held in each Variable Funding Option.  
The current charge is 0.40%. Your current charge will not change unless you     
reset your benefits, at which time we may modify the charge.                    

VARIABLE FUNDING OPTION EXPENSES                                                

We summarized the charges and expenses of the Underlying Funds in the fee table.
Please review the prospectus for each Underlying Fund for a more complete       
description of that fund and its expenses. Underlying Fund expenses are not     
fixed or guaranteed and are subject to change by the Fund.                      

PREMIUM TAX                                                                     

Certain state and local governments charge premium taxes ranging from 0% to 5%, 
depending upon jurisdiction. We are 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 your Contract Value either upon death, 
surrender, annuitization, or at the time you make Purchase Payments to the      
Contract, but no earlier than when we have a tax liability under state law.     

CHANGES IN TAXES BASED UPON PREMIUM OR VALUE                                    

If there is any change in a law assessing taxes against the Company based upon  
premiums, Contract gains or value of the Contract, we reserve the right to      
charge you proportionately for this tax.                                        

ASSET ALLOCATION ADVICE                                                         

If you are a participant in the MAPP Program, there is an additional fee. Please
see the section "Asset Allocation Services" in this prospectus.                 

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 a special 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  
100 First Stamford Place, Stamford, 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.                  

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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 offices are located at One Cityplace,      
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 and MM.                               

                                                        [Enlarge/Download Table]

                        ACCOUNT                                               ANNUAL MANAGEMENT FEE                     
---------------------------------------------------------  -------------------------------------------------------------
                                                                                                                        
Account GIS...........................................                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              
                                                                  (of Account GIS's aggregate net asset value)          
Account QB............................................                0.3233% of average daily net assets               
Account MM............................................                0.3233% of average daily net assets               

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:                                 

                                                        [Enlarge/Download Table]

                ANNUAL                                              AGGREGATE NET ASSET            
           SUBADVISORY FEE                                          VALUE OF THE ACCOUNT           
---------------------------------------                   -----------------------------------------
                                                                                                   
                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                  

TIMCO also acts as investment adviser or subadviser for:                        

o   other investment companies used to fund variable products     

o   individual and pooled pension and profit-sharing accounts     

o   affiliated companies of The Travelers Insurance Company.      

TAMIC also acts as investment adviser or subadviser for:                        

o   other investment companies used to fund variable products     

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

o   nonaffiliated insurance companies.                            

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

Subject to the limitations described below, you may transfer all or part of your
Contract Value between Variable Funding Options at any time up to 30 days before
the Maturity Date. After the Maturity Date, you may make transfers only if      
allowed by your Contract or with our consent. Transfer requests received at our 
Home Office that are in good order before the close of the New York Stock       
Exchange (NYSE) will be processed according to the value(s) next computed       
following the close of business. Transfer requests received on a non-business   
day or after the close of the NYSE will be processed based on the value(s) next 
computed on the next business day.                                              

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Where permitted by state law, we reserve the right to restrict transfers from   
the Variable Funding Options to the Fixed Account whenever the credited interest
rate on the Fixed Account is equal to the minimum guaranteed interest rate      
specified under the Contract. Transfers from the Fixed Account are subject to   
restrictions described in Appendix B.                                           

Currently, there are no charges for transfers; however, we reserve the right to 
charge a $10 fee for any transfer request which exceeds twelve per year. Since  
each Underlying Fund may have different overall expenses, a transfer of Contract
Values from one Variable Funding Option to another could result in your         
investment becoming subject to higher or lower expenses. Also, when making      
transfers, you should consider the inherent risks associated with the Variable  
Funding Options to which your Contract Value is allocated.                      

MARKET TIMING/EXCESSIVE TRADING                                                 

THE CONTRACT IS INTENDED FOR USE AS A LONG-TERM INVESTMENT VEHICLE AND IS NOT   
DESIGNED TO SERVE AS A VEHICLE FOR EXCESSIVE TRADING OR MARKET TIMING IN AN     
ATTEMPT TO TAKE ADVANTAGE OF SHORT-TERM FLUCTUATIONS IN THE STOCK MARKET.       
EXCESSIVE TRADING IS DISRUPTIVE TO THE MANAGEMENT OF AN UNDERLYING FUND AND     
INCREASES OVERALL COSTS TO ALL INVESTORS IN THE UNDERLYING FUND. If, in our sole
discretion, we determine you are engaging in excessive trading activity, trading
activity that we believe is indicative of market timing, or any similar trading 
activity which will potentially hurt the rights or interests of other Contract  
Owners, we will exercise our contractual right to restrict your number of       
transfers to one every six months. We will notify you in writing if we choose to
exercise our contractual right to restrict your transfers.                      

In determining whether we believe you are engaged in excessive trading activity,
we will consider, among other things, the following factors:                    

o    the dollar amount you request to transfer;             

   o    the number of transfers you made within the previous three
months;                                           

 o    whether your transfers follow a pattern designed to take
advantage of short term market fluctuations; and  

          o    whether your transfers are part of a group of transfers made by a
          third party on behalf of several individual Contract Owners.

Transfers made under a Dollar Cost Averaging Program, a rebalancing program, or,
if applicable, any asset allocation program described in this prospectus are not
treated as a transfer when we evaluate trading patterns for market timing or    
excessive trading.                                                              

We also reserve the right to restrict the right to request transfers by any     
market timing firm or any other third party who has been authorized to initiate 
transfers on behalf of multiple Contract Owners. We may, among other things:    

     o    reject the transfer instructions of any agent acting under a
    power of attorney on behalf of more than one owner, or

          o    reject the transfer 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 will notify you in writing before we restrict your right to request transfers
through such market timing firm or other third party.                           

The policy of the Company is to seek to apply its anti-market timing and        
excessive trading procedures uniformly.                                         

FUTURE MODIFICATIONS. We will continue to monitor the transfer activity         
occurring among the Variable Funding Options, and may modify these transfer     
restrictions at any time if we deem it necessary to protect the interest of all 
Contract Owners. These modifications may include curtailing or eliminating,     
without notice, the ability to use the Internet, facsimile or telephone in      
making transfers.                                                               

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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, you will purchase more Accumulation Units in a funding option if the    
value per unit is low and will purchase fewer Accumulation Units if the value   
per unit is high. Therefore, you may achieve a lower-than-average cost per unit 
in the long run if you have the financial ability to continue the program over a
long enough period of time. Dollar cost averaging does not assure a profit or   
protect against a loss.                                                         

You may elect the DCA Program through Written Request or other method acceptable
to us. You must have a minimum total Contract Value of $5,000 to enroll in the  
DCA Program. The minimum amount that may be transferred through this program is 
$400. There is no additional fee to participate in the DCA Program.             

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, within the Fixed Account, we may credit         
increased interest rates to Contract Owners under an administrative Special DCA 
Program established at our discretion, 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 the remaining amounts in the Special DCA Program and we must transfer 
all Purchase Payments and accrued interest on a level basis to the selected     
funding options in 6 months. Under the 12 Month Program, the interest rate can  
accrue up to 12 months on the remaining amounts in the Special DCA Program and  
we must transfer all Purchase Payments and accrued interest in this Program 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 the Company. If we 
do not receive complete Program enrollment instructions within 15 days of       
receipt of the initial Program Purchase Payment, the entire balance in the      
Program will be transferred into the Money Market Variable Funding Option.      

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, we will credit your Contract Value for
the remainder of 6 or 12 months with the interest rate for non-Program funds.   

You may only have one DCA Program or Special DCA Program in place at one time.  
We will allocate any subsequent Purchase Payments we receive within the Program 
period selected to the current funding options over the remainder of that       
Program transfer period, unless you direct otherwise.                           

All provisions and terms of the Contract apply to the DCA and Special DCA       
Programs, including provisions relating to the transfer of money between funding
options. Transfers made under any DCA Program will not be counted for purposes  
of restrictions we may impose on the number of transfers permitted under the    
Contract. We reserve the right to suspend or modify transfer privileges at any  
time and to assess a processing fee for this service.                           

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

GENERAL                                                                         

Asset allocation is a method of investment diversification that allocates assets
among asset classes with the goal of managing investment risk and potentially   
enhancing returns over the long term. An asset class refers to a category of    
investments having similar characteristics, such as stocks/equities, bonds/     
fixed income, and cash equivalents. There are often further divisions among     
wider asset classes, for example, classes representing company size (large cap, 
mid cap, and small cap), and classes representing foreign and U.S. investments. 

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Asset allocation strategies reflect the theory that diversification among asset 
classes can help reduce volatility over the long term. THERE IS NO ASSURANCE    
THAT INVESTMENT RETURNS WILL BE BETTER THROUGH PARTICIPATION IN AN ASSET        
ALLOCATION PROGRAM -- INVESTMENTS MAY STILL LOSE MONEY AND EXPERIENCE           
VOLATILITY.                                                                     

THE ASSET ALLOCATION PROGRAM DESCRIBED BELOW IS NOT A PART OF THE CONTRACT      
ISSUED BY THE COMPANY. THE COMPANY IS NOT REGISTERED AS AN INVESTMENT ADVISER,  
AND IS NOT OFFERING INVESTMENT ADVICE IN MAKING AVAILABLE THE ASSET ALLOCATION  
PROGRAM.                                                                        

MANAGED ADVISORY PORTFOLIO PROGRAM                                              

An affiliate of the Company, Tower Square Securities Inc. ("Tower Square"),     
offers an asset allocation program to participants of qualified retirement plans
who own the Contract individually or are participants in a group Contract owned 
by the plan (collectively, "participants"). The program, called Managed Advisory
Portfolio Program (the "program"), is available for an additional asset-based   
fee that is payable by the participant to Tower Square for offering the program.
These payments are in addition to any compensation payable by the Company to    
Tower Square for selling the Contract. When a participant elects the program    
("program participant"), he or she must enter into an investment advisory       
agreement with Tower Square. Tower Square may not offer the program to all      
purchasers of the Contract.                                                     

THE FOLLOWING IS A GENERAL DESCRIPTION OF THE MANAGED ADVISORY PORTFOLIO PROGRAM
-- A COMPLETE DESCRIPTION IS AVAILABLE IN THE DISCLOSURE STATEMENT FOR THE      
PROGRAM. NOTE: THERE ARE LIMITATIONS ON THE INVESTMENT ADVISORY ACTIVITIES THAT 
TOWER SQUARE'S REPRESENTATIVES CAN PERFORM FOR PROGRAM PARTICIPANTS. PLEASE     
REFER TO THE DISCLOSURE STATEMENT AND OTHER DOCUMENTS THAT TOWER SQUARE IS      
REQUIRED TO PROVIDE TO YOU.                                                     

Except as described below, a program participant must allocate his or her       
Contract Value according to one of six model portfolios developed by Standard & 
Poor's Investment Advisory Services LLC ("Standard & Poor's"), an investment    
adviser that Tower Square engaged to create the program. When electing the      
program, a program participant must complete a standardized questionnaire. Based
on the results of the questionnaire, one of the six model portfolios is matched 
to the program participant based on his or her risk tolerance and investment    
time horizon. The program participant selects from the six model portfolios, and
may select a model portfolio that is different than the recommended model       
portfolio.                                                                      

Each model portfolio has different allocation percentages within each asset     
class, and is intended for a specific type of investor, from highly aggressive  
to very conservative. Each model portfolio identifies one or more Variable      
Funding Options offered under the Contract that correspond to each asset class  
within the model portfolio. A program participant will have his or her Contract 
Value allocated among the Variable Funding Options according to the applicable  
asset class weightings within the model portfolio elected. A program participant
may also choose to create his or her own portfolio by changing the allocation   
percentages within an asset class or by electing different Variable Funding     
Options than those that are recommended in a model portfolio ("customized       
portfolio"). Tower Square's representatives cannot provide investment advice    
related to the creation of a customized portfolio. Furthermore, a program       
participant who chooses to create a customized portfolio will not receive a     
periodic review and changes to his or her portfolio as would be provided by     
Standard & Poor's for the model portfolios, as described below.                 

At least annually, Standard & Poor's reviews the model portfolios and may make  
appropriate changes to the allocation percentages within the asset classes of   
the model portfolios and the recommended Variable Funding Options. If, as a     
result of such review, a change is made to a model portfolio, Tower Square will 
notify program participants in advance of the change, and the participant will  
have the opportunity to reject the change. Standard & Poor's will not           
periodically review customized portfolios chosen by program participants;       
however, those participants will receive written materials from Tower Square    
about the changes being made to the model portfolios, and will be eligible to   
elect a model portfolio at any time.                                            

At any time, a program participant can request a change to his or her model     
portfolio or the allocation of his or her Contract Value amongst the Variable   
Funding Options, or can elect to terminate the program. Tower Square            
representatives will make reasonable efforts to contact program participants at 
least annually to discuss any adjustments to the models and to determine whether
the participant's investment objectives have changed. In addition, program      
participants will receive a quarterly performance report from the Company that  
provides information about the Variable Funding Options.                        

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A program participant can elect to have his or her Contract Value "rebalanced"  
on a monthly, quarterly, semi-annual, or annual basis, to maintain the asset    
allocation percentages originally selected according to the model portfolio or a
customized portfolio.                                                           

A program participant who chooses a model portfolio must allocate 100% of his or
her Contract Value to the Variable Funding Options under the model portfolio    
they have chosen. A program participant who chooses to create a customized      
portfolio may select any Variable Funding Options offered under the Contract,   
and may also utilize the Fixed Account under the Contract (if available).       

PROGRAM FEES -- DEDUCTIONS FROM CONTRACT VALUE                                  

Tower Square charges an annual asset-based fee to participate in the program as 
a percentage of the participant's Contract Value, as described in the table     
below.                                                                          
                                            MAXIMUM ANNUAL FEE FOR
CONTRACT VALUE EQUAL TO                              MANAGED ADVISORY         
OR GREATER THAN           BUT LESS THAN         PORTFOLIO PROGRAM     
---------------------------   -----------------    ------------------------     
$0                    $25,000                   0.80%   
$25,000                  $50,000                   0.65%      
$50,000                  $75,000                   0.50%      
$75,000                  $100,000                  0.35%      
$100,000+                                           0.20%       

The annual fee to participate in the program is in addition to any Contract fees
and charges. Tower Square will charge the same annual fee whether a participant 
elects a model portfolio or creates a customized portfolio. Alternative fees may
be negotiated by the qualified retirement plan and applied to all participants  
who elect the program. Fees payable for participating in the program are        
deducted on a quarterly basis from the Contract as a partial surrender. Partial 
surrenders made to pay program fees will reduce the participant's Contract      
Value, the guaranteed minimum death benefit, and the amount available for free  
withdrawals. PLEASE CONSULT WITH YOUR INVESTMENT PROFESSIONAL TO DISCUSS THE    
PROGRAM.                                                                        

THE COMPANY IS NOT THE SPONSOR OF THE ASSET ALLOCATION PROGRAM DESCRIBED ABOVE. 
HOWEVER, THE COMPANY HAS AGREED TO FACILITATE ADMINISTRATION AND THE COLLECTION 
AND PAYMENT OF INVESTMENT ADVISORY FEES PAYABLE TO TOWER SQUARE UNDER THE TERMS 
OF THE ADVISORY AGREEMENT THAT IT ENTERS INTO WITH PARTICIPANTS. TOWER SQUARE,  
FROM ITS OWN GENERAL REVENUES, PAYS THE COMPANY 0.05% PER YEAR OF ASSETS IN THE 
PROGRAM FOR FACILITATING THE PROCESSING OF THE QUARTERLY FEES.                  

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

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 five     
business days after the Written Request is received. For amounts allocated to   
the Fixed Account, we may defer payment of any Cash Surrender Value for a period
up to six months. In either case, it is our intent to pay as soon as possible.  
We cannot process requests for withdrawals 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.                                      

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.)                                                                

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GUARANTEED MINIMUM WITHDRAWAL BENEFIT ("GMWB" OR "PRINCIPAL GUARANTEE")         

We offer a Guaranteed Minimum Withdrawal Benefit rider ("GMWB Rider") for an    
additional charge. The GMWB Rider guarantees a return of your Purchase Payments 
regardless of market conditions if you do not withdraw more than a certain      
amount per year. Once you elect this benefit, you cannot cancel it. You may     
elect the benefit at time you purchase your Contract, or you may elect to add   
the benefit to your Contract at any time after your Contract Date. You may only 
elect this benefit if you are age 55 or older. GMWB will automatically terminate
upon annuitization or if you assign your Contract to a different Contract Owner.

If you elect the benefit at the time you purchase your Contract, your initial   
Purchase Payment is used to determine your initial remaining benefit base,      
("RBB"), or the maximum amount of money that is guaranteed to be returned to you
subject to the conditions below. If you elect to add the benefit to your        
Contract after your Contract Date, your Contract Value on the date you elect the
benefit is used to determine your initial RBB. The maximum amount you may       
withdraw on an annual basis without an adverse effect on your guarantee is your 
annual withdrawal benefit ("AWB").                                              

If you make your first withdrawal within three full years after the effective   
date of your GMWB, your AWB will equal 5% of your RBB immediately prior to your 
first withdrawal. If you begin making withdrawals more than three complete years
after the effective date of your GMWB, your AWB will equal 10% of your RBB      
immediately prior to your first withdrawal. Your AWB may be taken on any payment
schedule you request, e.g. monthly. You may take withdrawals in any dollar      
amount up to your AWB without affecting your guarantee. If you choose to receive
only a part of or none of your AWB in any given year, your RBB and AWB will not 
increase. You can continue to receive your AWB until the RBB is depleted. If you
take a partial withdrawal, and your AWB is greater than the free withdrawal     
allowance, withdrawal charges are waived only on amounts up to your AWB.        

Your RBB and AWB will not change unless you make subsequent Purchase Payments or
take withdrawals from your Contract, as described below.                        

If you make subsequent payments, we will recalculate your RBB and your AWB. Your
new RBB equals your RBB immediately prior to the subsequent payment plus the    
subsequent payment. We reserve the right not to include subsequent Purchase     
Payments in the calculation of the RBB. When your RBB is adjusted because you   
have made a subsequent Purchase Payment, your AWB is recalculated to equal the  
AWB immediately prior to the subsequent payment, plus either 5% or 10% of the   
subsequent payment, depending on when you have taken your first withdrawal.     

We must consent to any RBB over $1 million. We may impose a maximum RBB in the  
future. We would impose the maximum RBB by excluding subsequent premium payments
from the RBB. Such a maximum would not apply to any RBB to which we previously  
consented. These restrictions may apply differently depending on the state that 
your Contract is issued.                                                        

WITHDRAWALS: If the total of all withdrawals since the most recent Contract Date
anniversary (or for Contract Owners who elect GMWB after the Contract Date, the 
"GMWB election anniversary"), including the current withdrawal, is equal to or  
less than your AWB immediately prior to the current withdrawal, we will         
recalculate your RBB to equal the RBB immediately prior to the withdrawal, less 
the amount of the current withdrawal.                                           

If the total amount of all withdrawals since the most recent Contract Date      
anniversary (or GMWB election anniversary), including the current withdrawal,   
exceed the AWB, we will recalculate both your RBB and AWB by applying a partial 
surrender reduction. The partial surrender reduction is equal to 1) the RBB or  
AWB in effect immediately prior to the current withdrawal, multiplied by 2) the 
amount of the current withdrawal divided by 3) the Contract Value immediately   
prior to the current withdrawal.                                                

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For example, assume your initial Purchase Payment is $100,000 (or for Contract  
Owners who elect GMWB after the Contract Date, your Contract Value on the GMWB  
effective date is $100,000), your age is less than 70, and a withdrawal of      
$10,000 is taken in Contract Year two (or GMWB election year two):              

                                                        [Enlarge/Download Table]


------------------------------------------------------------------------------------------------------------------------------
                               Assumes 15% gain on investment                        Assumes 15% loss on investment           
------------------------------------------------------------------------------------------------------------------------------
                     Contract                                               Contract                                          
                      Value             RBB                AWB (5%)          Value             RBB              AWB (5%)      
------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              
Values as of                                                                                                                  
------------------------------------------------------------------------------------------------------------------------------
Contract Date (or    $100,000         $100,000              $5,000          $100,000        $100,000             $5,000       
GMWB effective                                                                                                                
date)                                                                                                                         
------------------------------------------------------------------------------------------------------------------------------
Immediately prior    $115,000         $100,000              $5,000          $85,000         $100,000             $5,000       
to withdrawal,                                                                                                                
Contract Year two                                                                                                             
(or GMWB election                                                                                                             
year two)                                                                                                                     
------------------------------------------------------------------------------------------------------------------------------
Immediately after    $105,000         $91,304               $4,565          $75,000          $88,235             $4,412       
withdrawal,                                                                                                                   
Contract Year two                   [100,000 --        [5,000 -- (5,000                    [100,000 --      [5,000 -- (5,000  
(or GMWB election                     (100,000         x10,000/115,000)]                    (100,000        x10,000/85,000)]  
year two)                        x10,000/115,000)]                                      x10,000/85,000)]                      
------------------------------------------------------------------------------------------------------------------------------

------------------------------------------------------------------------------------------------------------------------------
Change in Value      $10,000           $8,696                $435           $10,000          $11,765               $588       
Due to Withdrawal                                                                                                             
(Partial                                                                                                                      
Surrender                                                                                                                     
Reduction)                                                                                                                    
------------------------------------------------------------------------------------------------------------------------------

You may choose to reset your RBB to equal your current Contract Value any time  
on or after the 5th Contract Date anniversary if you elect the benefit at the   
time you purchase your Contract (or on or after the 5th GMWB election           
anniversary). Depending on your Contract Value and the current fee for GMWB, it 
may not be beneficial to reset your RBB. Generally, it may be beneficial to     
reset your RBB if your Contract Value exceeds your RBB. However, the current    
charge in effect at the time of the reset will apply which may be higher than   
the current charge. Further, if you reset your RBB, your new AWB may be higher  
or lower than your current AWB. Your second and all subsequent resets must occur
at least 5 years from the most recent reset. If your first withdrawal from the  
Contract is prior to your third Contract Date anniversary (or your 3rd GMWB     
election anniversary), your AWB will equal 5% of your RBB after any reset.      
Similarly, if you began taking withdrawals after your third Contract Year (or   
after your 3rd GMWB election anniversary), your AWB will equal 10% of your RBB  
after any reset. In addition, the length of time over which you can expect to   
receive your RBB will be reset. Once you become eligible to reset your RBB, we  
reserve the right to allow resets only on a contract anniversary (or GMWB       
election anniversary).                                                          

If your Contract Value reaches zero, and you have purchased this benefit, the   
following will occur:                                                           

     o    The AWB will continue to be paid to you until the RBB is depleted, not
        more frequently than monthly. Upon your death, your beneficiary will
receive these payments. No other death benefit will be paid.

o    The total annual payment amount will equal the AWB and will never
exceed your RBB, and                                        

o    We will no longer accept subsequent Purchase Payments into the   
Contract.                                                   

If a spouse or beneficiary continues this Contract upon your death, and you had 
elected GMWB, all terms and conditions of this benefit would apply to the new   
owner.                                                                          

SYSTEMATIC WITHDRAWALS                                                          

Before the Maturity Date, you may choose to withdraw a specified dollar amount  
on a monthly, quarterly, semiannual or annual basis. We will deduct any         
applicable premium taxes and withdrawal charge. To elect this option, you must  
make the election on the form we provide. We will surrender Accumulation Units  
pro rata                                                                        

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from all funding options in which you have an interest, unless you              
instruct us otherwise. You may begin or discontinue systematic withdrawals at   
any time by notifying us in writing, but you must give at least 30 days' notice 
to change any systematic withdrawal instructions that are currently in place.   

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 allowed by state law).                                            

Each systematic withdrawal is subject to federal income taxes on the taxable    
portion. In addition, a 10% federal penalty tax may be assessed on systematic   
withdrawals if the Contract Owner is under age 59 1/2. You should consult with  
your tax adviser regarding the tax consequences of systematic withdrawals.      

MANAGED DISTRIBUTION PROGRAM                                                    

Under the systematic withdrawal option, you may choose to participate in the    
Managed Distribution Program. At no cost to you, you may instruct us to         
calculate and make minimum distributions that may be required by the IRS upon   
reaching age 70 1/2. (See "Federal Tax Considerations.") These payments will not
be subject to the withdrawal charge and will be in lieu of the free withdrawal  
allowance. No Dollar Cost Averaging will be permitted if you are participating  
in the Managed Distribution Program.                                            

LOANS                                                                           

Loans may be available under certain Qualified Contracts. Loans may only be     
taken against funds allocated or transferred to the Fixed Account. If available,
all loan provisions are described in your Contract or loan agreement. You may   
not elect the GMWB benefit and have a loan on your Contract at the same time. If
you anticipate needing a loan, you should not purchase GMWB.                    

OWNERSHIP PROVISIONS
--------------------------------------------------------------------------------

TYPES OF OWNERSHIP                                                              

CONTRACT OWNER                                                                  

The Contract belongs to the Contract Owner named in the Contract (on the        
Contract Specifications page), or to any other person to whom you subsequently  
assign the Contract. You may only make an assignment of ownership or a          
collateral assignment for non-qualified 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 you have not assigned the Contract.                                    

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.                                                                          

If this Contract is purchased by a beneficiary of another contract who directly 
transferred the death proceeds due under that contract, he/she will be granted  
the same rights the owner has under the Contract except that he/she cannot      
transfer ownership, take a loan or make additional Purchase Payments.           

JOINT OWNER. For non-qualified Contracts only, you may name joint owners (e.g., 
spouses) 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 remaining under the Contract upon the death  
of the Annuitant or the Contract Owner. If more than one beneficiary survives   
the Annuitant or Contract Owner, they will share equally in benefits unless you 
recorded different shares 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 not chosen to assume the Contract, we will not    
transfer or otherwise remove the death benefit proceeds from either the Variable
Funding Options or the Fixed Account, as most recently elected by the Contract  
Owner, until the Death Report Date.                                             

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Unless you have named an irrevocable beneficiary 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 Contract Specifications     
page), and is the individual on whose life the Maturity Date and the amount of  
the monthly Annuity Payments depend. You may not change the Annuitant after your
Contract is in effect.                                                          

CONTINGENT ANNUITANT. You may name one individual as a Contingent Annuitant. A  
Contingent Annuitant may not be changed, deleted or added to the Contract after 
the Contract Date. If the Annuitant who is not the owner dies prior to the      
Maturity Date, and the Contingent Annuitant is still living;                    

o    the death benefit will not be payable upon the Annuitant's death 

o    the Contingent Annuitant becomes the Annuitant                   

o    all other rights and benefits will continue in effect            

When a Contingent Annuitant becomes the Annuitant, the Maturity Date remains the
same as previously in effect.                                                   

If the Annuitant is also the owner, a death benefit is paid to the beneficiary  
regardless of whether or not there is a Contingent Annuitant.                   

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

Before the Maturity Date, generally, a death benefit is payable when either the 
Contract Owner or the Annuitant dies and there is no surviving Contingent       
Annuitant. At purchase, you elect either the Standard Death Benefit or the      
Annual Step-Up to Age 75 Death Benefit. We calculate the death benefit at the   
close of the business day on which our Home Office receives (1) Due Proof of    
Death and (2) written payment instructions or election of spousal contract      
continuance or beneficiary contract continuance (Death Report Date).            

Two different types of death benefits are available under the Contract prior to 
the Maturity Date:                                                              

o    Standard Death Benefit                                           

o    Annual Step-Up Death Benefit to Age 75                           

The Annual Step-Up Death Benefit to Age 75 may not be available in all          
jurisdictions.                                                                  

Note: If the owner dies before the Annuitant, the death benefit is recalculated,
replacing all references to "Annuitant" with "owner." All death benefits will be
reduced by any premium tax and outstanding loans not previously deducted.       

DEATH PROCEEDS BEFORE THE MATURITY DATE                                         

STANDARD DEATH BENEFIT                                                          

Upon the death of the Annuitant, the death benefit payable as of the Death      
Report Date will be the greatest of (a), (b) or (c) below, each reduced by any  
applicable premium tax or outstanding loan balance:                             

a)   the Contract Value on the Death Report Date; or                  

b)   the Adjusted Purchase Payment (as described below); or           

  c)   the Five-Year Step-Up Value to Age 75 (if any, as described below).

ADJUSTED PURCHASE PAYMENT                                                       

The initial Adjusted Purchase Payment is equal to the initial Purchase Payment. 
Whenever any additional Purchase Payment(s) are made, the Adjusted Purchase     
Payment is increased by the amount of the Purchase                              

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Payment. Whenever a partial surrender is taken, the Adjusted Purchase Payment is
reduced by a Partial Surrender Reduction as described below.                    

FIVE-YEAR STEP-UP VALUE TO AGE 75                                               

A Step-Up Value will be established on the fifth Contract Date anniversary that 
occurs on or prior to the date of death. The Step-Up Value will initially equal 
the Contract Value on that anniversary. On each Contract Date anniversary that  
occurs five (5) years from when the last Step-Up Value was determined before the
Annuitant's 75th birthday and before the Annuitant's death, if the Contract     
Value is greater than the Step-Up Value, the Step-Up Value will be increased to 
equal the Contract Value. If the Step-Up Value is greater than the Contract     
Value, the Step-Up Value will remain unchanged. Whenever a Purchase Payment is  
made, the Step-Up Value will be increased by the amount of that Purchase        
Payment. Whenever a partial surrender is taken, the Step-Up Value will be       
reduced by a partial Surrender Reduction as described below. The only changes   
made to the Step-Up Value on or after the Annuitant's 75th birthday will be     
those related to additional Purchase Payments or partial surrenders as described
below. If either the Death Report Date or the Annuitant's 75th birthday occurs  
before the fifth Contract Date anniversary, there is no Step-Up Value.          

PARTIAL SURRENDER REDUCTION                                                     

FOR THE ADJUSTED PURCHASE PAYMENT:                                              

A Partial Surrender Reduction is equal to (1) the Adjusted Purchase Payment in  
effect immediately prior to the reduction for the partial surrender, multiplied 
by (2) the amount of the partial surrender divided by (3) the Contract Value    
immediately prior to the partial surrender.                                     

FOR THE STEP-UP VALUE:                                                          

The Partial Surrender Reduction is equal to (1) the Step-Up Value in effect     
immediately prior to the reduction for the partial surrender, multiplied by (2) 
the amount of the partial surrender divided by (3) the Contract Value,          
immediately prior to the partial surrender.                                     

If you are age 70 or older when you purchase this Contract, you should consider 
that there is no Step-Up Value under the Standard Death Benefit.                

ANNUAL STEP-UP DEATH BENEFIT TO AGE 75                                          

You may select the Annual Step-Up Death Benefit to Age 75 for an extra charge.  

Upon the death of the Annuitant, the death benefit payable as of the Death      
Report Date will be the greatest of (a), (b) or (c) below, each reduced by any  
applicable premium tax or outstanding loan balance:                             

a)   the Contract Value on the Death Report Date; or                  

b)   the Adjusted Purchase Payment (as described below); or           

c)   the Annual Step-Up Value to Age 75 (if any, as described below). 

ADJUSTED PURCHASE PAYMENT                                                       

The initial Adjusted Purchase Payment is equal to the initial Purchase Payment. 
Whenever any additional Purchase Payment(s) are made, the Adjusted Purchase     
Payment is increased by the amount of the Purchase Payment. Whenever a partial  
surrender is taken, the Adjusted Purchase Payment is reduced by a Partial       
Surrender Reduction as described below.                                         

ANNUAL STEP-UP VALUE TO AGE 75                                                  

A Step-Up Value will be established on the first Contract Date anniversary that 
occurs on or prior to the date of death. The Step-Up Value will initially equal 
the Contract Value on that anniversary. On each Contract Date anniversary that  
occurs before the Annuitant's 75th birthday and before the Annuitant's death, if
the Contract Value is greater than the Step-Up Value, the Step-Up Value will be 
increased to equal the Contract Value. If the Step-Up Value is greater than the 
Contract Value, the Step-Up Value will remain unchanged. Whenever a Purchase    
Payment is made, the Step-Up Value will be increased by the amount of that      
Purchase Payment. Whenever a partial surrender is taken, the Step-Up Value will 
be reduced by a partial Surrender Reduction as                                  

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described above. The only changes made to the Step-Up Value on or after the     
Annuitant's 75th birthday will be those related to additional Purchase Payments 
or partial surrenders as described above. If either the Death Report Date or the
Annuitant's 75th birthday occurs before the first Contract Date anniversary,    
there is no Step-Up Value.                                                      

The Annual Step-Up Death Benefit to Age 75 is not available if you or your      
Annuitant is age 76 or older on the Contract Date.                              

PARTIAL SURRENDER REDUCTION                                                     

FOR THE ADJUSTED PURCHASE PAYMENT:                                              

A Partial Surrender Reduction is equal to (1) the Adjusted Purchase Payment in  
effect immediately prior to the reduction for the partial surrender, multiplied 
by (2) the amount of the partial surrender divided by (3) the Contract Value    
immediately prior to the partial surrender.                                     

FOR THE STEP -- UP VALUE:                                                       

The Partial Surrender Reduction is equal to (1) the Step-Up Value in effect     
immediately prior to the reduction for the partial surrender, multiplied by (2) 
the amount of the partial surrender divided by (3) the Contract Value,          
immediately prior to the partial surrender.                                     

PAYMENT OF PROCEEDS                                                             

We describe the process of paying death benefit proceeds before the Maturity    
Date 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.                                           

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 NON-QUALIFIED CONTRACTS

                                                        [Enlarge/Download Table]


-------------------------------------------------------------------------------------------------------------------------------  
                                                                                                                                 
BEFORE THE MATURITY DATE, UPON       THE COMPANY WILL PAY                                                 MANDATORY PAYOUT       
       THE DEATH OF THE                THE PROCEEDS TO:                     UNLESS. . .                     RULES APPLY*         
-------------------------------------------------------------------------------------------------------------------------------  
OWNER (WHO IS NOT THE               The beneficiary (ies),      Unless the beneficiary elects to         Yes                     
ANNUITANT)                          or if none, to the          continue the Contract rather than                                
                                    CONTRACT OWNER'S            receive the distribution.                                        
                                    estate.                                                                                      
-------------------------------------------------------------------------------------------------------------------------------  
OWNER (WHO IS THE ANNUITANT)        The beneficiary (ies),      Unless the beneficiary elects to         Yes                     
                                    or if none, to the          continue the Contract rather than                                
                                    CONTRACT OWNER'S            receive the distribution.                                        
                                    estate.                                                                                      
-------------------------------------------------------------------------------------------------------------------------------  
ANNUITANT (WHO IS NOT THE           The beneficiary (ies),      Unless the beneficiary elects to         Yes                     
CONTRACT OWNER)                     or if none, to the          continue the Contract rather than                                
                                    CONTRACT OWNER.             receive the distribution.                                        
-------------------------------------------------------------------------------------------------------------------------------  
ANNUITANT (WHO IS THE CONTRACT      See death of "owner                                                  Yes                     
OWNER)                              who is the ANNUITANT"                                                                        
                                    above.                                                                                       
-------------------------------------------------------------------------------------------------------------------------------  
ANNUITANT (WHERE OWNER IS A         The beneficiary (ies)                                                Yes (Death of           
NONNATURAL ENTITY/TRUST)            (e.g. the trust) or if                                               ANNUITANT is            
                                    none, to the OWNER.                                                  treated as death        
                                                                                                         of the owner in         
                                                                                                         these                   
                                                                                                         circumstances.)         
-------------------------------------------------------------------------------------------------------------------------------  
BENEFICIARY                         No death proceeds are                                                N/A                     
                                    payable; Contract                                                                            
                                    continues.                                                                                   
-------------------------------------------------------------------------------------------------------------------------------  
CONTINGENT BENEFICIARY              No death proceeds are                                                N/A                     
                                    payable; Contract                                                                            
                                    continues.                                                                                   
-------------------------------------------------------------------------------------------------------------------------------  



                               QUALIFIED CONTRACTS                                                                               
-------------------------------------------------------------------------------------------------------------------------------  
                                                                                                                                 
                                                                                                             MANDATORY           
BEFORE THE MATURITY DATE, UPON          THE COMPANY WILL                                                    PAYOUT RULES         
       THE DEATH OF THE               PAY THE PROCEEDS TO:       UNLESS. . .                                               APPLY*
-------------------------------------------------------------------------------------------------------------------------------  
OWNER/ANNUITANT                     The beneficiary(ies),        Unless the beneficiary elects to        Yes                     
                                    or if none, to the           continue the Contract rather than                               
                                    CONTRACT OWNER'S estate.     receive the distribution.                                       
-------------------------------------------------------------------------------------------------------------------------------  
BENEFICIARY                         No death proceeds are                                                N/A                     
                                    payable; Contract                                                                            
                                    continues.                                                                                   
-------------------------------------------------------------------------------------------------------------------------------  
CONTINGENT BENEFICIARY              No death proceeds are                                                N/A                     
                                    payable; Contract                                                                            
                                    continues.                                                                                   

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

    *    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. For Qualified Contracts, if
         mandatory distributions have begun at the death of the Annuitant, the
5 year payout option is not available.                      

SPOUSAL CONTRACT CONTINUANCE (NON-QUALIFIED CONTRACTS, IRAS AND ROTH IRAS ONLY  
-- DOES NOT APPLY IF A NON-SPOUSE IS A JOINT OWNER)                             

Within one year of your death, if your spouse is named as an owner and/or       
beneficiary, and you die before the maturity date, your spouse may elect to     
continue the Contract as owner rather than have the death benefit paid to the   
beneficiary. If you were the Annuitant and your spouse elects to continue the   
Contract, your spouse will be named the Annuitant as of the Death Report Date.  

If your spouse elects to continue the Contract as Contract Owner, the death     
benefit will be calculated as of the Death Report Date. If the Contract Value is
less than the calculated death benefit, the Contract Value will be              

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increased to equal the death benefit. This amount is referred to as the adjusted
Contract Value. Any difference between the Contract Value and the adjusted      
Contract Value will be allocated to the funding options in the same proportion  
as the allocations of the Contract prior to the Death Report Date.              

Any premium paid before the Death Report Date is no longer subject to a         
withdrawal charge if your spouse elects to continue the Contract. Purchase      
Payments made to the Contract after the Death Report Date will be subject to the
withdrawal charge. All other Contract fees and charges applicable to the        
original Contract will also apply to the continued Contract. All other benefits 
and features of your Contract will be based on your spouse's age on the Death   
Report Date as if your spouse had purchased the Contract with the adjusted      
Contract Value on the Death Report Date. This spousal contract continuance is   
available only once for each Contract.                                          

BENEFICIARY CONTRACT CONTINUANCE (NOT PERMITTED FOR NON-NATURAL BENEFICIARIES)  

If you die before the Maturity Date, and if the value of any beneficiary's      
portion of the death benefit is between $20,000 and $1,000,000 as of the Death  
Report Date, (more than $1,000,000 is subject to Home Office approval), your    
beneficiary(s) may elect to continue his/her portion of the Contract subject to 
applicable Internal Revenue Code distribution requirements, rather than receive 
the death benefit in a lump-sum. If the beneficiary chooses to continue the     
Contract, the beneficiary can extend the payout phase of the Contract enabling  
the beneficiary to "stretch" the death benefit distributions out over his life  
expectancy as permitted by the Internal Revenue Code.                           

If your beneficiary elects to continue the Contract, the death benefit will be  
calculated as of the Death Report Date. The initial Contract Value of the       
continued Contract (the "adjusted Contract Value") will equal the greater of the
Contract Value or the death benefit calculated on the Death Report Date and will
be allocated to the funding options in the same proportion as prior to the Death
Report Date. If the adjusted Contract Value is allocated to the Variable Funding
Options, the beneficiary bears the investment risk.                             

The beneficiary who continues the Contract will be granted the same rights as   
the owner under the original Contract, except the beneficiary cannot:           

o   transfer ownership                                            

o   make additional Purchase Payments                             

The beneficiary may also name his/her own beneficiary ("succeeding beneficiary")
and has the right to take withdrawals at any time after the Death Report Date   
without a withdrawal charge. All other fees and charges applicable to the       
original Contract will also apply to the continued Contract. All benefits and   
features of the continued Contract will be based on the beneficiary's age on the
Death Report Date as if the beneficiary had purchased the Contract with the     
adjusted Contract Value on the Death Report Date.                               

PLANNED DEATH BENEFIT                                                           

You may request that rather than receive a lump-sum death benefit, the          
beneficiary(ies) receive all or a portion of the death benefit proceeds either: 

o    through an annuity for life or a period that does not exceed the 
beneficiary's life expectancy or                            

 o    under the terms of the Beneficiary Continuance provision described
    above. If the Beneficiary Continuance provision is selected as a
   planned death benefit, no surrenders will be allowed other than
        payments meant to satisfy minimum distribution amounts or systematic
withdrawal amounts, if greater                              

You must make the planned death benefit request as well as any revocation of    
this request in writing. Upon your death, your beneficiary(s) cannot revoke or  
modify this request. If the death benefit at the time we receive Due Proof of   
Death is less than $2,000, we will only pay a lump sum to the beneficiary. If   
periodic payments due under the planned death benefit election are less than    
$100, we reserve the right to make Annuity Payments at less frequent intervals, 
resulting in a payment of at least $100 per year. If no beneficiary is alive    
when death benefits become payable, we will pay the death benefit as provided in
your Contract.                                                                  

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DEATH PROCEEDS AFTER THE MATURITY DATE                                          

If any Contract 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 option then in effect.                              

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

MATURITY DATE                                                                   

Under the Contract, you can receive regular payments ("Annuity Payments"). You  
can choose the month and the year in which those payments begin ("Maturity      
Date"). The Maturity Date must be at least 13 months after the Contract Date.   
You can also choose among annuity options or elect a lump-sum distribution.     
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 unless (1) you fully surrendered the Contract; (2) we paid the proceeds
to the beneficiary before that date; or (3) you elected another date. Annuity   
Payments are a series of periodic payments (a) for life; (b) for life with a    
minimum number of payments assured; or (c) for the joint lifetime of the        
Annuitant and another person, and thereafter during the lifetime of the         
survivor, or (d) for a fixed period. We may require proof that the Annuitant is 
alive before we make Annuity Payments. Not all options may be available in all  
states.                                                                         

You may choose to annuitize at any time after the first Contract Date           
anniversary. Unless you elect otherwise, the Maturity Date will be the          
Annuitant's 90th birthday or ten years after the effective date of the Contract,
if later.                                                                       

At least 30 days before the original Maturity Date, you may elect to extend the 
Maturity Date to any time prior to the Annuitant's 90th birthday or to a later  
date with our consent. You may use certain annuity options taken at the Maturity
Date to meet the minimum required distribution requirements of federal tax law, 
or you may use a program of withdrawals instead. These mandatory distribution   
requirements take effect generally upon the death of the Contract Owner, or with
certain 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                                                           

You may elect to receive your Annuity Payments in the form of a variable        
annuity, a fixed annuity or a combination of both. If, at the time Annuity      
Payments begin, you have not made an election, we will apply your cash value to 
provide an annuity funded by the same funding options as you have selected      
during the accumulation period. At least 30 days before the Maturity Date, you  
may transfer the Contract Value among the funding options in order to change the
basis on which we will determine Annuity Payments. (See Transfers.)             

VARIABLE ANNUITY                                                                

You may choose an annuity payout that fluctuates depending on the investment    
experience of the Variable Funding Options. We determine the number of Annuity  
Units credited to the Contract by dividing the first monthly Annuity Payment    
attributable to each Variable Funding Option by the corresponding Accumulation  
Unit value as of 14 days before the date Annuity Payments begin. We use an      
Annuity Unit 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. Your Contract contains the tables we use
to determine your first monthly Annuity Payment. If you elect a variable        
annuity, the amount we apply to it will be the Cash Surrender Value as of 14    
days before the date Annuity Payments begin, less any applicable premium taxes  
not previously deducted.                                                        

The amount of your first monthly payment depends on the annuity option you      
elected and the Annuitant's adjusted age. Your Contract contains the formula for
determining the adjusted age. We determine the total first monthly Annuity      
Payment by multiplying the benefit per $1,000 of value shown in the Contract    
tables by the number of thousands of dollars of Contract Value you apply to that
annuity option. The Contract tables factor in                                   

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an assumed daily net investment factor of 3.5%. We call this your net investment
rate. Your net investment rate corresponds to an annual interest rate of 3.5%.  
This means that if the annualized investment performance, after expenses, of    
your Variable Funding Options is less than 3.5%, then the dollar amount of your 
variable Annuity Payments will decrease. However, if the annualized investment  
performance, after expenses, of your Variable Funding Options is greater than   
3.5%, then the dollar amount of your variable Annuity Payments will increase.   

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 equal the sum of the basic payments in each funding   
option. We determine the actual amounts of these payments by multiplying the    
number of Annuity Units we 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 that 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 we
apply to begin the annuity will be your cash value as of the date Annuity       
Payments begin. Payout rates will not be lower than that 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                                                             

While the Annuitant is alive, you can change your annuity option selection any  
time up to the Maturity Date. Once annuity payments have begun, no further      
elections are allowed. Once annuity payments have begun, the Contract has no    
cash surrender value and no full or partial withdrawals are permitted, except if
you select a variable annuity under Option 5 Payments for a Fixed Period.       

During the Annuitant's lifetime, if you do not elect otherwise before the       
Maturity Date, we will pay you (or another designated payee) the first of a     
series of monthly Annuity Payments based on the life of the Annuitant, in       
accordance with Annuity Option 2 (Life Annuity with 120 monthly payments        
assured). For certain Qualified Contracts, Annuity Option 5 (Joint and Last     
Survivor Life Annuity -- Annuity Reduced on Death of Primary Payee) will be the 
automatic option as described in the Contract. (See Annuity Options.)           

The minimum amount that can be placed under an annuity option will be $2,000    
unless we agree to a lesser amount. If any monthly periodic payment due is less 
than $100, we reserve the right to make payments at less frequent intervals, or 
to pay the Contract Value in a lump-sum.                                        

On the Maturity Date, we will pay the amount due under the Contract in          
accordance with the payment option that you select. You may choose to receive a 
single lump-sum payment. You must elect an option in writing, in a form         
satisfactory to the Company. Any election made during the lifetime of the       
Annuitant must be made by the Contract Owner.                                   

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 Annuitant,
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.                                         

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Option 3 -- 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 4 -- 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 that would have been made during the  
lifetime of the primary payee. No further payments will be made following the   
death of the survivor.                                                          

Option 5 -- Payments for a Fixed Period. We will make monthly payments for the  
period selected. If you elect this option as a variable annuity, at any time    
after the Maturity Date, you may elect to redeem all remaining guaranteed Fixed 
Period payments and receive a present value in a lump sum. The interest rate    
used to calculate the present value is 4.5%, which is a rate 1% higher than the 
3.5% assumed daily net investment factor applicable under the Contract. The     
remaining payments for the Fixed Period selected are assumed to be level        
payments equal to the most recent period certain payment for the Fixed Period   
prior to the request for a lump sum, adjusted for the investment experience of  
the applicable Variable Funding Options since the prior determination.          
Withdrawal charges may be applicable and will be deducted from the present value
the same as if you fully surrendered your Contract. For the purpose of          
calculating the withdrawal charge, annuity payments will be treated as partial  
withdrawals.                                                                    

Option 6 -- Other Annuity Options. We will make any other arrangements for      
Annuity Payments as may be mutually agreed upon.                                

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

RIGHT TO RETURN                                                                 

You may return the Contract for a full refund of the Contract Value plus any    
Contract charges and premium taxes you paid (but not any fees and charges the   
Underlying Fund assessed) within ten days after you receive it (the "right to   
return period"). You bear the investment risk of investing in the Variable      
Funding Options during the right to return period; therefore, the Contract Value
we return may be greater or less than your Purchase Payment.                    

If you purchase the Contract as an Individual Retirement Annuity, and return it 
within the first seven days after delivery, or longer if your state law permits,
we will refund your Purchase Payment in full; during the remainder of the right 
to return period, we will refund the Contract Value (including charges).        

We will determine the cash value following the close of the business day on     
which we receive your Contract and a Written Request for a refund. Where state  
law requires a different period, or the return of Purchase Payments or other    
variations of this provision, we will comply. Refer to your Contract for any    
state-specific information.                                                     

TERMINATION                                                                     

We reserve the right to terminate the Contract on any business day if the       
Contract Value as of that date is less than $2,000 and you have not made        
Purchase Payments for at least two years, unless otherwise specified by state   
law. Termination will not occur until 31 days after we have mailed notice of    
termination to your 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.                     

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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.            

ASSIGNMENT                                                                      

A non-qualified Contract may be assigned. We are not responsible for determining
the validity of an assignment. Assigning a non-qualified Contract may have tax  
consequences, so you should consult with your tax adviser. A Qualified Contract 
may not be transferred or assigned, unless allowed by applicable law.           

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 of 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. At any time, payments from the Fixed Account
may be delayed up to 6 months.                                                  

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

THE INSURANCE COMPANY                                                           

The Travelers Insurance Company is a stock insurance company chartered in 1863  
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        
Cityplace, Hartford, Connecticut 06103-3415.                                    

FINANCIAL STATEMENTS                                                            

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

DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS                                      

DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT. Travelers Distribution LLC   
("TDLLC") serves as the principal underwriter and distributor of the securities 
offered through this Prospectus pursuant to the terms of the Distribution and   
Principal Underwriting Agreement. TDLLC also acts as the principal underwriter  
and distributor of other variable annuity contracts and variable life insurance 
policies issued by the Company and its affiliated companies.                    

TDLLC's principal executive offices are located at One Cityplace, Hartford,     
Connecticut 06103. TDLLC is registered as a broker-dealer with the Securities   
and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as   
well as the securities commissions in the states in which it operates, and is a 
member of the National Association of Securities Dealers, Inc. ("NASD"). TDLLC  
is affiliated with the Company and each Separate Account. TDLLC, as the         
principal underwriter and distributor, does not retain any fees under the       
Contracts.                                                                      

The Contracts are offered on a continuous basis. TDLLC enters into selling      
agreements with broker-dealers who are registered with the SEC and are members  
of the NASD, and with entities that may offer the Contracts but are exempt from 
registration. Applications for the Contract are solicited by registered         
representatives who are associated persons of such broker-dealer firms. Such    
representatives act as appointed agents of the Company                          

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under applicable state insurance law and must be licensed to sell variable      
insurance products. We intend to offer the Contract in all jurisdictions where  
we are licensed to do business and where the Contract is approved.              

COMPENSATION. Broker-dealers who have selling agreements with TDLLC are paid    
compensation for the promotion and sale of the Contracts according to one or    
more schedules. Registered representatives who solicit sales of the Contract    
typically receive a portion of the compensation payable to the broker-dealer    
firm, depending on the agreement between the firm and the registered            
representative. Compensation paid on the Contracts, as well as other incentives 
or payments, are not assessed as an additional direct charge to Contract Owners 
or the Separate Account. We intend to recoup commissions and other sales        
expenses through fees and charges imposed under the Contract and from profits on
payments received by the Company and TDLLC for providing administrative,        
marketing and other support and services to the Funds.                          

The amount and timing of compensation may vary depending on the selling         
agreement but is not expected to exceed 10% of Purchase Payments (if up-front   
compensation is paid to registered representatives) and up to 2% annually of    
average account value (if asset-based compensation is paid to registered        
representatives). We may also periodically establish commission specials;       
however, commissions paid under these specials will not exceed the amounts      
described immediately above. To the extent permitted by NASD rules and other    
applicable laws and regulations, TDLLC may pay or allow other promotional       
incentives or payments in the form of cash or other compensation.               

Broker-dealer firms may receive separate compensation or reimbursement for,     
among other things, training of sales personnel, marketing or other services    
they provide to the Company or our affiliates. In addition, the Company or TDLLC
may enter into special compensation arrangements with certain broker-dealer     
firms based on aggregate or anticipated sales of the Contracts or other         
criteria. These special compensation arrangements will not be offered to all    
broker-dealer firms and the terms of such arrangements may differ between       
broker-dealer firms.                                                            

The Company and TDLLC have entered into such arrangements with AIG Advisor Group
(including Advantage Capital Corporation, FSC Securities Corporation, Royal     
Alliance Associates, Inc., Sentra Securities Corporation, Spelman & Co., Inc.   
and SunAmerica Securities, Inc.), ING Advisors Network (including Financial     
Network Corporation, Locust Street Securities, Multi-Financial Securities, IFG  
Network Securities, VESTAX Securities, Washington Square Securities and         
PrimeVest Financial Services), NFP Securities, Inc., and Piper Jaffray. Any such
compensation payable to a broker-dealer firm will be made by TDLLC or the       
Company out of their own assets and will not result in any additional direct    
charge to you.                                                                  

The Company and TDLLC have entered into selling agreements with certain         
broker-dealer firms that have an affiliate that acts as investment adviser to   
one or more Underlying Funds or serves as a subadviser to a Portfolio of The    
Travelers Series Trust or Travelers Series Fund Inc., which are offered under   
the Contracts. These firms include Fidelity Management & Research Company,      
Morgan Stanley Investment Advisers Inc., Merrill Lynch Investment Managers,     
L.P., Salomon Brothers Asset Management and Smith Barney Fund Management.       

TOWER SQUARE SECURITIES. TDLLC has entered into a selling agreement with Tower  
Square Securities, Inc. ("Tower Square"), which is affiliated with the Company. 
Registered representatives of Tower Square, who are properly licensed and       
appointed, may offer the Contract to customers. Such representatives are        
eligible for various cash benefits, such as bonuses, commission advances and    
non-cash compensation programs offered by the Company. Sales of the Contracts   
may help qualify a Tower Square representative for such benefits. Sales         
representatives may receive other payments from the Company for services that do
not directly involve the sale of the Contracts, including payments made for the 
recruitment and training of personnel, production of promotional literature, and
similar services. In addition, sales representatives who meet certain Company   
productivity, persistency and length of the services standards may be eligible  
for additional compensation.                                                    

CONFORMITY WITH STATE AND FEDERAL LAWS                                          

The laws of the state in which we deliver a Contract govern that Contract. Where
a state has not approved a Contract feature or funding option, it will not be   
available in that state. Any paid-up annuity, Cash Surrender 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 we delivered the        
Contract. We reserve the right to make any changes, including retroactive       
changes, in the Contract to the extent 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.                     

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VOTING RIGHTS                                                                   

The Company is the legal owner of the shares of the Underlying Funds. However,  
we believe that when an Underlying Fund solicits proxies in conjunction with a  
vote of shareholders we are required to obtain from you and from other owners   
instructions on how to vote those shares. We will vote all shares, including    
those we may own on our own behalf, and those where we have not received        
instructions from Contract Owners, in the same proportion as shares for which we
received voting instructions. Should we determine that we are no longer required
to comply with the above, we will vote on the shares in our own right. In       
certain limited circumstances, and when permitted by law, we may disregard      
voting instructions. If we do disregard voting instructions, a summary of that  
action and the reasons for such action would be included in the next annual     
report to Contract Owners.                                                      

FUND U. In accordance with our view of present applicable law, we 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. We will vote shares for which we have not   
received instructions in the same proportion as we vote shares for which we have
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 we determine that we are permitted to vote shares of the Underlying 
Funds in our own right, we 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 AND MM. Contract Owners participating in Accounts GIS, QB or MM
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 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.                                                   

RESTRICTIONS ON FINANCIAL TRANSACTIONS                                          

Federal laws designed to counter terrorism and prevent money laundering might,  
in certain circumstances, require us to block a Contract Owner's ability to make
certain transactions and thereby refuse to accept any request for transfers,    
withdrawals, surrenders, or death benefits, until the instructions are received 
from the appropriate regulator. We may also be required to provide additional   
information about you and your Contract to government regulators.               

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 Deputy      
General Counsel of the Companies.                                               

In 2003, several issues in the mutual fund and variable insurance product       
industries have come under the scrutiny of federal and state regulators. Like   
many other companies in our industry, the Company has received a request for    
information from the Securities and Exchange Commission (SEC) and a subpoena    
from the New York Attorney General regarding market timing and late trading. In 
March 2004, the SEC requested additional information about the Company's        
variable product operations on market timing, late trading and revenue sharing. 
The Company is cooperating fully with all of these reviews and is not able to   
predict their outcomes.                                                         

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Notwithstanding the above, there are no pending legal proceedings affecting     
either the Separate Account or the principal underwriter. There are no pending  
legal proceedings against either Company likely to have a material adverse      
affect on the ability of either Company to meet its obligations under the       
applicable Contract.                                                            

 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 and MM) 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 that 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; and       
Account MM -- December 29, 1981.                                                

We hold the assets for the exclusive benefit of the owners of the Separate      
Accounts, according to the laws of the State of Connecticut. Income, gains and  
losses, whether or not realized, from assets allocated to the Separate Accounts,
are in accordance with the Contracts, credited to or charged against the        
Separate Accounts without regard to other income, gains or losses of the        
Company. The assets held by the Separate Accounts are not chargeable with       
liabilities arising out of any other business that we 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.                                           

All investment income and other distributions of the funding options are payable
to the Separate Account. We reinvest all such income and/or distributions in    
shares of the respective funding option at net asset value.                     

Shares of the Variable Funding Options are currently sold only to life insurance
company Separate Accounts to fund variable annuity and variable life insurance  
contracts. 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 Variable Funding  
Options do not currently foresee any such disadvantages either to variable      
annuity Contract Owners or variable life policy owners, each Variable 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.    

PERFORMANCE INFORMATION                                                         

In advertisements for the Contract, we may include performance figures to show  
you how a Variable Funding Option has performed in the past. These figures are  
rates of return or yield quotations shown as a percent. These figures show past 
performance of a Variable Funding Option and are not an indication of how a     
Variable Funding Option will perform in the future.                             

Our advertisements may show performance figures assuming that you do not elect  
any optional features. However, if you elect any of these optional features,    
they involve additional charges that will serve to decrease                     

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the performance of your Variable Funding Options. You may wish to speak with    
your registered representative to obtain performance information specific to the
optional features you may wish to select.                                       

Performance figures for each Variable Funding Option are based in part on the   
performance of a corresponding Underlying Fund. In some cases, the Underlying   
Fund may have existed before the technical inception of the corresponding       
Variable Funding Option. In those cases, we can create "hypothetical historical 
performance" of a Variable Funding Option. These figures show the performance   
that the Variable Funding Option would have achieved had it been available      
during the entire history of the Underlying Fund.                               

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

The following general discussion of the federal income tax consequences related 
to your investment in this Contract is not intended to cover all situations, and
is not meant to provide tax or legal 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 and/or legal adviser regarding the tax implications of  
purchasing this Contract based upon your individual situation. For further tax  
information, an additional discussion of certain tax matters 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 premiums paid under an annuity   
and permitting tax-free transfers between the various investment options offered
under the Contract. The Internal Revenue Code ("Code") governs how earnings on  
your investment in the Contract are 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. In analyzing the benefits of tax       
deferral it is important to note that the Jobs and Growth Tax Relief            
Reconciliation Act of 2003 amended Code Section 1 to reduce the marginal tax    
rates on long-term capital gains and dividends to 5% and 15%. The reduced rates 
apply during 2003 through 2008, and thereafter will increase to prior levels.   
Earnings under annuity Contracts continue to be taxed as ordinary income (top   
rate of 35%).                                                                   

TAX-FREE EXCHANGES: Code Section 1035 provides that, if certain conditions are  
met, 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 AND NON-QUALIFIED                                 

QUALIFIED ANNUITY CONTRACTS                                                     

If you purchase your Contract with proceeds of an eligible rollover distribution
from any qualified employee pension plan or individual retirement annuity (IRA),
your Contract is referred to as a Qualified Contract. Some examples of Qualified
Contracts are: IRAs, tax-sheltered annuities established by public school       
systems or certain tax-exempt organizations under Code Section 403(b), corporate
sponsored pension and profit-sharing plans (including 401(k) plans), Keogh Plans
(for self-employed individuals), and certain other qualified deferred           
compensation plans. Another type of Qualified Contract is a Roth IRA, under     
which after-tax contributions accumulate until maturity, when amounts (including
earnings) may be withdrawn tax-free. The rights and benefits under a Qualified  
Contract may be limited by the terms of the retirement plan, regardless of the  
terms and conditions of the Contract. Plan participants making contributions to 
Qualified Contracts will be subject to minimum distribution rules as provided by
the Code and described below.                                                   

TAXATION OF QUALIFIED ANNUITY CONTRACTS                                         

Under a qualified annuity, since amounts paid into the Contract have generally  
not yet been taxed, the full amount of such distributions, including the amount 
attributable to Purchase Payments, whether paid in the form of lump-sum         
withdrawals or Annuity Payments, are generally 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                                                                       

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

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. If you 
own more than one individual retirement annuity and/or account, you may satisfy 
the minimum distribution rules on an aggregate basis (i.e. determine the total  
amount of required distributions from all IRAs and take the required amount from
any one or more IRAs). A similar aggregate approach is available to meet your   
403(b) minimum distribution requirements if you have multiple 403(b) annuities. 

MINIMUM DISTRIBUTIONS FOR BENEFICIARIES UPON THE CONTRACT OWNER'S DEATH: Upon   
the death of the Contract Owner and/or Annuitant of a Qualified Contract, the   
funds remaining in the Contract must be completely withdrawn within 5 years from
the date of death (including in a single lump sum) or minimum distributions may 
be taken over the life expectancy of the beneficiary provided such distributions
are payable at least annually and begin within one year from the date of death. 
Special rules apply where the beneficiary is the surviving spouse, which allow  
the spouse to assume the Contract and defer the minimum distribution            
requirements.                                                                   

NOTE TO PARTICIPANTS IN QUALIFIED PLANS INCLUDING 401, 403(b), 457 AS WELL AS   
IRA OWNERS: While annual plan contribution limits may be increased from time to 
time by Congress and the IRS for federal income tax purposes, these limits must 
be adopted by each state for the higher limits to be effective at a state income
tax level. In other words, the permissible contribution limit for income tax    
purposes may be different at the federal level from your state's income tax     
laws. Therefore, in certain states, a portion of the contributions may not be   
excludible or deductible from state income taxes. Please consult your employer  
or tax adviser regarding this issue.                                            

NON-QUALIFIED ANNUITY CONTRACTS                                                 

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  
non-qualified.                                                                  

As the owner of a non-qualified 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 under federal tax laws. 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     
federal income tax purposes.                                                    

If a non-qualified 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 includable in income annually
and taxed at ordinary income tax rates. Furthermore, for Contracts issued after 
April 22, 1987, if you transfer the Contract to another person or entity without
adequate consideration, all deferred increases in value will be includable 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 includable in your taxable 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,
and will have tax consequences in the year taken.                               

Federal tax law requires that non-qualified annuity Contracts meet minimum      
mandatory distribution requirements upon the death of the Contract Owner,       
including the death of either of the joint owners. If these requirements are not
met, the Contract will not be treated as an annuity Contract for federal income 
tax purposes and earnings under the Contract will be taxable currently, not when
distributed. The distribution required depends, among other things, upon whether
an annuity option is elected or whether the succeeding Contract                 

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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.    
There is a more complete discussion of these rules in the SAI.                  

DIVERSIFICATION REQUIREMENTS FOR VARIABLE ANNUITIES                             

The Code requires that any non-qualified variable annuity Contracts based on a  
Separate Account must meet specific diversification standards. Non-qualified    
variable annuity contracts shall not be treated as an annuity for Federal income
tax purposes 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, requiring the current inclusion of a proportionate share of the      
income and gains from the Separate Account assets in the income of each Contract
Owner. 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                                                    

In certain circumstances, owners of variable annuity contracts have been        
considered to be the owners of the assets of the underlying Separate Account for
Federal income tax purposes due to their ability to exercise investment control 
over those assets. When this is the case, the contract owners have been         
currently taxed on income and gains attributable to the variable account assets.
There is little guidance in this area, and some features of the Contract, such  
as the number of funds available and the flexibility of the Contract Owner to   
allocate premium payments and transfer amounts among the funding options, have  
not been addressed in public rulings. While we believe that the Contract does   
not give the Contract Owner investment control over Separate Account assets, we 
reserve the right to modify the Contract as necessary to prevent a Contract     
Owner from being treated as the owner of the Separate Account assets supporting 
the Contract.                                                                   

TAXATION OF DEATH BENEFIT PROCEEDS                                              

Amounts may be distributed from a Non-qualified Contract because of the death of
an owner or Annuitant. Generally, such amounts are includable 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.     

OTHER TAX CONSIDERATIONS                                                        

TREATMENT OF CHARGES FOR OPTIONAL BENEFITS                                      

The Contract may provide one or more optional enhanced death benefits or other  
minimum guaranteed benefit that in some cases may exceed the greater of purchase
price or the Contract Value. It is possible that the Internal Revenue Service   
may take the position that the charges for the optional enhanced benefit(s) are 
deemed to be taxable distributions to you. Although we do not believe that a    
charge under such optional enhanced benefit should be treated as a taxable      
withdrawal, you should consult with your tax adviser before selecting any rider 
or endorsement to the Contract.                                                 

PENALTY TAX FOR PREMATURE DISTRIBUTIONS                                         

For both Qualified and Non-qualified Contracts, 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. The 10% additional tax is in addition to any        
penalties that may apply under your Contract and the normal income taxes due on 
the distribution.                                                               

PUERTO RICO TAX CONSIDERATIONS                                                  

The Puerto Rico Internal Revenue Code of 1994 (the "1994 Code") taxes           
distributions from non-qualified annuity contracts differently than in the U.S. 
Distributions that are not in the form of an annuity (including partial         

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surrenders and period certain payments) are treated under the 1994 Code first as
a return of investment. Therefore, no taxable income is recognized for Puerto   
Rico tax purposes until the cumulative amount paid exceeds your tax basis. The  
amount of income on annuity distributions (payable over your lifetime) is also  
calculated differently under the 1994 Code. Since Puerto Rico residents are also
subject to U.S. income tax on all income other than income sourced to Puerto    
Rico, the timing of recognition of income from an annuity contract could vary   
between the two jurisdictions. Although the 1994 Code provides a credit against 
the Puerto Rico income tax for U.S. income taxes paid, an individual may not get
full credit because of the timing differences. You should consult with a        
personal tax adviser regarding the tax consequences of purchasing an annuity    
contract and/or any proposed distribution, particularly a partial distribution  
or election to annuitize.                                                       

NON-RESIDENT ALIENS                                                             

Distributions to non-resident aliens ("NRAs") are subject to special and complex
tax and withholding rules under the Code, some of which are based upon the      
particular facts and circumstances of the Contract Owner, the beneficiary and   
the transaction itself. In addition, Annuity Payments to NRAs in many countries 
are exempt from U.S. tax (or subject to lower rates) based upon a tax treaty.   
NRAs should seek guidance from a tax adviser regarding their personal situation.

 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 Variable 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.                                                    

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

INVESTMENT ADVISER:  TAMIC                                                      

SUBADVISER: TIMCO                                                               

PORTFOLIO MANAGER: Sandip Bhagat has resigned as portfolio manager of the       
accounts and effective June 28, 2004, a team of individuals employed by the     
investment adviser is responsible for the day-to-day management of the accounts.

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: The Account normally invests at least 80% of its assets in   
equity securities ("80% investment policy"). 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.                                                           

80% INVESTMENT POLICY: The Account will notify shareholders at least 60 days'   
prior to changing its 80% investment policy.                                    

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:          

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

o    exchange-traded stock index futures                              

o    covered call options, put options                                

o    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:  Gene Collins and Kurt Lin                                   

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

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

SELECTION PROCESS: The Account normally invests at least 80% of its assets in   
investment-grade bonds and debt securities ("80% investment policy").           
Investment-grade bonds are those rated within the four highest categories by    
Standard & Poor's Ratings Group, Moody's Investors Service, Inc., or any other  
nationally recognized statistical rating organization, or if, unrated,          
determined to be of comparable quality by the adviser. 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.                                      

80% INVESTMENT POLICY: The Account will notify shareholders at least 60 days'   
prior to changing its 80% investment policy.                                    

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:                                                  

o   treasury bills                                                

o   repurchase agreements                                         

o   commercial paper                                              

o   certificates of deposit                                       

o   banker's acceptances                                          

o   bonds, notes, debentures                                      

o   convertible securities                                        

o   when-issued securities                                        

o   interest rate future Contracts                                

Commercial paper rated in the top category by a nationally recognized           
statistical rating organization is included in the Account's 80% investment     
policy.                                                                         

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                                

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   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                     

       6.    make purchases on margin in the form of short-term credits that 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                                     

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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.                                                                        

                                                        [Enlarge/Download Table]


                                                                                                                       
COMMERCIAL PAPER AND                     Commercial paper is short-term unsecured promissory notes issued by           
SHORT-TERM CORPORATE DEBT                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 include letters of credit, guarantees, puts and demand features, 
ENHANCEMENTS                             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 Account 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       
                                         Account may accept a lower rate of interest. The Account 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. 

VARIABLE AND FLOATING RATE               Have interest rates that adjust periodically, which may be either at specific 
SECURITIES                               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.                                                                    

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PRINCIPAL 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.            

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 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 AND QB) 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 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).                                                       

FOREIGN SECURITIES (GIS AND QB) 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 AND QB) An Account may use derivative   
contracts, such as futures and options on securities, for any of the following  
purposes:                                                                       

       o   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;                

o   As a substitute for buying or selling securities              

o   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.      

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OTHER RISK FACTORS                                                              

SELECTION RISK (GIS AND QB) 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.                     

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 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.                                                                     

                                                        [Enlarge/Download Table]


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


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

No condensed financial information is shown because, as of December 31, 2003,   
the Variable Funding Options had not yet commenced operation.                   

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

 THE FIXED ACCOUNT

The Fixed Account is part of the Company's general account assets. These general
account assets include all assets of the Company other than those held in the   
Separate Accounts sponsored by the Company or its affiliates.                   

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 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 below, less any applicable premium taxes or 
prior withdrawals.                                                              

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. Where permitted by state law, we reserve the 
right to restrict Purchase Payments into the Fixed Account. The general account 
and any interest therein is not registered under, or 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 we       
prospectively declare from time to time.                                        

We guarantee that for the life of the Contract we will credit interest at a rate
not less than the minimum interest rate allowed by state law. We reserve the    
right to change the rate subject to applicable state law. We will determine any 
interest we credit to amounts allocated to the Fixed Account in excess of the   
minimum guaranteed rate in our sole discretion. You assume the risk that        
interest credited to the Fixed Account may not exceed the minimum guaranteed    
rate for any given year. We have no specific formula for determining the        
interest rate. Some factors we may consider are regulatory and tax requirements,
general economic trends and competitive factors                                 

TRANSFERS                                                                       

You may make transfers from the Fixed Account to any other available Variable   
Funding Option(s) twice a year during the 30 days following the semiannual      
anniversary of the Contract date. We limit transfers to an amount of up to 10%  
of the Fixed Account Contract Value on the semiannual Contract date anniversary.
(This restriction does not apply to Qualified Contracts or transfers under the  
Dollar Cost Averaging Program.) Amounts previously transferred from the Fixed   
Account to Variable Funding Options may not be transferred back to the Fixed    
Account for a period of at least six months from the date of transfer.          

Automated transfers from the Fixed Account to any of the Variable 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.                           

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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                                   
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 Quality Bond Account for Variable Annuities
 The Travelers Money Market Account for Variable Annuities
Investment Management and Advisory Services                           
Advisory Fees                                           
TIMCO                                                   
TAMIC                                                   
Code of Ethics                                          
Valuation of Assets                                                   
Net Investment Factor                                                 
Federal Tax Considerations                                            
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 OCTOBER 25, 2004 (FORM  
NO. L-24422S) ARE AVAILABLE WITHOUT CHARGE. TO REQUEST A COPY, PLEASE CLIP THIS 
COUPON ON THE LINE, ENTER YOUR NAME AND ADDRESS IN THE SPACES PROVIDED BELOW,   
AND MAIL TO: THE TRAVELERS INSURANCE COMPANY, ANNUITY SERVICES, ONE CITYPLACE, 3
CP, HARTFORD, CONNECTICUT 06103-3415.                                           

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

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

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 UNIVERSAL ANNUITY ADVANTAGE

INDIVIDUAL
VARIABLE ANNUITY CONTRACTS
 ISSUED BY
 THE TRAVELERS INSURANCE COMPANY

L-24422                                                        October 25, 2004 

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PART B
 INFORMATION REQUIRED IN A STATEMENT OF ADDITIONAL INFORMATION

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 UNIVERSAL ANNUITY ADVANTAGE

 STATEMENT OF ADDITIONAL INFORMATION: OCTOBER 25, 2004

THE TRAVELERS GROWTH AND INCOME STOCK ACCOUNT FOR VARIABLE ANNUITIES ("GIS")
THE TRAVELERS QUALITY BOND ACCOUNT FOR VARIABLE ANNUITIES ("QB")
THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES ("MM")
THE TRAVELERS FUND U FOR VARIABLE ANNUITIES ("FUND U")

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 October 25, 2004. A copy
of the Prospectus may be obtained by writing to The Travelers Insurance Company 
(the "Company"), Annuity Services, One Cityplace, Hartford, Connecticut         
06103-3415 or by calling (800) 842-8573 or by accessing the Securities and      
Exchange Commission's website at http://www.sec.gov.                            

                                                        [Enlarge/Download Table]

                                                 TABLE OF CONTENTS                                    PAGE

                                                                                                          
Description of The Travelers Insurance Company and The Separate Accounts.............................   3 

The Insurance Company................................................................................   3 

The Separate Accounts................................................................................   3 

Investment Objectives, Policies and Risks............................................................   3 

Description of Certain Types of Investments and Investment Techniques Available to the Accounts......   5 

Investment Restrictions..............................................................................  21 

The Travelers Growth and Income Stock Account for Variable Annuities.................................  21 

The Travelers Quality Bond Account for Variable Annuities............................................  23 

The Travelers Money Market Account for Variable Annuities............................................  24 

Investment Management And Advisory Services..........................................................  25 

Advisory Fees........................................................................................  26 

TIMCO................................................................................................  26 

TAMIC................................................................................................  28 

Code of Ethics.......................................................................................  29 

Valuation Of Assets..................................................................................  29 

Net Investment Factor................................................................................  30 

Federal Tax Considerations...........................................................................  30 

The Board Of Managers and Officers...................................................................  34 

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                                            TABLE OF CONTENTS (CONT'D)                                PAGE

                                                                                                          
Distribution and Principal Underwriting Agreement....................................................  39 

Administrative Services..............................................................................  40 

Securities Custodian.................................................................................  40 

Incorporation of Certain Documents by Reference......................................................  40 

Independent Registered Public Accounting Firm........................................................  41 

Financial Statements.................................................................................     

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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 1863 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 Cityplace, Hartford, Connecticut 06103-3415 and   
its telephone number is (860) 308-1000.                                         

The Company is a wholly owned subsidiary of Citigroup Insurance Holding         
Corporation, which is an indirect, wholly owned subsidiary of Citigroup Inc.    
("Citigroup"), a diversified global financial services holding company whose    
businesses provide a broad range of financial services to consumer and corporate
customers around the world. Citigroup's activities are conducted through the    
Global Consumer, Global Corporate, Global Investment Management and Private     
Banking, and Investment Activities.                                             

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 complies with the provisions
of the Investment Company Act of 1940. 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 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. The Company holds title to the assets
of the Separate Accounts. The assets are kept physically segregated and are held
separate and apart from the Company's general corporate assets. Records are     
maintained of all purchases and redemptions of the Underlying Funds held in each
of the Variable Funding Options.                                                

Two different types of Separate Accounts are available to fund the variable     
annuity contract described in this Statement of Additional Information. 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 Underlying  
Funds.                                                                          

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

 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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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.                                        

                                           INVESTMENTS AT A GLANCE

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

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 DESCRIPTION OF CERTAIN TYPES OF INVESTMENTS AND INVESTMENT TECHNIQUES
AVAILABLE TO THE 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.                          

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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.          

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.                                              

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                                          

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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.                

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                               

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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 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 Accounts 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                                   

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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.                                               

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.     

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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.                                              

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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 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                                                   

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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  
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.                                                                        

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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.                              

 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 futures contract 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                          

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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, 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.                                              

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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 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                    

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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 Accounts 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.                                        

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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 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. Inmost instances such securities
are traded at a discount from the market value of unrestricted securities of the
same issuer until the restriction                                               

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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.             

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                                                                    

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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 Subadviser, 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 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.                                             

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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 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                                                                         

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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 ("GIS")    

INVESTMENT RESTRICTIONS                                                         

The investment restrictions for Account GIS, 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, as defined in the 1940 Act. Items 
10 through 13 may be changed by a vote of the Board of Managers of Account GIS. 

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     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, 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 Account GIS 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 Account GIS 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 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.                                                            

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PORTFOLIO TURNOVER                                                              

Although Account GIS 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 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. The portfolio turnover rate for Account GIS   
for the years ended December 31, 2001, 2002 and 2003 was 32%, 54% and 68%,      
respectively.                                                                   

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

INVESTMENT RESTRICTIONS                                                         

The account normally invests at least 80% of its assets in investment-grade     
bonds and debt securities ("80% investment policy"). Investment-grade bonds are 
those rated within the three highest categories by Standard & Poors Group,      
Moody's Investors Service, Inc. or any other nationally recognized statistical  
rating organization, or if, unrated, determined to be of comparable quality by  
the Adviser. Commercial paper rated in the top category by a nationally         
recognized statistical rating organization is included in the Account's 80%     
investment policy. The Account will notify shareholders at least 60 days' prior 
to changing it's 80% investment policy.                                         

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.                       

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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.                                                

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, 2001, 2002 and 2003 was 166%, 113% and 139%, respectively.         

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

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               

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           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;

  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.                                                       

 INVESTMENT MANAGEMENT AND ADVISORY SERVICES

The investments and administration of the separate accounts are under the       
direction of the Board of Managers.                                             

Travelers Asset Management International Company LLC (TAMIC) furnishes          
investment management and advisory services to Accounts GIS, QB, and MM         
according to the terms of written Investment Advisory Agreements. The Investment
Advisory Agreements between Account QB and TAMIC and Account MM and TAMIC, were 
each approved by a vote of variable annuity Contract Owners at their meeting    
held on April 23, 1993. The Investment Advisory 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.                                           

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The agreements between Accounts GIS, QB and MM 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 TAMIC, on an annual basis, an advisory fee
            based on the current value of the assets of the accounts for which
      TAMIC acts as investment adviser (see "Advisory Fees" in the
prospectus);                                          

      2.    may not be terminated by 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.               

BOARD REVIEW AND APPROVAL OF INVESTMENT ADVISORY AGREEMENTS                     

As previously noted, the Board of Managers oversees the Accounts' investment    
advisers and determines whether to approve and renew the Accounts' Investment   
Advisory Agreements. In reviewing the Agreements, the Board considered a number 
of factors, many of which are discussed below, but did not identify any single  
factor as controlling.                                                          

Capability of the Investment Adviser to Provide Services                        

The Board considered, among other things, the experience and expertise of each  
investment adviser's personnel. The Board considered such factors as other      
clients or funds for which the adviser performs similar services, investment    
performance of such other clients or funds, the length of service to such other 
clients or funds and the size of asset pools advised. Additionally, the Board   
also considered the educational background and professional experience of the   
adviser's personnel. The Board also considered the availability of such         
personnel to the appropriate fund, as well as each adviser's policies relating  
to the assignment of personnel to the funds.                                    

Regulatory Compliance History                                                   

The Board considered whether any of the advisers or any affiliate thereof had   
any regulatory compliance problems. The Board considered the number and type of 
complaints, if any, involving the adviser, and considered any inquiries         
involving the adviser by the SEC or other federal or state agencies.            

Investment Performance of the Accounts                                          

The Board reviewed the performance of each Account from several perspectives.   
The Board considered how well each Account achieved its objective. The Board    
also compared each Account's performance with mutual funds with similar         
objectives and policies, but with different advisers. Additionally, the Board   
compared the performance of each Account with appropriate market indices.       

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Profitability of the Investment Adviser                                         

The Board considered the reasonableness of each adviser's profit, if any, from  
the fees under each Agreement. The Board assessed the fees in light of each     
adviser's overall financial position. The Board considered the appropriateness  
of the method by which the costs to the adviser of providing services are       
computed. The Board examined any collateral benefits to the adviser as a result 
of providing services to the Account as well as collateral benefits to the      
Account as a result of its relationship with the adviser.                       

Expenses                                                                        

The Board considered data on the advisory fees of a representative sample of    
mutual funds that are comparable to each Account. The Board also considered the 
expense ratios of a representative sample of mutual funds comparable to each    
Account. The Board reviewed whether there have been any economies of scale      
realized because of common management with other funds or other funds managed by
the adviser and considered the potential for further economies of scale.        

After evaluation of information received at regular meetings throughout the     
year, the Board concluded that each Account's investment advisory agreement is  
reasonable and fair to the Account and its shareholders and should be continued.

ADVISORY FEES                                                                   

The advisory fee for each Separate Account is described in the prospectus.      

The advisory fees paid to TAMIC by each of the Accounts during the last three   
fiscal years were:                                                              

---------- ---------------- ------------------ ---------------- 
         ACCOUNT GIS       ACCOUNT QB         ACCOUNT MM
---------- ---------------- ------------------ ---------------- 
   2001       $4,526,872           $415,273         $554,922
---------- ---------------- ------------------ ---------------- 
   2002       $3,528,284           $348,157         $500,554
---------- ---------------- ------------------ ---------------- 
   2003       $3,051,333           $367,941         $371,959
---------- ---------------- ------------------ ---------------- 

Effective May 1, 1998, The Travelers Investment Management Company (TIMCO)      
became the Subadviser to Account GIS. The subadvisory fee paid to TIMCO by TAMIC
for Account GIS for the years ended December 2001, 2002 and 2003 were           
$3,207,117, $2,487,883 and $2,112,824, respectively.                            

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                                                 

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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 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.                  

The overall reasonableness of brokerage commissions paid is evaluated by        
personnel of TIMCO responsible for trading and managing the portfolios of       
Account GIS 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.                    

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                                                        [Enlarge/Download Table]

---------------- ------------- -------------- ------------- ----------------- ---------------
     FUNDS           2003          2002           2001           TOTAL         COMMISSIONS   
                                                               PORTFOLIOS      PAID TO SUCH  
                                                              TRANSACTIONS     BROKERS FOR   
                                                            ASSOCIATED WITH    RESEARCH IN   
                                                                BROKERS            2003      
                                                               PROVIDING                     
                                                                RESEARCH                     
                                                            SERVICES IN 2003                 
---------------- ------------- -------------- ------------- ----------------- ---------------
---------------- ------------- -------------- ------------- ----------------- ---------------
                                                                                             
   Account GIS      $993,021     $1,043,985      $835,455      $341,736,217      $545,194    
---------------- ------------- -------------- ------------- ----------------- ---------------

There were no brokerage commissions paid by Account QB for the fiscal years     
ended December 31, 2001, 2002 and 2003. For the fiscal year ended December 31,  
2003, no portfolio transactions were directed to certain brokers because of     
research services.                                                              

No formulas were used in placing such transactions with brokers who provided    
research services, and no specific amount of transactions was allocated for     
research services. Brokerage business placed with brokers affiliated with any of
the advisers or subadvisers during 2003 follows.                                

TAMIC                                                                           

Investment advice and management for TAMIC's clients (Accounts GIS, QB and MM)  
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 or MM 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 or MM 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                                                                       

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 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 Account QB and     
other clients of TAMIC who may indirectly benefit from the availability of such 
information.                                                                    

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Similarly, Account QB 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 and 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.      

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.             

 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. It is 
expected that the Exchange will be closed on Saturdays and Sundays and on the   
observed holidays of New Year's Day, Martin Luther King, Jr. Day, President's   
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving Day   
and Christmas Day. 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.     

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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, (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.)                                                  

FEDERAL TAX CONSIDERATIONS

The following description of the federal income tax consequences under this     
Contract is general in nature and is therefore 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, a person contemplating purchase of an annuity contract and 
by a Contract Owner or beneficiary who may make elections under a Contract      
should consult with a qualified tax or legal adviser.                           

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MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS                                     

Federal tax law requires that minimum annual distributions begin by April 1st of
the calendar year following the later of calendar year in which a participant   
under a qualified plan or a Section 403(b) annuity attains age 70 1/2 or        
retires. Minimum annual distributions under an IRA must begin by April 1st of   
the calendar year in which the Contract Owner attains 70 1/2 regardless of when 
he or she retires. Distributions must also begin or be continued according to   
the minimum distribution rules under the Code following the death of the        
Contract Owner or the annuitant.                                                

NONQUALIFIED ANNUITY CONTRACTS                                                  

Individuals may purchase tax-deferred annuities without any limits. The purchase
payments receive no tax benefit, deduction or deferral, but taxes on the        
increases in the value of the contract are generally deferred until distribution
and transfers between the various investment options are not subject to tax.    
Generally, if an annuity contract is owned by other than an individual (or an   
entity such as a trust or other "look-through" entity which owns for an         
individual's benefit), the owner will be taxed each year on the increase in the 
value of the contract. An exception applies for purchase payments made before   
March 1, 1986. The benefits of tax deferral of income earned under a            
non-qualified annuity should be compared with the relative federal tax rates on 
income from other types of investments (dividends and capital gains, taxable at 
15% or less) relative to the ordinary income treatment received on annuity      
income.                                                                         

If two or more annuity contracts are purchased from the same insurer within the 
same calendar year, such annuity contract will be aggregated for federal income 
tax purposes. As a result, 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.   

In order to be treated as an annuity contract for federal income tax purposes,  
Section 72(s) of the Code requires any non-qualified contract to contain certain
provisions specifying how your interest in the contract will be distributed in  
the event of the death of an owner of the contract. Specifically, Section 72(s) 
requires that (a) if an owner dies on or after the annuity starting date, but   
prior to the time the entire interest in the contract has been distributed, the 
entire interest in the contract will be distributed at least as rapidly as under
the method of distribution being used as of the date of such owner's death; and 
(b) if any owner dies prior to the annuity starting date, the entire interest in
the contract will be distributed within five years after the date of such       
owner's death. These requirements will be considered satisfied as to any portion
of an owner's interest which is payable to or for the benefit of a designated   
beneficiary and which is distributed over the life of such designated           
beneficiary or over a period not extending beyond the life expectancy of that   
beneficiary, provided that such distributions begin within one year of the      
owner's death. The designated beneficiary refers to a natural person designated 
by the owner as a beneficiary and to whom ownership of the contract passes by   
reason of death. However, if the designated beneficiary is the surviving spouse 
of the deceased owner, the contract may be continued with the surviving         

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spouse as the successor-owner. Contracts will be administered by the Company in 
accordance with these rules and the Company will make a notification when       
payments should be commenced. Special rules apply regarding distribution        
requirements when an annuity is owned by a trust or other entity for the benefit
of one or more individuals.                                                     

INDIVIDUAL RETIREMENT ANNUITIES                                                 

To the extent of earned income for the year and not exceeding the applicable    
limit for the taxable year, an individual may make deductible contributions to  
an individual retirement annuity (IRA). The applicable limit ($2,000 per year   
prior to 2002) has been increased by the Economic Growth and Tax Relief         
Reconciliation Act of 2001 ("EGTRRA"). The limit is $3,000 for calendar years   
2002 - 2004, $4,000 for calendar years 2005-2007, and $5,000 for 2008, and will 
be indexed for inflation in years subsequent to 2008. Additional "catch-up"     
contributions may be made to an IRA by individuals age 50 or over. 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 based on the individual limits     
outlined above.                                                                 

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 up 
to $40,000 for each participant. The Internal Revenue Services has not reviewed 
the contract for qualifications as an IRA, and has not addressed in a ruling of 
general applicability whether a death benefit provision such as the optional    
enhanced death benefit in the contract comports with IRA qualification          
requirements.                                                                   

SIMPLE PLAN IRA FORM                                                            

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 the applicable limit for the taxable year. The applicable limit was    
increased under EGTRRA. The applicable limit was increased under EGTRRA to      
$7,000 for 2002, $8,000 for 2003, $9,000 in 2004, $10,000 in 2005 (which will be
indexed for inflation for years after 2005. (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 or a   
nonelective contribution based on the prescribed formulas 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 (similar to the annual limits for the traditional IRA's), 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                                                                   

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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 
any Roth IRA of the individual.                                                 

QUALIFIED PENSION AND PROFIT-SHARING PLANS                                      

Like most other contributions made 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 generally 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. Under a qualified plan, the investment in the contract may be   
zero.                                                                           

The annual limits that apply to the amounts that may be contributed to a defined
contribution plan each year were increased by EGTRRA. The maximum total annual  
limit was increased from $35,000 to $40,000 ($41,500 for 2004). The limit on    
employee salary reduction deferrals (commonly referred to as "401(k)            
contributions") increase on a graduated basis; $11,000 in 2002, $12,000 in 2003,
$13,000 in 2004, $14,000 in 2005 and $15,000 in 2006. The $15,000 annual limit  
will be indexed for inflation after 2006.                                       

SECTION 403(b) PLANS                                                            

Under Code section 403(b), payments made by public school systems and certain   
tax exempt organizations to purchase annuity contracts for their employees are  
excludable from the gross income of the employee, subject to certain            
limitations. However, these payments may be subject to FICA (Social Security)   
taxes. A qualified contract issued as a tax-sheltered annuity under section     
403(b) will be amended as necessary to conform to the requirements of the Code. 
The annual limits under Code Section 403(b) for employee salary reduction       
deferrals are increased under the same rules applicable to 401(k) plans ($11,000
in 2002, $12,000 in 2003, etc.)                                                 

Code section 403(b)(11) restricts this distribution under Code section 403(b)   
annuity contracts of: (1) elective contributions made in years beginning after  
December 31, 1998; (2) earnings on those contributions; and (3) earnings in such
years on amounts held as of the last year beginning before January 1, 1989.     
Distribution of those amounts may only occur upon death of the employee,        
attainment of age 59 1/2, separation from service, disability, or financial     
hardship. In addition, income attributable to elective contributions may not be 
distributed in the case of hardship.                                            

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,
    FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS, OR FROM 457 PLANS SPONSORED
BY GOVERNMENTAL ENTITIES                                                

There is a mandatory 20% tax withholding for plan distributions that are        
eligible for rollover to an IRA or to another qualified retirement plan         
(including a 457 plan sponsored by a governmental entity) 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                

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                 (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, or

         (d)    the distribution is a hardship distribution.

A distribution including a rollover that is not a direct rollover will be       
subject to the 20% withholding, and the 10% additional tax penalty on premature 
withdrawals 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 subject to 20% mandatory withholding as described 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 portion of the  
distribution will be withheld as federal income tax; provided that the recipient
may elect any other percentage. 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.                                                

Recipients who elect not to have withholding made are liable for payment of     
federal income tax on the taxable portion of the distribution. 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 subject to different    
withholding rules and cannot elect out of withholding.                          

THE BOARD OF MANAGERS AND OFFICERS

The investments and administration of each of the Accounts are under the        
direction of the Board of Managers, listed below. Members of the Board of       
Managers of Accounts GIS, QB and MM, are elected annually by those Contract     
Owners participating in the 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.                                      

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                                                        [Enlarge/Download Table]

---------------------- ----------- ------------- ------------------------------------- -------------- --------------
NAME, ADDRESS AND AGE  POSITION(S)   TERM OF       PRINCIPAL OCCUPATION DURING LAST      NUMBER OF        OTHER     
                       HELD WITH    OFFICE AND                FIVE YEARS                PORTFOLIOS    DIRECTORSHIPS 
                          FUND      LENGTH OF                                             IN FUND        HELD BY    
                                   TIME SERVED                                            COMPLEX       DIRECTOR    
                                                                                        OVERSEEN BY                 
                                                                                         DIRECTOR                   
---------------------- ----------- ------------- ------------------------------------- -------------- --------------
                                                                                                                    
*R. Jay Gerken         Manager     Since 2002    Managing Director (1989 to present)        11          Managing    
 399 Park Avenue                                 of Citigroup Global Markets Inc.                      Director of  
 New York, NY                                    ("CGM"); Chairman, President and                          CGM      
 Age 53                                          CEO of Smith Barney Fund Management                                
                                                 LLC; Travelers Investment                                          
                                                 Adviser, Inc. and CitiFund                                         
                                                 Management Inc. Chairman, Chief                                    
                                                 Executive Officer and                                              
                                                 President, Board of Managers                                       
                                                 (2002-present), six Variable                                       
                                                 Annuity Separate Accounts of                                       
                                                 The Travelers Insurance                                            
                                                 Company+; Chairman, Board of                                       
                                                 Trustees (2002-present), five                                      
                                                 Mutual Funds sponsored by The                                      
                                                 Travelers Insurance Company.++                                     
---------------------- ----------- ------------- ------------------------------------- -------------- --------------
Ernest J. Wright       Secretary   Since 1994    Vice President and Secretary               11             N/A      
One Cityplace          to the                    (1996-present), Assistant Secretary                                
Hartford, CT           Board                     (1994-1996), Counsel                                               
Age 63                                           (1987-present), The Travelers                                      
                                                 Insurance Company; Secretary                                       
                                                 (1994-present), six Variable                                       
                                                 Annuity Separate Accounts of                                       
                                                 The Travelers Insurance                                            
                                                 Company+; Secretary                                                
                                                 (1994-present), five Mutual                                        
                                                 Funds sponsored by The                                             
                                                 Travelers Insurance Company.++                                     
---------------------- ----------- ------------- ------------------------------------- -------------- --------------
Kathleen A. McGah      Assistant   Since 1995    Deputy General Counsel (1999 -             11             N/A      
One Cityplace          Secretary                 present); Assistant Secretary                                      
Hartford, CT               to                    (1995-present), The Travelers                                      
Age 53                 The Board                 Insurance Company; Assistant                                       
                                                 Secretary (1995-present), six                                      
                                                 Variable Annuity Separate                                          
                                                 Accounts of The Travelers                                          
                                                 Insurance Company+; Assistant                                      
                                                 Secretary, (1995-present), five                                    
                                                 Mutual Funds sponsored by The                                      
                                                 Travelers Insurance Company.++                                     
---------------------- ----------- ------------- ------------------------------------- -------------- --------------
David A. Golino        Principal   Since 1998    Vice President and Controller (1999         6             N/A      
One Cityplace          Accounting                - present); Second Vice President                                  
Hartford, CT           Officer                   (1996-1999), The Travelers                                         
Age 42                                           Insurance Company; Principal                                       
                                                 Accounting Officer (1998-present),                                 
                                                 six Variable Annuity Separate                                      
                                                 Accounts of The Travelers Insurance                                
                                                 Company.+                                                          
---------------------- ----------- ------------- ------------------------------------- -------------- --------------
William D. Wilcox      Chief AML   Since 2002    Counsel and Chief Compliance                6             N/A      
One Cityplace          Compliance                Officer (1999 - present); The                                      
Hartford, CT           Officer                   Travelers Insurance Company; Chief                                 
Age 39                                           AML Compliance (2002-present), six                                 
                                                 Variable Annuity Separate Accounts                                 
                                                 of The Travelers Insurance Company.+                               
---------------------- ----------- ------------- ------------------------------------- -------------- --------------

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INDEPENDENT MANAGERS                                                            

                                                        [Enlarge/Download Table]

----------------------- ----------- ------------- ------------------------------------- ------------- ----------------
NAME, ADDRESS AND AGE   POSITION(S)   TERM OF       PRINCIPAL OCCUPATION DURING LAST     NUMBER OF         OTHER      
                        HELD WITH    OFFICE AND                FIVE YEARS                PORTFOLIOS    DIRECTORSHIPS  
                           FUND      LENGTH OF                                            IN FUND         HELD BY     
                                    TIME SERVED                                           COMPLEX        DIRECTOR     
                                                                                        OVERSEEN BY                   
                                                                                          DIRECTOR                    
----------------------- ----------- ------------- ------------------------------------- ------------- ----------------
                                                                                                                      
Robert E. McGill, III   Manager     Since 1974    Retired manufacturing executive.           11            None       
295 Hancock Street                                Director (1983-1995), Executive                                     
Williamstown, MA                                  Vice President (1989-1994) and                                      
Age 73                                            Senior Vice President, Finance and                                  
                                                  Administration (1983-1989),                                         
                                                  The Dexter Corporation                                              
                                                  (manufacturer of specialty                                          
                                                  chemicals and materials); Vice                                      
                                                  Chairman (1990-1992), Director                                      
                                                  (1983-1995), Life                                                   
                                                  Technologies, Inc. (life                                            
                                                  science/biotechnology                                               
                                                  products); Director,                                                
                                                  (1994-1999), The Connecticut                                        
                                                  Surety Corporation                                                  
                                                  (insurance); Director                                               
                                                  (1995-2000), Chemfab                                                
                                                  Corporation (specialty                                              
                                                  materials manufacturer);                                            
                                                  Director (1999-2001),                                               
                                                  Ravenwood Winery, Inc.;                                             
                                                  Director (1999-2003), Lydall                                        
                                                  Inc. (manufacturer of fiber                                         
                                                  materials); Member, Board of                                        
                                                  Managers (1974-present), six                                        
                                                  Variable Annuity Separate                                           
                                                  Accounts of The Travelers                                           
                                                  Insurance Company+; Trustee                                         
                                                  (1990-present), five Mutual                                         
                                                  Funds sponsored by The                                              
                                                  Travelers Insurance Company.++                                      
----------------------- ----------- ------------- ------------------------------------- ------------- --------------- 
Lewis Mandell           Manager     Since 1990    Professor of Finance and Managerial        11       Director        
160 Jacobs Halls                                  Economics, University at Buffalo                    (2000-present), 
Buffalo, NY                                       since 1998. Dean, School of                         Delaware        
Age 61                                            Management (1998-2001), University                  North Corp.     
                                                  at Buffalo; Dean, College of                        (hospitality    
                                                  Business Administration                             business)       
                                                  (1995-1998), Marquette University;                                  
                                                  Professor of Finance (1980-1995)                                    
                                                  and Associate Dean (1993-1995),                                     
                                                  School of Business Administration,                                  
                                                  and Director, Center for Research                                   
                                                  and Development in Financial                                        
                                                  Services (1980-1995), University of                                 
                                                  Connecticut; Member, Board of                                       
                                                  Managers (1990-present), six                                        
                                                  Variable Annuity Separate Accounts                                  
                                                  of The Travelers Insurance                                          
                                                  Company+; Trustee (1990-present),                                   
                                                  five Mutual Funds sponsored by The                                  
                                                  Travelers Insurance Company.++                                      
----------------------- ----------- ------------- ------------------------------------- ------------- --------------- 
Frances M. Hawk,         Manager     Since 1991   Private Investor, (1997-present);          11            None       
  CFA, CFP                                        Portfolio Manager (1992-1997), HLM                                  
108 Oxford Hill Lane                              Management Company, Inc.                                            
Downingtown, PA                                   (investment management); Assistant                                  
Age 56                                            Treasurer, Pensions and Benefits.                                   
                                                  Management (1989-1992), United                                      
                                                  Technologies Corporation                                            
                                                  (broad-based designer and                                           
                                                  manufacturer of high                                                
                                                  technology products); Member,                                       
                                                  Board of Managers                                                   
                                                  (1991-present), six Variable                                        
                                                  Annuity Separate Accounts of                                        
                                                  The Travelers Insurance                                             
                                                  Company+; Trustee                                                   
                                                  (1991-present), five Mutual                                         
                                                  Funds sponsored by The                                              
                                                  Travelers Insurance Company.++                                      
----------------------- ----------- ------------- ------------------------------------- ------------- --------------- 

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      These three Variable Annuity Separate Accounts are: The Travelers Growth
    and Income Stock Account for Variable Annuities, The Travelers Quality
 Bond Account for Variable Annuities, and The Travelers Money Market
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. Gerken 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 his
       ownership of 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 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.                   

The following table sets forth the dollar range of equity securities in the     
Accounts beneficially owned by a Manager of the Board of Managers, and, on an   
aggregate basis, in all registered investment companies overseen by a Manager   
within the same family of investment companies as any Account:                  

                                                        [Enlarge/Download Table]

-------------------------------------- ------------------------------------ ------------------------------------
                                                                             AGGREGATE DOLLAR RANGE OF EQUITY   
                                                                               SECURITIES IN ALL REGISTERED     
                                                                             INVESTMENT COMPANIES OVERSEEN BY   
                                                                            THE MANAGER WITHIN THE SAME FAMILY  
               MANAGER                  DOLLAR RANGE OF EQUITY SECURITIES     OF INVESTMENT COMPANIES AS ANY    
                                                 IN ANY ACCOUNT                           ACCOUNT               
-------------------------------------- ------------------------------------ ------------------------------------
                                                                                                                
R. Jay Gerken                                         None                                 None                 
-------------------------------------- ------------------------------------ ------------------------------------
Robert E. McGill, III                                 None                                 None                 
-------------------------------------- ------------------------------------ ------------------------------------
Lewis Mandell                                         None                                 None                 
-------------------------------------- ------------------------------------ ------------------------------------
Frances M. Hawk                                       None                                 None                 
-------------------------------------- ------------------------------------ ------------------------------------

COMMITTEES. To operate more efficiently, the Board established two operating    
committees. The Nominating and Administration Committee recommends candidates   
for the nomination as members of the Board. The Nominating and Administration   
Committee will consider nominee recommendations by Contract Owners. Such        
recommendations should be submitted in care of The Travelers Insurance Company, 
using the address on the cover page of this SAI. For the year ended December 31,
2003, the Nominating and Administration Committee met two times. The Audit      
Committee reviews the scope and results of the Fund's annual audits with the    
Fund's independent accountants and recommends the engagement of the accountants.
For the year ended December 31, 2003, the Audit Committee met three times. For  
the year ended December 31, 2003, the members of the Nominating and Audit       
Committees were Robert E. McGill III, Lewis Mandell, and Frances M. Hawk.       
Trustees do not receive any additional compensation for their committee         
services.                                                                       

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 $25,000 for service on the Boards 
of six Variable Annuity Separate Accounts established by The Travelers          

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Insurance Company and the five Mutual Funds sponsored by The Travelers Insurance
Company. They also receive an aggregate fee of $3,500 for each meeting of such  
Boards attended and $1,000 for the second day and each subsequent day of a      
regular meeting. 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.    

 DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT

Travelers Distribution LLC ("TDLLC") serves as principal underwriter for Fund U 
and each Separate Account. The offering is continuous. TDLLC's principal        
executive offices are located at P.O. Box 990026, Hartford, Connecticut. TDLLC  
is affiliated with the Company and Fund U and each Separate Account.            

Under the terms of the Distribution and Principal Underwriting Agreement among  
Fund U and each Separate Account, TDLLC and the Company, TDLLC acts as agent for
the distribution of the Contracts and as principal underwriter for the          
Contracts. The Company reimburses TDLLC for certain sales and overhead expenses 
connected with sales functions.                                                 

The following table shows the amount of commissions paid to and the amount of   
commissions retained by TDLLC over the past three years.                        

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                                TDLLC UNDERWRITING COMMISSIONS

                                                        [Enlarge/Download Table]

------------------------------------- ------------------------------------- ------------------------------------
                                        UNDERWRITING COMMISSIONS PAID TO    AMOUNT OF UNDERWRITING COMMISSIONS  
YEAR                                          TDLLC BY THE COMPANY                   RETAINED BY TDLLC          
------------------------------------- ------------------------------------- ------------------------------------
                                                                                                                
2003                                                $73,223                                 $0                  
------------------------------------- ------------------------------------- ------------------------------------
2002                                                $88,393                                 $0                  
------------------------------------- ------------------------------------- ------------------------------------
2001                                               $104,518                                 $0                  
------------------------------------- ------------------------------------- ------------------------------------

 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 and TAS, 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:                         

------------------ ----------------- ----------------- -----------------        
SEPARATE ACCOUNT       2003              2002              2001               
------------------ ----------------- ----------------- -----------------        
GIS               $6,417,236        $7,430,006        $9,585,953  
------------------ ----------------- ----------------- -----------------        
QB               $1,496,126        $1,582,350        $1,674,973 
------------------ ----------------- ----------------- -----------------        
MM               $1,566,496        $2,085,552        $2,295,238 
------------------ ----------------- ----------------- -----------------        
U               $65,448,164       $69,225,672       $83,803,804 
------------------ ----------------- ----------------- -----------------        

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 and TAS.                                                      

 INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

An Annual Report for each of Accounts GIS, QB, and MM has been filed with the   
Securities and Exchange Commission. The Annual Reports are incorporated by      
reference into this Statement of Additional Information and copies of each      
Annual Report must accompany this Statement of Additional Information. Each     
Account's Annual Report contains audited financial statements for each Account's
latest fiscal year.                                                             

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 INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The financial statements of Accounts GIS, QB, and MM as of December 31, 2003,   
and for each of the years in the two-year period ended December 31, 2003,       
included in the Annual Reports (for each) have been incorporated by reference   
herein in reliance upon the reports of KPMG LLP, independent registered public  
accounting firm, also incorporated by reference herein, and upon the authority  
of said firm as experts in accounting and auditing.                             

The consolidated financial statements and schedules of The Travelers Insurance  
Company and subsidiaries as of December 31, 2003 and 2002, and for each of the  
years in the three-year period ended December 31, 2003, and the financial       
statements of The Travelers Fund U for Variable Annuities as of December 31,    
2003, and for each of the years in the two-year period ended December 31, 2003, 
have been included herein in reliance upon the reports of KPMG LLP, independent 
registered public accounting firm, appearing elsewhere herein, and upon the     
authority of said firm as experts in accounting and auditing. The audit reports 
covering the December 31, 2003, consolidated financial statements and schedules 
of The Travelers Insurance Company and subsidiaries refer to changes in the     
Company's methods of accounting for variable interest entities in 2003, for     
goodwill and intangible assets in 2002, and for derivative instruments and      
hedging activities and for securitized financial assets in 2001.                

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THE TRAVELERS VARIABLE ANNUITIES

 INDIVIDUAL VARIABLE ANNUITY CONTRACTS
 ISSUED BY
 THE TRAVELERS INSURANCE COMPANY

L-24422S                                                        October 25, 2004

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ANNUAL REPORT                                                                   
DECEMBER 31, 2003                                                               

THE TRAVELERS FUND U      
FOR VARIABLE ANNUITIES    

[TRAVELERS LIFE & ANNUITY LOGO]                                                 

The Travelers Insurance Company                                                 
The Travelers Life and Annuity Company                                          
One Cityplace                                                                   
Hartford, CT 06103                                                              

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THE TRAVELERS FUND U
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 STATEMENT OF ASSETS AND LIABILITIES
 DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                    CAPITAL APPRECIATION   DREYFUS STOCK INDEX   HIGH-YIELD BOND                      
                                            FUND          FUND - INITIAL SHARES       TRUST       MANAGED ASSETS TRUST
                                    --------------------  ---------------------  ---------------  --------------------
                                                                                                                      
ASSETS:                                                                                                               

   Investments at market value:         $510,318,392           $416,933,931        $ 47,233,700       $219,076,196    
                                        ------------           ------------        ------------       ------------    

      Total Assets ................      510,318,392            416,933,931          47,233,700        219,076,196    
                                        ------------           ------------        ------------       ------------    

LIABILITIES:                                                                                                          

   Payables:                                                                                                          

      Insurance charges ...........           86,856                 70,678               8,056             37,290    
                                        ------------           ------------        ------------       ------------    

         Total Liabilities ........           86,856                 70,678               8,056             37,290    
                                        ------------           ------------        ------------       ------------    

NET ASSETS:                             $510,231,536           $416,863,253        $ 47,225,644       $219,038,906    
                                        ============           ============        ============       ============    

See Notes to Financial Statements 

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 DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                      ALLIANCEBERNSTEIN                              CITISTREET         CITISTREET LARGE   
                                       PREMIER GROWTH    CITISTREET DIVERSIFIED  INTERNATIONAL STOCK  COMPANY STOCK FUND - 
                                    PORTFOLIO - CLASS B   BOND FUND - CLASS I      FUND - CLASS I           CLASS I        
                                    -------------------  ----------------------  -------------------  ---------------------
                                                                                                                           
ASSETS:                                                                                                                    

   Investments at market value:        $  2,040,753           $333,113,658          $219,055,938         $337,950,332      
                                       ------------           ------------          ------------         ------------      

      Total Assets ................       2,040,753            333,113,658           219,055,938          337,950,332      
                                       ------------           ------------          ------------         ------------      

LIABILITIES:                                                                                                               

   Payables:                                                                                                               

      Insurance charges ...........             345                 57,085                36,853               57,228      
                                       ------------           ------------          ------------         ------------      

         Total Liabilities ........             345                 57,085                36,853               57,228      
                                       ------------           ------------          ------------         ------------      

NET ASSETS:                            $  2,040,408           $333,056,573          $219,019,085         $337,893,104      
                                       ============           ============          ============         ============      

See Notes to Financial Statements 

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 STATEMENT OF ASSETS AND LIABILITIES - CONTINUED

 DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                             DREYFUS VIF                                                    TEMPLETON    
  CITISTREET SMALL    DELAWARE VIP REIT   DEVELOPING LEADERS                            MUTUAL SHARES     GLOBAL ASSET   
COMPANY STOCK FUND -  SERIES - STANDARD  PORTFOLIO - INITIAL    FRANKLIN SMALL CAP   SECURITIES FUND -  ALLOCATION FUND -
      CLASS I               CLASS               SHARES        FUND - CLASS 2 SHARES    CLASS 2 SHARES    CLASS 1 SHARES  
--------------------  -----------------  -------------------  ---------------------  -----------------  -----------------
                                                                                                                         
   $215,198,464         $  5,578,518         $ 57,379,030          $  2,715,657         $  1,784,868      $155,663,675   
   ------------         ------------         ------------          ------------         ------------      ------------   

    215,198,464            5,578,518           57,379,030             2,715,657            1,784,868       155,663,675   
   ------------         ------------         ------------          ------------         ------------      ------------   

         36,811                  933                9,783                   466                  295            26,287   
   ------------         ------------         ------------          ------------         ------------      ------------   

         36,811                  933                9,783                   466                  295            26,287   
   ------------         ------------         ------------          ------------         ------------      ------------   

   $215,161,653         $  5,577,585         $ 57,369,247          $  2,715,191         $  1,784,573      $155,637,388   
   ============         ============         ============          ============         ============      ============   

See Notes to Financial Statements 

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FOR VARIABLE ANNUITIES

 STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
 DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                     TEMPLETON GROWTH                                   INTERNATIONAL GROWTH
                                    SECURITIES FUND -  APPRECIATION  FUNDAMENTAL VALUE      PORTFOLIO -     
                                      CLASS 1 SHARES    PORTFOLIO        PORTFOLIO         SERVICE SHARES   
                                    -----------------  ------------  -----------------  --------------------
                                                                                                            
ASSETS:                                                                                                     

   Investments at market value:        $300,952,048    $  3,006,088    $ 30,196,167         $  2,890,497    
                                       ------------    ------------    ------------         ------------    

      Total Assets ................     300,952,048       3,006,088      30,196,167            2,890,497    
                                       ------------    ------------    ------------         ------------    

LIABILITIES:                                                                                                

   Payables:                                                                                                

      Insurance charges ...........          50,789             505           5,104                  484    
                                       ------------    ------------    ------------         ------------    

         Total Liabilities ........          50,789             505           5,104                  484    
                                       ------------    ------------    ------------         ------------    

NET ASSETS:                            $300,901,259    $  3,005,583    $ 30,191,063         $  2,890,013    
                                       ============    ============    ============         ============    

See Notes to Financial Statements 

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 STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
 DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                      TOTAL RETURN      PUTNAM VT                                                          
                      PORTFOLIO -     INTERNATIONAL   PUTNAM VT SMALL CAP                                  
 LAZARD RETIREMENT   ADMINISTRATIVE   EQUITY FUND -       VALUE FUND -     ALL CAP FUND -  INVESTORS FUND -
SMALL CAP PORTFOLIO      CLASS       CLASS IB SHARES    CLASS IB SHARES       CLASS I          CLASS I     
-------------------  --------------  ---------------  -------------------  --------------  ----------------
                                                                                                           
   $  2,535,837       $  2,427,213     $  3,182,368       $ 35,497,507      $ 22,440,031     $  5,194,682  
   ------------       ------------     ------------       ------------      ------------     ------------  

      2,535,837          2,427,213        3,182,368         35,497,507        22,440,031        5,194,682  
   ------------       ------------     ------------       ------------      ------------     ------------  

            432                408              541              6,077             3,784              877  
   ------------       ------------     ------------       ------------      ------------     ------------  

            432                408              541              6,077             3,784              877  
   ------------       ------------     ------------       ------------      ------------     ------------  

   $  2,535,405       $  2,426,805     $  3,181,827       $ 35,491,430      $ 22,436,247     $  5,193,805  
   ============       ============     ============       ============      ============     ============  

See Notes to Financial Statements 

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 STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
 DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                    SMALL CAP GROWTH  DISCIPLINED MID CAP    MFS MID CAP     PIONEER FUND
                                     FUND - CLASS I     STOCK PORTFOLIO    GROWTH PORTFOLIO   PORTFOLIO  
                                    ----------------  -------------------  ----------------  ------------
                                                                                                         
ASSETS:                                                                                                  

   Investments at market value:       $  5,080,613       $ 43,347,071        $  6,257,040    $ 17,685,031
                                      ------------       ------------        ------------    ------------

      Total Assets ................      5,080,613         43,347,071           6,257,040      17,685,031
                                      ------------       ------------        ------------    ------------

LIABILITIES:                                                                                             

   Payables:                                                                                             

      Insurance charges ...........            864              7,412               1,060           3,004
                                      ------------       ------------        ------------    ------------

         Total Liabilities ........            864              7,412               1,060           3,004
                                      ------------       ------------        ------------    ------------

NET ASSETS:                           $  5,079,749       $ 43,339,659        $  6,255,980    $ 17,682,027
                                      ============       ============        ============    ============

See Notes to Financial Statements 

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 DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                                     SALOMON BROTHERS                                       
                  U.S. GOVERNMENT                       STRATEGIC      SB ADJUSTABLE RATE     SMITH BARNEY  
SOCIAL AWARENESS    SECURITIES     MFS TOTAL RETURN    TOTAL RETURN    INCOME PORTFOLIO -  AGGRESSIVE GROWTH
STOCK PORTFOLIO      PORTFOLIO        PORTFOLIO       BOND PORTFOLIO     CLASS I SHARES        PORTFOLIO    
----------------  ---------------  ----------------  ----------------  ------------------  -----------------
                                                                                                            
  $ 38,525,987     $ 91,533,736     $ 88,691,507       $    672,727       $     36,738        $ 39,155,214  
  ------------     ------------     ------------       ------------       ------------        ------------  

    38,525,987       91,533,736       88,691,507            672,727             36,738          39,155,214  
  ------------     ------------     ------------       ------------       ------------        ------------  

         6,532           15,730           15,103                115                  6               6,615  
  ------------     ------------     ------------       ------------       ------------        ------------  

         6,532           15,730           15,103                115                  6               6,615  
  ------------     ------------     ------------       ------------       ------------        ------------  

  $ 38,519,455     $ 91,518,006     $ 88,676,404       $    672,612       $     36,732        $ 39,148,599  
  ============     ============     ============       ============       ============        ============  

See Notes to Financial Statements 

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 STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
 DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                     SMITH BARNEY                                                        
                                    INTERNATIONAL     SMITH BARNEY   SMITH BARNEY LARGE                  
                                    ALL CAP GROWTH  LARGE CAP VALUE    CAPITALIZATION    STRATEGIC EQUITY
                                      PORTFOLIO        PORTFOLIO      GROWTH PORTFOLIO      PORTFOLIO    
                                    --------------  ---------------  ------------------  ----------------
                                                                                                         
ASSETS:                                                                                                  

   Investments at market value:      $ 18,166,298    $ 23,770,027       $ 16,230,319       $ 79,250,371  
                                     ------------    ------------       ------------       ------------  

      Total Assets ................    18,166,298      23,770,027         16,230,319         79,250,371  
                                     ------------    ------------       ------------       ------------  

LIABILITIES:                                                                                             

   Payables:                                                                                             

      Insurance charges ...........         3,165           4,018              2,737             13,478  
                                     ------------    ------------       ------------       ------------  

         Total Liabilities ........         3,165           4,018              2,737             13,478  
                                     ------------    ------------       ------------       ------------  

NET ASSETS:                          $ 18,163,133    $ 23,766,009       $ 16,227,582       $ 79,236,893  
                                     ============    ============       ============       ============  

See Notes to Financial Statements 

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 STATEMENT OF ASSETS AND LIABILITIES - CONTINUED
 DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

    COMSTOCK     EQUITY - INCOME                       HIGH INCOME   ASSET MANAGER   CONTRAFUND(R) 
  PORTFOLIO -      PORTFOLIO -    GROWTH PORTFOLIO -   PORTFOLIO -    PORTFOLIO -     PORTFOLIO -  
CLASS II SHARES   INITIAL CLASS     INITIAL CLASS     INITIAL CLASS  INITIAL CLASS  SERVICE CLASS 2
---------------  ---------------  ------------------  -------------  -------------  ---------------

                                                                                                   
  $  1,887,987     $354,531,428      $566,372,257      $ 45,213,497   $248,586,346   $  3,851,036  
  ------------     ------------      ------------      ------------   ------------   ------------  

     1,887,987      354,531,428       566,372,257        45,213,497    248,586,346      3,851,036  
  ------------     ------------      ------------      ------------   ------------   ------------  

           319           60,066            96,140             7,713         42,367            531  
  ------------     ------------      ------------      ------------   ------------   ------------  

           319           60,066            96,140             7,713         42,367            531  
  ------------     ------------      ------------      ------------   ------------   ------------  

  $  1,887,668     $354,471,362      $566,276,117      $ 45,205,784   $248,543,979   $  3,850,505  
  ============     ============      ============      ============   ============   ============  

See Notes to Financial Statements 

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 STATEMENT OF ASSETS AND LIABILITIES - CONTINUED

 DECEMBER 31, 2003

               MID CAP
               PORTFOLIO -
                                   SERVICE CLASS 2            COMBINED
                                      ---------------         --------------

ASSETS:                                                                         

 Investments at market value: ...       $17,592,841           $4,638,803,621
                                        -----------           --------------

    Total Assets ................        17,592,841            4,638,803,621
                                        -----------           --------------

LIABILITIES:                                                                    

Payables:                                                                 

    Insurance charges ...........             2,969                  787,911
                                        -----------           --------------

       Total Liabilities ........             2,969                  787,911
                                        -----------           --------------

NET ASSETS:                               $17,589,872           $4,638,015,710  
                                        ===========           ==============

 See Notes to Financial Statements

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THE TRAVELERS FUND U
FOR VARIABLE ANNUITIES

 STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                                        CAPITAL           DREYFUS                                  
                                                      APPRECIATION   STOCK INDEX FUND -  HIGH YIELD  MANAGED ASSETS
                                                          FUND         INITIAL SHARES    BOND TRUST      TRUST     
                                                      ------------   ------------------  ----------  --------------
                                                                                                                   
INVESTMENT INCOME:                                                                                                 

   Dividends ........................................ $    233,874       $ 5,443,671     $3,208,013   $ 5,178,777  
                                                      ------------       -----------     ----------   -----------  

EXPENSES:                                                                                                          

   Insurance charges ................................    5,850,985         4,544,286        495,428     2,505,284  
                                                      ------------       -----------     ----------   -----------  

      Net investment income (loss) ..................   (5,617,111)          899,385      2,712,585     2,673,493  
                                                      ------------       -----------     ----------   -----------  

REALIZED GAIN (LOSS) AND UNREALIZED                                                                                
   GAIN (LOSS) ON INVESTMENTS:                                                                                     

      Realized gain distribution ....................           --                --             --            --  
      Realized gain (loss) on sale of investments ...  (13,188,908)       (1,759,837)       134,908    (1,976,258) 
                                                      ------------       -----------     ----------   -----------  

         Realized gain (loss) .......................  (13,188,908)       (1,759,837)       134,908    (1,976,258) 
                                                      ------------       -----------     ----------   -----------  

      Change in unrealized gain (loss)                                                                             
         on investments .............................  119,132,374        89,220,745      6,619,277    36,878,964  
                                                      ------------       -----------     ----------   -----------  

   Net increase (decrease) in net assets                                                                           
      resulting from operations ..................... $100,326,355       $88,360,293     $9,466,770   $37,576,199  
                                                      ============       ===========     ==========   ===========  

See Notes to Financial Statements 

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 STATEMENT OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                                      ALLIANCEBERNSTEIN   CITISTREET     CITISTREET     CITISTREET 
                                                        PREMIER GROWTH   DIVERSIFIED   INTERNATIONAL  LARGE COMPANY
                                                         PORTFOLIO -     BOND FUND -    STOCK FUND -   STOCK FUND -
                                                           CLASS B         CLASS I        CLASS I        CLASS I   
                                                      -----------------  -----------   -------------  -------------
                                                                                                                   
INVESTMENT INCOME:                                                                                                 

   Dividends ........................................    $         --    $13,546,139   $  1,512,651   $  2,060,358 
                                                         ------------    -----------   ------------   ------------ 

EXPENSES:                                                                                                          

   Insurance charges ................................          19,311      4,205,296      2,436,579      3,671,886 
                                                         ------------    -----------   ------------   ------------ 

      Net investment income (loss) ..................         (19,311)     9,340,843       (923,928)    (1,611,528)
                                                         ------------    -----------   ------------   ------------ 

REALIZED GAIN (LOSS) AND UNREALIZED                                                                                
   GAIN (LOSS) ON INVESTMENTS:                                                                                     

      Realized gain distribution ....................              --             --             --             -- 
      Realized gain (loss) on sale of investments ...        (160,114)     5,164,306    (25,446,031)   (11,890,897)
                                                         ------------    -----------   ------------   ------------ 

         Realized gain (loss) .......................        (160,114)     5,164,306    (25,446,031)   (11,890,897)
                                                         ------------    -----------   ------------   ------------ 

      Change in unrealized gain (loss)                                                                             
         on investments .............................         472,517       (272,593)    76,999,753     84,764,879 
                                                         ------------    -----------   ------------   ------------ 

   Net increase (decrease) in net assets                                                                           
      resulting from operations .....................    $    293,092    $14,232,556   $ 50,629,794   $ 71,262,454 
                                                         ============    ===========   ============   ============ 

See Notes to Financial Statements 

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FOR VARIABLE ANNUITIES

 STATEMENT OF OPERATIONS - CONTINUED

FOR THE YEAR ENDED DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

  CITISTREET                         DREYFUS VIF                                               TEMPLETON    
SMALL COMPANY       DELAWARE      DEVELOPING LEADERS      FRANKLIN        MUTUAL SHARES       GLOBAL ASSET  
 STOCK FUND -  VIP REIT SERIES -     PORTFOLIO -      SMALL CAP FUND -  SECURITIES FUND -  ALLOCATION FUND -
   CLASS I       STANDARD CLASS     INITIAL SHARES     CLASS 2 SHARES     CLASS 2 SHARES     CLASS 1 SHARES 
-------------  -----------------  ------------------  ----------------  -----------------  -----------------
                                                                                                            
$    233,516      $         --       $     14,654       $         --       $        865       $  3,800,029  
------------      ------------       ------------       ------------       ------------       ------------  

   2,199,460            19,446            585,317             18,955              6,007          1,702,184  
------------      ------------       ------------       ------------       ------------       ------------  

  (1,965,944)          (19,446)          (570,663)           (18,955)            (5,142)         2,097,845  
------------      ------------       ------------       ------------       ------------       ------------  

          --                --                 --                 --                 --                 --  
  (4,147,917)            8,408         (2,329,703)            40,341              2,557         (2,371,806) 
------------      ------------       ------------       ------------       ------------       ------------  

  (4,147,917)            8,408         (2,329,703)            40,341              2,557         (2,371,806) 
------------      ------------       ------------       ------------       ------------       ------------  

  69,806,980           535,793         15,670,224            451,460            146,081         37,747,541  
------------      ------------       ------------       ------------       ------------       ------------  

$ 63,693,119      $    524,755       $ 12,769,858       $    472,846       $    143,496       $ 37,473,580  
============      ============       ============       ============       ============       ============  

See Notes to Financial Statements 

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 STATEMENT OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                                       TEMPLETON GROWTH                FUNDAMENTAL    INTERNATIONAL   
                                                      SECURITIES FUND -  APPRECIATION    VALUE      GROWTH PORTFOLIO -
                                                        CLASS 1 SHARES    PORTFOLIO     PORTFOLIO     SERVICE SHARES  
                                                      -----------------  ------------  -----------  ------------------
                                                                                                                      
INVESTMENT INCOME:                                                                                                    

   Dividends ........................................    $  4,405,417    $    17,147   $  154,848      $    18,828    
                                                         ------------    -----------   ----------      -----------    

EXPENSES:                                                                                                             

   Insurance charges ................................       3,267,377         21,060      260,804           21,346    
                                                         ------------    -----------   ----------      -----------    

      Net investment income (loss) ..................       1,138,040         (3,913)    (105,956)          (2,518)   
                                                         ------------    -----------   ----------      -----------    

REALIZED GAIN (LOSS) AND UNREALIZED                                                                                   
   GAIN (LOSS) ON INVESTMENTS:                                                                                        

      Realized gain distribution ....................              --             --           --               --    
      Realized gain (loss) on sale of investments ...     (12,331,040)        14,493     (152,362)         431,452    
                                                         ------------    -----------   ----------      -----------    

         Realized gain (loss) .......................     (12,331,040)        14,493     (152,362)         431,452    
                                                         ------------    -----------   ----------      -----------    

      Change in unrealized gain (loss)                                                                                
         on investments .............................      84,183,393        387,117    7,185,410          221,622    
                                                         ------------    -----------   ----------      -----------    

   Net increase (decrease) in net assets                                                                              
      resulting from operations .....................    $ 72,990,393    $   397,697   $6,927,092      $   650,556    
                                                         ============    ===========   ==========      ===========    

See Notes to Financial Statements 

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 STATEMENT OF OPERATIONS - CONTINUED
FOR THE YEAR ENDED DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                    TOTAL RETURN      PUTNAM VT        PUTNAM VT                                     
LAZARD RETIREMENT    PORTFOLIO -    INTERNATIONAL      SMALL CAP                                     
    SMALL CAP      ADMINISTRATIVE   EQUITY FUND -    VALUE FUND -    ALL CAP FUND -  INVESTORS FUND -
    PORTFOLIO           CLASS      CLASS IB SHARES  CLASS IB SHARES      CLASS I          CLASS I    
-----------------  --------------  ---------------  ---------------  --------------  ----------------
                                                                                                     
  $         --      $     23,451    $     19,332     $     79,518     $     47,671     $     63,741  
  ------------      ------------    ------------     ------------     ------------     ------------  

         7,526            11,750          31,323          314,167          191,563           47,964  
  ------------      ------------    ------------     ------------     ------------     ------------  

        (7,526)           11,701         (11,991)        (234,649)        (143,892)          15,777  
  ------------      ------------    ------------     ------------     ------------     ------------  

            --            18,044              --               --               --               --  
        10,625           (11,510)        423,027         (277,554)        (232,240)         (60,421) 
  ------------      ------------    ------------     ------------     ------------     ------------  

        10,625             6,534         423,027         (277,554)        (232,240)         (60,421) 
  ------------      ------------    ------------     ------------     ------------     ------------  

       207,505           (11,970)        325,208       10,853,335        5,406,513        1,141,309  
  ------------      ------------    ------------     ------------     ------------     ------------  

  $    210,604      $      6,265    $    736,244     $ 10,341,132     $  5,030,381     $  1,096,665  
  ============      ============    ============     ============     ============     ============  

See Notes to Financial Statements 

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FOR THE YEAR ENDED DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                                        SMALL CAP     DISCIPLINED   MFS MID CAP              
                                                      GROWTH FUND -  MID CAP STOCK     GROWTH    PIONEER FUND
                                                         CLASS I       PORTFOLIO     PORTFOLIO    PORTFOLIO  
                                                      -------------  -------------  -----------  ------------
                                                                                                             
INVESTMENT INCOME:                                                                                           

   Dividends ........................................ $         --    $   111,899   $       --   $   233,797 
                                                      ------------    -----------   ----------   ----------- 

EXPENSES:                                                                                                    

   Insurance charges ................................       22,352        434,212       45,625       202,014 
                                                      ------------    -----------   ----------   ----------- 

      Net investment income (loss) ..................      (22,352)      (322,313)     (45,625)       31,783 
                                                      ------------    -----------   ----------   ----------- 

REALIZED GAIN (LOSS) AND UNREALIZED                                                                          
   GAIN (LOSS) ON INVESTMENTS:                                                                               

      Realized gain distribution ....................           --             --           --            -- 
      Realized gain (loss) on sale of investments ...     (141,527)      (594,697)    (175,362)   (1,700,409)
                                                      ------------    -----------   ----------   ----------- 

      Realized gain (loss) ..........................     (141,527)      (594,697)    (175,362)   (1,700,409)
                                                      ------------    -----------   ----------   ----------- 

   Change in unrealized gain (loss)                                                                          
      on investments ................................      861,010     10,883,726    1,225,110     4,961,325 
                                                      ------------    -----------   ----------   ----------- 

   Net increase (decrease) in net assets                                                                     
      resulting from operations ..................... $    697,131    $ 9,966,716   $1,004,123   $ 3,292,699 
                                                      ============    ===========   ==========   =========== 

See Notes to Financial Statements 

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FOR THE YEAR ENDED DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                                     SALOMON BROTHERS                                       
                  U.S. GOVERNMENT                        STRATEGIC     SB ADJUSTABLE RATE    SMITH BARNEY   
SOCIAL AWARENESS    SECURITIES     MFS TOTAL RETURN    TOTAL RETURN    INCOME PORTFOLIO -  AGGRESSIVE GROWTH
STOCK PORTFOLIO      PORTFOLIO         PORTFOLIO      BOND PORTFOLIO     CLASS I SHARES        PORTFOLIO    
----------------  ---------------  ----------------  ----------------  ------------------  -----------------
                                                                                                            
  $    188,706     $  4,682,529      $  1,874,189      $     39,487       $        120        $         --  
  ------------     ------------      ------------      ------------       ------------        ------------  

       426,807        1,385,943           990,467             6,893                 61             322,401  
  ------------     ------------      ------------      ------------       ------------        ------------  

      (238,101)       3,296,586           883,722            32,594                 59            (322,401) 
  ------------     ------------      ------------      ------------       ------------        ------------  

            --        1,628,121                --                --                 --                  --  
      (351,628)       1,443,331          (375,699)           15,471                  1             (45,042) 
  ------------     ------------      ------------      ------------       ------------        ------------  

      (351,628)       3,071,452          (375,699)           15,471                  1             (45,042) 
  ------------     ------------      ------------      ------------       ------------        ------------  

     9,007,869       (4,862,527)       10,901,164            13,997                (37)          7,664,666  
  ------------     ------------      ------------      ------------       ------------        ------------  

  $  8,418,140     $  1,505,511      $ 11,409,187      $     62,062       $         23        $  7,297,223  
  ============     ============      ============      ============       ============        ============  

See Notes to Financial Statements 

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FOR THE YEAR ENDED DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                                        SMITH BARNEY                                                     
                                                        INTERNATIONAL    SMITH BARNEY    SMITH BARNEY LARGE   STRATEGIC  
                                                           ALL CAP         LARGE CAP       CAPITALIZATION      EQUITY    
                                                      GROWTH PORTFOLIO  VALUE PORTFOLIO   GROWTH PORTFOLIO    PORTFOLIO  
                                                      ----------------  ---------------   ----------------   ----------- 
                                                                                                                         
INVESTMENT INCOME:                                                                                                       

   Dividends ........................................   $    172,680      $   362,443        $    2,924      $        -- 
                                                        ------------      -----------        ----------      ----------- 

EXPENSES:                                                                                                                

   Insurance charges ................................        196,505          256,057            81,197          871,747 
                                                        ------------      -----------        ----------      ----------- 

      Net investment income (loss) ..................        (23,825)         106,386           (78,273)        (871,747)
                                                        ------------      -----------        ----------      ----------- 

REALIZED GAIN (LOSS) AND UNREALIZED                                                                                      
   GAIN (LOSS) ON INVESTMENTS:                                                                                           

      Realized gain distribution ....................             --               --                --               -- 
      Realized gain (loss) on sale of investments ...       (249,560)        (932,243)          (19,482)      (4,851,043)
                                                        ------------      -----------        ----------      ----------- 

         Realized gain (loss) .......................       (249,560)        (932,243)          (19,482)      (4,851,043)
                                                        ------------      -----------        ----------      ----------- 

      Change in unrealized gain (loss)                                                                                   
         on investments .............................      4,215,163        5,721,178         2,296,806       24,642,861 
                                                        ------------      -----------        ----------      ----------- 

   Net increase (decrease) in net assets                                                                                 
      resulting from operations .....................   $  3,941,778      $ 4,895,321        $2,199,051      $18,920,071 
                                                        ============      ===========        ==========      =========== 

See Notes to Financial Statements 

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FOR THE YEAR ENDED DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

   COMSTOCK      EQUITY - INCOME                       HIGH INCOME    ASSET MANAGER    CONTRAFUND(R) 
  PORTFOLIO -      PORTFOLIO -    GROWTH PORTFOLIO -   PORTFOLIO -     PORTFOLIO -      PORTFOLIO -  
CLASS II SHARES   INITIAL CLASS      INITIAL CLASS    INITIAL CLASS   INITIAL CLASS   SERVICE CLASS 2
---------------  ---------------  ------------------  -------------   -------------   ---------------
                                                                                                     
  $         --    $  5,575,815        $  1,359,036     $  2,965,161    $  8,691,498    $         --  
  ------------    ------------        ------------     ------------    ------------    ------------  

         7,082       3,828,133           6,252,512          529,650       2,968,111           9,814  
  ------------    ------------        ------------     ------------    ------------    ------------  

        (7,082)      1,747,682          (4,893,476)       2,435,511       5,723,387          (9,814) 
  ------------    ------------        ------------     ------------    ------------    ------------  

            --              --                  --               --              --              --  
         6,719      (1,282,762)        (13,706,643)      (5,812,162)     (3,980,077)         12,617  
  ------------    ------------        ------------     ------------    ------------    ------------  

         6,719      (1,282,762)        (13,706,643)      (5,812,162)     (3,980,077)         12,617  
  ------------    ------------        ------------     ------------    ------------    ------------  

       193,475      79,497,468         156,305,204       13,010,869      34,681,822         237,739  
  ------------    ------------        ------------     ------------    ------------    ------------  

  $    193,112    $ 79,962,388        $137,705,085     $  9,634,218    $ 36,425,132    $    240,542  
  ============    ============        ============     ============    ============    ============  

See Notes to Financial Statements 

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FOR THE YEAR ENDED DECEMBER 31, 2003

                                                        [Enlarge/Download Table]

                                                         MID CAP                     
                                                       PORTFOLIO -                   
                                                     SERVICE CLASS 2      COMBINED   
                                                     ---------------  -------------- 
                                                                                     
INVESTMENT INCOME:                                                                   

   Dividends .......................................   $    24,377    $   66,347,161 
                                                       -----------    -------------- 

EXPENSES:                                                                            

   Insurance charges ...............................       139,743        51,412,630 
                                                       -----------    -------------- 

      Net investment income (loss) .................      (115,366)       14,934,531 
                                                       -----------    -------------- 

REALIZED GAIN (LOSS) AND UNREALIZED                                                  
   GAIN (LOSS) ON INVESTMENTS:                                                       

      Realized gain distribution ...................            --         1,646,165 
      Realized gain (loss) on sale of investments ..       (12,182)     (102,858,860)
                                                       -----------    -------------- 

         Realized gain (loss) ......................       (12,182)     (101,212,695)
                                                       -----------    -------------- 

      Change in unrealized gain (loss)                                               
         on investments ............................     4,041,373     1,013,573,698 
                                                       -----------    -------------- 

   Net increase (decrease) in net assets                                             
      resulting from operations ....................   $ 3,913,825    $  927,295,534 
                                                       ===========    ============== 

See Notes to Financial Statements 

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STATEMENT OF CHANGES IN NET ASSETS
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                                                         DREYFUS STOCK INDEX FUND -                                
                                            CAPITAL APPRECIATION FUND           INITIAL SHARES            HIGH YIELD BOND TRUST    
                                           ---------------------------   ---------------------------   --------------------------- 
                                               2003           2002           2003           2002           2003           2002     
                                           ------------   ------------   ------------   ------------   ------------   ------------ 
                                                                                                                                   
OPERATIONS:                                                                                                                        
  Net investment income (loss) ........... $ (5,617,111)  $  1,626,937   $    899,385   $    353,046   $  2,712,585   $  4,276,466 
  Realized gain (loss) ...................  (13,188,908)   (15,006,337)    (1,759,837)    (2,052,989)       134,908       (324,083)
  Change in unrealized gain (loss)                                                                                                 
    on investments .......................  119,132,374   (163,612,004)    89,220,745   (107,472,534)     6,619,277     (3,068,348)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in net assets                                                                                          
      resulting from operations ..........  100,326,355   (176,991,404)    88,360,293   (109,172,477)     9,466,770        884,035 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

UNIT TRANSACTIONS:                                                                                                                 
  Participant purchase payments ..........   43,766,608     67,620,425     37,993,225     49,767,209      3,465,937      3,124,103 
  Participant transfers from other                                                                                                 
     funding options .....................   17,101,282     23,216,238     31,832,615     35,904,219     21,992,626     13,775,202 
  Administrative and asset allocation                                                                                              
     charges .............................     (829,331)      (978,317)      (667,651)      (728,118)       (45,078)       (39,337)
  Contract surrenders ....................  (54,974,537)   (65,550,530)   (40,801,786)   (42,012,708)    (4,862,642)    (3,875,863)
  Participant transfers to other                                                                                                   
     funding options .....................  (53,108,161)   (98,129,878)   (36,601,518)   (67,155,189)   (14,565,072)   (11,532,922)
  Other payments to participants .........   (1,161,522)    (1,536,387)      (979,103)    (1,058,803)       (18,538)      (105,288)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in net assets                                                                                          
      resulting from unit transactions ...  (49,205,661)   (75,358,449)    (9,224,218)   (25,283,390)     5,967,233      1,345,895 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in                                                                                                     
      net assets .........................   51,120,694   (252,349,853)    79,136,075   (134,455,867)    15,434,003      2,229,930 

NET ASSETS:                                                                                                                        
    Beginning of year ....................  459,110,842    711,460,695    337,727,178    472,183,045     31,791,641     29,561,711 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 
    End of year .......................... $510,231,536   $459,110,842   $416,863,253   $337,727,178   $ 47,225,644   $ 31,791,641 
                                           ============   ============   ============   ============   ============   ============ 

See Notes to Financial Statements 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                                                              ALLIANCEBERNSTEIN                                    
                                                                          PREMIER GROWTH PORTFOLIO -      CITISTREET DIVERSIFIED   
                                              MANAGED ASSETS TRUST                 CLASS B                  BOND FUND - CLASS I    
                                           ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002    
                                           ------------   ------------   ------------   ------------   ------------   ------------ 
                                                                                                                                   
OPERATIONS:                                                                                                                        
  Net investment income (loss) ........... $  2,673,493   $ 10,495,945   $    (19,311)  $    (17,590)  $  9,340,843   $ 10,358,207 
  Realized gain (loss) ...................   (1,976,258)    (1,982,294)      (160,114)       (73,172)     5,164,306      2,789,718 
  Change in unrealized gain (loss)                                                                                                 
    on investments .......................   36,878,964    (31,831,436)       472,517       (458,323)      (272,593)    13,378,150 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in net assets                                                                                          
      resulting from operations ..........   37,576,199    (23,317,785)       293,092       (549,085)    14,232,556     26,526,075 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

UNIT TRANSACTIONS:                                                                                                                 
  Participant purchase payments ..........   10,908,432     12,605,487        423,841        449,276     44,871,812     47,982,190 
  Participant transfers from other                                                                                                 
    funding options ......................    7,137,780      6,012,073        850,045      1,336,969     32,324,111     31,098,814 
  Administrative and asset allocation                                                                                              
    charges ..............................     (235,269)      (258,373)        (2,786)        (1,918)    (3,771,518)    (4,264,476)
  Contract surrenders ....................  (20,800,662)   (22,839,244)      (370,590)      (111,261)   (52,251,436)   (55,646,494)
  Participant transfers to other                                                                                                   
    funding options ......................   (8,224,347)   (20,222,089)      (645,571)      (356,574)   (58,431,322)   (54,266,059)
  Other payments to participants .........     (533,611)    (1,167,993)        (1,387)            --       (841,569)      (874,039)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in net assets                                                                                          
      resulting from unit transactions ...  (11,747,677)   (25,870,139)       253,552      1,316,492    (38,099,922)   (35,970,064)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in                                                                                                     
      net assets .........................   25,828,522    (49,187,924)       546,644        767,407    (23,867,366)    (9,443,989)

NET ASSETS:                                                                                                                        
    Beginning of year ....................  193,210,384    242,398,308      1,493,764        726,357    356,923,939    366,367,928 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 
    End of year .......................... $219,038,906   $193,210,384   $  2,040,408   $  1,493,764   $333,056,573   $356,923,939 
                                           ============   ============   ============   ============   ============   ============ 

See Notes to Financial Statements 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                           CITISTREET                       CITISTREET                      DELAWARE            
   CITISTREET INTERNATIONAL        LARGE COMPANY STOCK FUND -       SMALL COMPANY STOCK FUND -          VIP REIT SERIES -       
     STOCK FUND - CLASS I                    CLASS I                          CLASS I                    STANDARD CLASS         
-------------    -------------   -------------    -------------   -------------    -------------   -----------    --------------
    2003             2002            2003             2002            2003             2002          2003              2002     
-------------    -------------   -------------    -------------   -------------    -------------   -----------    --------------
                                                                                                                                
$    (923,928)   $  (1,452,065)  $  (1,611,528)   $  (1,753,737)  $  (1,965,944)   $  (1,297,943)  $   (19,446)   $           --
  (25,446,031)      (5,802,134)    (11,890,897)     (12,514,369)     (4,147,917)      (4,882,696)        8,408                --

   76,999,753      (53,436,848)     84,764,879      (66,372,549)     69,806,980      (43,303,075)      535,793                --
-------------    -------------   -------------    -------------   -------------    -------------   -----------    --------------

   50,629,794      (60,691,047)     71,262,454      (80,640,655)     63,693,119      (49,483,714)      524,755                --
-------------    -------------   -------------    -------------   -------------    -------------   -----------    --------------

   24,993,925       33,234,367      38,040,222       43,061,136      18,065,342       20,276,697       428,307                --

   51,401,236       45,148,668      34,878,907       28,834,628      33,438,373       12,622,173     5,577,831                --
   (2,326,409)      (2,721,343)     (3,562,901)      (3,546,624)     (1,600,947)      (1,525,179)       (2,083)               --
  (30,217,245)     (32,254,273)    (44,809,587)     (40,550,948)    (25,194,519)     (23,038,255)     (124,316)               --

  (75,900,807)     (43,421,302)    (17,822,080)     (22,045,151)    (16,775,566)     (20,500,637)     (825,615)               --
     (314,052)        (425,236)       (430,011)        (602,693)       (239,053)        (504,141)       (1,294)               --
-------------    -------------   -------------    -------------   -------------    -------------   -----------    --------------

  (32,363,352)        (439,119)      6,294,550        5,150,348       7,693,630      (12,669,342)    5,052,830                --
-------------    -------------   -------------    -------------   -------------    -------------   -----------    --------------

   18,266,442      (61,130,166)     77,557,004      (75,490,307)     71,386,749      (62,153,056)    5,577,585                --

  200,752,643      261,882,809     260,336,100      335,826,407     143,774,904      205,927,960            --                --
-------------    -------------   -------------    -------------   -------------    -------------   -----------    --------------
$ 219,019,085    $ 200,752,643   $ 337,893,104    $ 260,336,100   $ 215,161,653    $ 143,774,904   $ 5,577,585    $           --
=============    =============   =============    =============   =============    =============   ===========    ==============

See Notes to Financial Statements 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                                    DREYFUS VIF                                                                   
                                                DEVELOPING LEADERS                                            MUTUAL SHARES       
                                                    PORTFOLIO -           FRANKLIN SMALL CAP FUND -        SECURITIES FUND -      
                                                  INITIAL SHARES               CLASS 2 SHARES                CLASS 2 SHARES       
                                           ---------------------------   ---------------------------   ---------------------------
                                               2003           2002           2003           2002           2003           2002    
                                           ------------   ------------   ------------   ------------   ------------   ------------
                                                                                                                                  
OPERATIONS:                                                                                                                       
  Net investment income (loss) ........... $   (570,663)  $   (533,076)  $    (18,955)  $     (7,458)  $     (5,142)  $         --
  Realized gain (loss) ...................   (2,329,703)    (3,628,252)        40,341       (167,321)         2,557             --
  Change in unrealized gain (loss)                                                                                                
    on investments .......................   15,670,224     (6,342,172)       451,460       (108,145)       146,081             --
                                           ------------   ------------   ------------   ------------   ------------   ------------

    Net increase (decrease) in net assets                                                                                         
      resulting from operations ..........   12,769,858    (10,503,500)       472,846       (282,924)       143,496             --
                                           ------------   ------------   ------------   ------------   ------------   ------------

UNIT TRANSACTIONS:                                                                                                                
  Participant purchase payments ..........    8,851,695     10,344,569        424,486        253,084         98,193             --
  Participant transfers from other                                                                                                
    funding options ......................   10,140,415     19,808,096      2,231,371      2,343,800      1,697,855             --
  Administrative and asset allocation                                                                                             
    charges ..............................      (86,524)       (88,600)        (2,243)        (1,237)          (598)            --
  Contract surrenders ....................   (4,740,114)    (4,718,932)      (156,726)      (146,922)       (52,418)            --
  Participant transfers to other                                                                                                  
    funding options ......................  (10,560,804)   (15,587,332)    (1,168,873)    (1,715,932)      (101,955)            --
  Other payments to participants .........      (69,493)      (129,974)            --             --             --             --
                                           ------------   ------------   ------------   ------------   ------------   ------------

    Net increase (decrease) in net assets                                                                                         
      resulting from unit transactions ...    3,535,175      9,627,827      1,328,015        732,793      1,641,077             --
                                           ------------   ------------   ------------   ------------   ------------   ------------

    Net increase (decrease) in                                                                                                    
      net assets .........................   16,305,033       (875,673)     1,800,861        449,869      1,784,573             --

NET ASSETS:                                                                                                                       
    Beginning of year ....................   41,064,214     41,939,887        914,330        464,461             --             --
                                           ------------   ------------   ------------   ------------   ------------   ------------
    End of year .......................... $ 57,369,247   $ 41,064,214   $  2,715,191   $    914,330   $  1,784,573   $         --
                                           ============   ============   ============   ============   ============   ============

See Notes to Financial Statements 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

    TEMPLETON GLOBAL ASSET          TEMPLETON GLOBAL INCOME                                                                      
       ALLOCATION FUND -               SECURITIES FUND -            TEMPLETON GROWTH SECURITIES                                  
        CLASS 1 SHARES                  CLASS 1 SHARES                 FUND - CLASS 1 SHARES           APPRECIATION PORTFOLIO    
------------------------------   ------------------------------   ------------------------------   ----------------------------- 
    2003             2002            2003             2002            2003             2002          2003              2002      
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 
                                                                                                                                 
$   2,097,845    $   1,043,103   $          --    $      49,603   $   1,138,040    $   3,550,225   $    (3,913)   $        5,157 
   (2,371,806)      (4,563,523)             --          466,306     (12,331,040)      (6,098,556)       14,493            (1,565)

   37,747,541       (4,460,414)             --          276,058      84,183,393      (62,315,041)      387,117           (21,467)
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 

   37,473,580       (7,980,834)             --          791,967      72,990,393      (64,863,372)      397,697           (17,875)
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 

    5,929,733        6,955,769              --          393,794      15,233,492       18,611,097       907,478            98,762 

    9,396,132        6,157,067              --        1,881,365      10,178,887       13,731,301     1,544,777           773,251 
     (136,760)        (150,768)             --           (4,837)       (291,829)        (332,418)       (4,028)             (494)
  (17,379,404)     (16,652,411)             --         (506,183)    (33,563,757)     (36,992,803)     (166,293)          (41,936)

   (9,722,274)     (14,897,496)             --      (11,168,381)    (17,696,091)     (28,852,433)     (416,215)          (69,541)
     (608,694)        (486,500)             --          (42,646)       (670,873)        (810,329)           --                -- 
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 

  (12,521,267)     (19,074,339)             --       (9,446,888)    (26,810,171)     (34,645,585)    1,865,719           760,042 
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 

   24,952,313      (27,055,173)             --       (8,654,921)     46,180,222      (99,508,957)    2,263,416           742,167 

  130,685,075      157,740,248              --        8,654,921     254,721,037      354,229,994       742,167                -- 
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 
$ 155,637,388    $ 130,685,075   $          --    $          --   $ 300,901,259    $ 254,721,037   $ 3,005,583    $      742,167 
=============    =============   =============    =============   =============    =============   ===========    ============== 

See Notes to Financial Statements 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                                                                INTERNATIONAL                                     
                                                                              GROWTH PORTFOLIO -            LAZARD RETIREMENT     
                                           FUNDAMENTAL VALUE PORTFOLIO          SERVICE SHARES             SMALL CAP PORTFOLIO    
                                           ---------------------------   ---------------------------   ---------------------------
                                                2003           2002           2003           2002           2003           2002   
                                           ------------   ------------   ------------   ------------   ------------   ------------
                                                                                                                                  
OPERATIONS:                                                                                                                       
  Net investment income (loss) ........... $   (105,956)  $      2,763   $     (2,518)  $     (6,474)  $     (7,526)  $         --
  Realized gain (loss) ...................     (152,362)        84,968        431,452       (196,043)        10,625             --
  Change in unrealized gain (loss)                                                                                                
    on investments .......................    7,185,410     (3,809,448)       221,622        (32,360)       207,505             --
                                           ------------   ------------   ------------   ------------   ------------   ------------

    Net increase (decrease) in net assets                                                                                         
      resulting from operations ..........    6,927,092     (3,721,717)       650,556       (234,877)       210,604             --
                                           ------------   ------------   ------------   ------------   ------------   ------------

Unit Transactions:                                                                                                                
  Participant purchase payments ..........    6,186,340      6,228,945        573,778        571,856        138,240             --
  Participant transfers from other                                                                                                
    funding options ......................    6,086,839      8,850,349     10,489,787     13,042,812      2,639,029             --
  Administrative and asset allocation                                                                                             
    charges ..............................      (40,939)       (32,004)        (3,791)        (2,961)          (726)            --
  Contract surrenders ....................   (1,607,531)    (1,328,326)      (164,023)    (1,007,580)       (45,724)            --
  Participant transfers to other                                                                                                  
    funding options ......................   (2,891,144)    (4,107,810)    (9,874,539)   (11,791,145)      (406,018)            --
  Other payments to participants .........       (3,174)            --             --             --             --             --
                                           ------------   ------------   ------------   ------------   ------------   ------------

    Net increase (decrease) in net assets                                                                                         
      resulting from unit transactions ...    7,730,391      9,611,154      1,021,212        812,982      2,324,801             --
                                           ------------   ------------   ------------   ------------   ------------   ------------

    Net increase (decrease) in                                                                                                    
      net assets .........................   14,657,483      5,889,437      1,671,768        578,105      2,535,405             --

NET ASSETS:                                                                                                                       
    Beginning of year ....................   15,533,580      9,644,143      1,218,245        640,140             --             --
                                           ------------   ------------   ------------   ------------   ------------   ------------
    End of year .......................... $ 30,191,063   $ 15,533,580   $  2,890,013   $  1,218,245   $  2,535,405   $         --
                                           ============   ============   ============   ============   ============   ============

See Notes to Financial Statements 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                           PUTNAM VT                        PUTNAM VT                                           
   TOTAL RETURN PORTFOLIO -       INTERNATIONAL EQUITY FUND -        SMALL CAP VALUE FUND -                                     
     ADMINISTRATIVE CLASS               CLASS IB SHARES                  CLASS IB SHARES              ALL CAP FUND - CLASS I    
------------------------------  ------------------------------   ------------------------------   ----------------------------- 
    2003             2002           2003             2002            2003             2002          2003              2002      
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 
                                                                                                                                
$      11,701    $          --  $     (11,991)   $      (9,482)  $    (234,649)   $    (227,254)  $  (143,892)   $      (98,405)
        6,534               --        423,027         (201,290)       (277,554)        (749,907)     (232,240)         (479,751)

      (11,970)              --        325,208          (16,734)     10,853,335       (5,040,288)    5,406,513        (3,417,138)
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

        6,265               --        736,244         (227,506)     10,341,132       (6,017,449)    5,030,381        (3,995,294)
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

      292,102               --        511,688          475,741       4,804,588        4,869,337     4,195,440         4,236,149 

    3,129,988               --     18,129,810       24,248,077      12,282,305       26,881,976     5,359,162         6,488,453 
       (1,282)              --         (3,385)          (2,267)        (35,153)         (29,599)      (27,248)          (21,800)
     (101,779)              --       (305,873)      (1,013,432)     (2,135,981)      (2,173,532)   (1,554,713)         (772,780)

     (898,489)              --    (17,825,459)     (22,279,090)    (10,274,103)     (16,057,739)   (2,199,849)       (5,107,293)
           --               --           (979)              --         (18,497)         (13,105)       (3,699)          (14,021)
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

    2,420,540               --        505,802        1,429,029       4,623,159       13,477,338     5,769,093         4,808,708 
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

    2,426,805               --      1,242,046        1,201,523      14,964,291        7,459,889    10,799,474           813,414 

           --               --      1,939,781          738,258      20,527,139       13,067,250    11,636,773        10,823,359 
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 
$   2,426,805    $          --  $   3,181,827    $   1,939,781   $  35,491,430    $  20,527,139   $22,436,247    $   11,636,773 
=============    =============  =============    =============   =============    =============   ===========    ============== 

See Notes to Financial Statements 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                                                           SMALL CAP GROWTH FUND -         DISCIPLINED MID CAP     
                                             INVESTORS FUND - CLASS I              CLASS I                   STOCK PORTFOLIO       
                                           ---------------------------   ---------------------------   --------------------------- 
                                               2003           2002           2003           2002           2003           2002     
                                           ------------   ------------   ------------   ------------   ------------   ------------ 
                                                                                                                                   
OPERATIONS:                                                                                                                        
  Net investment income (loss) ........... $     15,777   $      4,565   $    (22,352)  $    (11,430)  $   (322,313)  $   (231,323)
  Realized gain (loss) ...................      (60,421)      (153,078)      (141,527)       (91,167)      (594,697)      (989,715)
  Change in unrealized gain (loss)                                                                                                 
    on investments .......................    1,141,309       (704,716)       861,010       (344,555)    10,883,726     (5,081,079)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in net assets                                                                                          
      resulting from operations ..........    1,096,665       (853,229)       697,131       (447,152)     9,966,716     (6,302,117)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

UNIT TRANSACTIONS:                                                                                                                 
  Participant purchase payments ..........      953,023      1,088,694        373,004        261,885      5,546,555      6,700,269 
  Participant transfers from other                                                                                                 
    funding options ......................    1,179,568      1,683,523      4,930,480      1,336,996      7,069,944     13,102,608 
  Administrative and asset allocation                                                                                              
    charges ..............................       (6,854)        (5,420)        (2,872)        (1,309)       (53,824)       (54,057)
  Contract surrenders ....................     (413,587)      (114,016)      (382,942)       (19,656)    (3,933,206)    (3,693,987)
  Participant transfers to other                                                                                                   
    funding options ......................     (684,293)    (1,204,014)    (1,471,170)      (688,086)    (6,659,024)   (10,353,646)
  Other payments to participants .........           --             --             --             --        (69,985)       (81,425)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in net assets                                                                                          
      resulting from unit transactions ...    1,027,857      1,448,767      3,446,500        889,830      1,900,460      5,619,762 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in                                                                                                     
      net assets .........................    2,124,522        595,538      4,143,631        442,678     11,867,176       (682,355)

NET ASSETS:                                                                                                                        
    Beginning of year ....................    3,069,283      2,473,745        936,118        493,440     31,472,483     32,154,838 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 
    End of year .......................... $  5,193,805   $  3,069,283   $  5,079,749   $    936,118   $ 43,339,659   $ 31,472,483 
                                           ============   ============   ============   ============   ============   ============ 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

          MFS MID CAP                                                    SOCIAL AWARENESS                 U.S. GOVERNMENT        
       GROWTH PORTFOLIO              PIONEER FUND PORTFOLIO              STOCK PORTFOLIO                SECURITIES PORTFOLIO     
------------------------------   ------------------------------   ------------------------------   ----------------------------- 
     2003             2002            2003             2002            2003             2002          2003              2002     
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 
                                                                                                                                 
$     (45,625)   $     (25,994)  $      31,783    $   1,126,643   $    (238,101)   $    (148,564)  $ 3,296,586    $    5,982,892 
     (175,362)      (1,013,506)     (1,700,409)      (3,606,122)       (351,628)        (713,745)    3,071,452         1,334,126 

    1,225,110         (464,196)      4,961,325       (6,381,396)      9,007,869      (10,971,746)   (4,862,527)        2,033,401 
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 

    1,004,123       (1,503,696)      3,292,699       (8,860,875)      8,418,140      (11,834,055)    1,505,511         9,350,419 
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 

      978,904          716,370       1,670,182        2,708,060       3,760,042        5,289,752    12,194,259         7,255,352 

    5,489,741        4,976,995       1,068,111        2,722,902         891,640          983,577    20,028,943        83,578,230 
       (5,721)          (3,433)        (26,137)         (32,150)        (70,833)         (78,623)     (128,074)          (95,420)
     (312,926)        (194,118)     (1,998,365)      (2,758,131)     (3,683,517)      (3,541,045)  (15,531,134)      (11,388,220)

   (3,029,184)      (4,086,220)     (2,264,632)      (8,164,139)     (2,280,308)      (5,007,523)  (42,077,403)      (29,464,432)
           --               --        (111,820)        (123,372)        (81,550)        (145,119)     (289,331)         (240,840)
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 

    3,120,814        1,409,594      (1,662,661)      (5,646,830)     (1,464,526)      (2,498,981)  (25,802,740)       49,644,670 
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 

    4,124,937          (94,102)      1,630,038      (14,507,705)      6,953,614      (14,333,036)  (24,297,229)       58,995,089 

    2,131,043        2,225,145      16,051,989       30,559,694      31,565,841       45,898,877   115,815,235        56,820,146 
-------------    -------------   -------------    -------------   -------------    -------------   -----------    -------------- 
$   6,255,980    $   2,131,043   $  17,682,027    $  16,051,989   $  38,519,455    $  31,565,841   $91,518,006    $  115,815,235 
=============    =============   =============    =============   =============    =============   ===========    ============== 

See Notes to Financial Statements 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                                                                   PIONEER              SALOMON BROTHERS STRATEGIC 
                                            MFS TOTAL RETURN PORTFOLIO   STRATEGIC INCOME PORTFOLIO    TOTAL RETURN BOND PORTFOLIO 
                                           ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002    
                                           ------------   ------------   ------------   ------------   ------------   ------------ 
                                                                                                                                   
OPERATIONS:                                                                                                                        
  Net investment income (loss) ........... $    883,722   $  3,653,776   $         --   $    (46,910)  $     32,594   $     36,481 
  Realized gain (loss) ...................     (375,699)     2,567,159             --       (857,207)        15,471          8,278 
  Change in unrealized gain (loss)                                                                                                 
    on investments .......................   10,901,164    (11,298,951)            --        977,491         13,997        (14,874)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in net assets                                                                                          
      resulting from operations ..........   11,409,187     (5,078,016)            --         73,374         62,062         29,885 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

UNIT TRANSACTIONS:                                                                                                                 
  Participant purchase payments ..........   11,333,782     11,452,291             --        368,687         45,180         32,835 
  Participant transfers from other                                                                                                 
    funding options ......................   14,478,040     25,650,101             --        284,474        522,487        382,515 
  Administrative and asset allocation                                                                                              
    charges ..............................     (124,546)      (113,276)            --         (5,427)          (771)          (683)
  Contract surrenders ....................   (9,532,435)    (8,193,337)            --       (508,265)       (29,116)      (140,434)
  Participant transfers to other                                                                                                   
    funding options ......................  (12,143,662)   (16,092,137)            --     (7,310,913)      (378,893)      (311,032)
  Other payments to participants .........     (315,315)      (167,517)            --         (7,307)            --             -- 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in net assets                                                                                          
      resulting from unit transactions ...    3,695,864     12,536,125             --     (7,178,751)       158,887        (36,799)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in                                                                                                     
      net assets .........................   15,105,051      7,458,109             --     (7,105,377)       220,949         (6,914)

NET ASSETS:                                                                                                                        
    Beginning of year ....................   73,571,353     66,113,244             --      7,105,377        451,663        458,577 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 
    End of year .......................... $ 88,676,404   $ 73,571,353   $         --   $         --   $    672,612   $    451,663 
                                           ============   ============   ============   ============   ============   ============ 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

   SB ADJUSTABLE RATE INCOME             SMITH BARNEY                     SMITH BARNEY              SMITH BARNEY INTERNATIONAL  
  PORTFOLIO - CLASS I SHARES      AGGRESSIVE GROWTH PORTFOLIO         HIGH INCOME PORTFOLIO          ALL CAP GROWTH PORTFOLIO   
------------------------------  ------------------------------   ------------------------------   ----------------------------- 
    2003             2002           2003             2002            2003             2002          2003              2002      
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 
                                                                                                                                
$          59    $          --  $    (322,401)   $    (183,346)  $          --    $     (21,420)  $   (23,825)   $      (58,330)
            1               --        (45,042)      (1,039,426)             --       (1,124,420)     (249,560)       (3,537,070)

          (37)              --      7,664,666       (4,738,543)             --          948,643     4,215,163        (1,899,671)
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

           23               --      7,297,223       (5,961,315)             --         (197,197)    3,941,778        (5,495,071)
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

        1,000               --      9,482,155        8,862,009              --          194,925     1,881,656         3,038,130 

       47,182               --     12,909,183       12,401,672              --          201,209    27,049,238        53,589,117 
          (15)              --        (61,921)         (44,828)             --           (2,533)      (29,495)          (35,173)
           --               --     (2,082,131)        (957,715)             --         (162,701)   (1,747,403)       (3,878,287)

      (11,458)              --     (4,987,024)      (8,877,621)             --       (3,300,431)  (28,169,278)      (56,743,733)
           --               --         (1,598)         (25,420)             --               --       (14,295)          (19,015)
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

       36,709               --     15,258,664       11,358,097              --       (3,069,531)   (1,029,577)       (4,048,961)
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

       36,732               --     22,555,887        5,396,782              --       (3,266,728)    2,912,201        (9,544,032)

           --               --     16,592,712       11,195,930              --        3,266,728    15,250,932        24,794,964 
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 
$      36,732    $          --  $  39,148,599    $  16,592,712   $          --    $          --   $18,163,133    $   15,250,932 
=============    =============  =============    =============   =============    =============   ===========    ============== 

See Notes to Financial Statements 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                                                                SMITH BARNEY                                       
                                                    SMITH BARNEY            LARGE CAPITALIZATION                                   
                                            LARGE CAP VALUE PORTFOLIO         GROWTH PORTFOLIO          STRATEGIC EQUITY PORTFOLIO 
                                           ---------------------------   ---------------------------   --------------------------- 
                                               2003           2002           2003           2002           2003           2002     
                                           ------------   ------------   ------------   ------------   ------------   ------------ 
                                                                                                                                   
OPERATIONS:                                                                                                                        
  Net investment income (loss) ........... $    106,386   $    612,493   $    (78,273)  $     (9,571)  $   (871,747)  $   (536,443)
  Realized gain (loss) ...................     (932,243)    (1,056,255)       (19,482)       (70,218)    (4,851,043)   (10,214,138)
  Change in unrealized gain (loss)                                                                                                 
    on investments .......................    5,721,178     (7,357,725)     2,296,806       (306,506)    24,642,861    (25,421,093)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in net assets                                                                                          
      resulting from operations ..........    4,895,321     (7,801,487)     2,199,051       (386,295)    18,920,071    (36,171,674)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

UNIT TRANSACTIONS:                                                                                                                 
  Participant purchase payments ..........    2,005,691      2,738,849      1,673,784        598,353      7,881,459     11,652,691 
  Participant transfers from other                                                                                                 
    funding options ......................    2,451,794      2,410,870     14,038,390      1,442,177      4,312,447      5,076,994 
  Administrative and asset allocation                                                                                              
    charges ..............................      (32,411)       (37,099)       (10,665)        (2,886)      (125,772)      (139,868)
  Contract surrenders ....................   (2,567,388)    (3,015,855)      (588,040)       (54,974)    (7,866,026)    (9,267,425)
  Participant transfers to other                                                                                                   
    funding options ......................   (2,597,346)    (5,174,156)    (2,789,098)      (795,591)    (6,898,552)   (16,959,830)
  Other payments to participants .........     (184,920)       (57,014)        (1,264)            --        (98,217)       (56,039)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in net assets                                                                                          
      resulting from unit transactions ...     (924,580)    (3,134,405)    12,323,107      1,187,079     (2,794,661)    (9,693,477)
                                           ------------   ------------   ------------   ------------   ------------   ------------ 

    Net increase (decrease) in                                                                                                     
      net assets .........................    3,970,741    (10,935,892)    14,522,158        800,784     16,125,410    (45,865,151)

NET ASSETS:                                                                                                                        
    Beginning of year ....................   19,795,268     30,731,160      1,705,424        904,640     63,111,483    108,976,634 
                                           ------------   ------------   ------------   ------------   ------------   ------------ 
    End of year .......................... $ 23,766,009   $ 19,795,268   $ 16,227,582   $  1,705,424   $ 79,236,893   $ 63,111,483 
                                           ============   ============   ============   ============   ============   ============ 

See Notes to Financial Statements 

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THE TRAVELERS FUND U
FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

     COMSTOCK PORTFOLIO -              EQUITY - INCOME                 GROWTH PORTFOLIO -            HIGH INCOME PORTFOLIO -    
        CLASS II SHARES           PORTFOLIO - INITIAL CLASS               INITIAL CLASS                   INITIAL CLASS         
------------------------------  ------------------------------   ------------------------------   ----------------------------- 
     2003             2002           2003             2002            2003             2002          2003              2002     
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 
                                                                                                                                
$      (7,082)   $          --  $   1,747,682    $   1,943,589   $  (4,893,476)   $  (5,894,653)  $ 2,435,511    $    3,839,387 
        6,719               --     (1,282,762)       6,723,641     (13,706,643)     (20,676,460)   (5,812,162)       (9,687,382)

      193,475               --     79,497,468      (79,006,369)    156,305,204     (201,163,314)   13,010,869         6,654,381 
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

      193,112               --     79,962,388      (70,339,139)    137,705,085     (227,734,427)    9,634,218           806,386 
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

      107,121               --     21,187,204       26,045,294      34,904,978       50,076,516     2,362,627         3,107,431 

    1,942,704               --     14,102,293       13,712,418      21,778,905       25,679,976    21,478,348        10,943,283 
         (590)              --       (401,643)        (446,922)       (693,546)        (781,953)      (54,325)          (55,542)
      (43,205)              --    (35,558,263)     (42,564,856)    (55,051,598)     (69,049,915)   (6,061,961)       (4,965,091)

     (311,474)              --    (17,238,198)     (33,993,468)    (35,898,561)     (82,160,580)  (19,384,420)      (14,258,640)
           --               --     (1,074,229)      (1,238,511)     (1,094,494)      (1,441,472)     (152,827)         (128,204)
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

    1,694,556               --    (18,982,836)     (38,486,045)    (36,054,316)     (77,677,428)   (1,812,558)       (5,356,763)
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 

    1,887,668               --     60,979,552     (108,825,184)    101,650,769     (305,411,855)    7,821,660        (4,550,377)

           --               --    293,491,810      402,316,994     464,625,348      770,037,203    37,384,124        41,934,501 
-------------    -------------  -------------    -------------   -------------    -------------   -----------    -------------- 
$   1,887,668    $          --  $ 354,471,362    $ 293,491,810   $ 566,276,117    $ 464,625,348   $45,205,784    $   37,384,124 
=============    =============  =============    =============   =============    =============   ===========    ============== 

See Notes to Financial Statements 

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STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

                                                        [Enlarge/Download Table]

                                            ASSET MANAGER PORTFOLIO -     CONTRAFUND(R) PORTFOLIO -       MID CAP PORTFOLIO -     
                                                  INITIAL CLASS                SERVICE CLASS 2              SERVICE CLASS 2       
                                           ---------------------------   ---------------------------  --------------------------- 
                                                2003           2002           2003           2002          2003           2002    
                                           ------------   ------------   ------------   ------------  ------------   ------------ 
                                                                                                                                  
OPERATIONS:                                                                                                                       
  Net investment income (loss) ........... $  5,723,387   $  7,719,031   $     (9,814)  $         --  $   (115,366)  $    (46,145)
  Realized gain (loss) ...................   (3,980,077)    (8,464,155)        12,617             --       (12,182)      (112,393)
  Change in unrealized gain (loss)                                                                                                
    on investments .......................   34,681,822    (29,051,830)       237,739             --     4,041,373       (615,808)
                                           ------------   ------------   ------------   ------------  ------------   ------------ 

    Net increase (decrease) in net assets                                                                                         
      resulting from operations ..........   36,425,132    (29,796,954)       240,542             --     3,913,825       (774,346)
                                           ------------   ------------   ------------   ------------  ------------   ------------ 

UNIT TRANSACTIONS:                                                                                                                
  Participant purchase payments ..........    9,655,572     12,354,819        326,593             --     2,698,629      1,481,461 
  Participant transfers from other                                                                                                
    funding options ......................    5,639,444      4,181,053      3,746,615             --     6,837,012     11,120,682 
  Administrative and asset allocation                                                                                             
    charges ..............................     (255,157)      (289,944)        (1,329)            --       (16,349)        (8,444)
  Contract surrenders ....................  (27,447,195)   (33,700,156)       (37,639)            --      (925,446)      (505,203)
  Participant transfers to other                                                                                                  
    funding options ......................   (9,077,332)   (24,512,858)      (424,277)            --    (3,129,418)    (4,635,612)
  Other payments to participants .........     (959,876)    (1,217,046)            --             --       (17,719)        (8,662)
                                           ------------   ------------   ------------   ------------  ------------   ------------ 

    Net increase (decrease) in net assets                                                                                         
      resulting from unit transactions ...  (22,444,544)   (43,184,132)     3,609,963             --     5,446,709      7,444,222 
                                           ------------   ------------   ------------   ------------  ------------   ------------ 

    Net increase (decrease) in                                                                                                    
      net assets .........................   13,980,588    (72,981,086)     3,850,505             --     9,360,534      6,669,876 

NET ASSETS:                                                                                                                       
    Beginning of year ....................  234,563,391    307,544,477             --             --     8,229,338      1,559,462 
                                           ------------   ------------   ------------   ------------  ------------   ------------ 
    End of year .......................... $248,543,979   $234,563,391   $  3,850,505   $         --  $ 17,589,872   $  8,229,338 
                                           ============   ============   ============   ============  ============   ============ 

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FOR VARIABLE ANNUITIES

STATEMENT OF CHANGES IN NET ASSETS - CONTINUED
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002

COMBINED                                      
------------------------------------                                      
2003                  2002                                      
--------------        --------------                                      

$   14,934,531        $   44,062,696                                      
(101,212,695)         (108,156,543)                                   

1,013,573,698          (915,672,572)                                    
--------------        --------------                                      

927,295,534          (979,766,419)                                  
--------------        --------------                                      

402,128,304           487,184,666                                   

521,833,672           597,616,903                                   
(15,781,329)          (16,965,660)                                  

(512,175,179)         (549,907,800)                                   

(568,840,877)         (803,358,655)                                   
(10,362,989)          (12,728,118)                                  
--------------        --------------                                      

(183,198,398)         (298,158,664)                                   
--------------        --------------                                      

744,097,136        (1,277,925,083)                                  

3,893,918,574         5,171,843,657                                     

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

$4,638,015,710        $3,893,918,574                                      
==============        ==============                                      

See Notes to Financial Statements 

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1.   SIGNIFICANT ACCOUNTING POLICIES                                            

     The  Travelers  Fund U for  Variable  Annuities  ("Fund  U") is a  separate
     account of The Travelers  Insurance  Company ("The  Company"),  an indirect
     wholly owned  subsidiary  of Citigroup  Inc.,  and is available for funding
     certain  variable  annuity  contracts  issued  by  The  Company.  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
     sub-accounts  in accordance  with the selection made by the contract owner.
As of December 31, 2003, the investments comprising Fund U were:      

Capital Appreciation Fund, Massachusetts business trust,          
Affiliate of The Company                                      

    Dreyfus Stock Index Fund - Intial Shares (Formerly Dreyfus Stock Index
Fund), Maryland business trust                                

High Yield Bond Trust, Massachusetts business trust, Affiliate of 
The Company                                                   

Managed Assets Trust, Massachusetts business trust, Affiliate of  
The Company                                                   

     AllianceBernstein Variable Product Series Fund, Inc. (Formerly Alliance
Variable Product Series Fund, Inc.), Maryland business trust  
    AllianceBernstein Premier Growth Portfolio - Class B (Formerly
Premier Growth Portfolio - Class B)                   

CitiStreet Funds, Inc., Massachusetts business trust, Affiliate of
The Company                                                   
CitiStreet Diversified Bond Fund - Class I                
CitiStreet International Stock Fund - Class I             
CitiStreet Large Company Stock Fund - Class I             
CitiStreet Small Company Stock Fund - Class I             

Delaware VIP Trust, Maryland business trust                       
Delaware VIP REIT Series - Standard Class                 

Dreyfus Variable Investment Fund, Maryland business trust         
         Dreyfus VIF Developing Leaders Portfolio - Initial Shares (Formerly
Small Cap Portfolio - Initial Shares)                 

 Franklin Templeton Variable Insurance Products Trust, Massachusetts
business trust                                                
Franklin Small Cap Fund - Class 2 Shares                  
Mutual Shares Securities Fund - Class 2 Shares            
Templeton Global Asset Allocation Fund - Class 1 Shares   
Templeton Growth Securities Fund - Class 1 Shares         

      Greenwich Street Series Fund, Massachusetts business trust, Affiliate of
The Company                                                   
Appreciation Portfolio                                    
Fundamental Value Portfolio                               

Janus Aspen Series, Delaware business trust                       
International Growth Portfolio - Service Shares           

Lazard Retirement Series, Inc., Massachusetts business trust      
Lazard Retirement Small Cap Portfolio                     

PIMCO Variable Insurance Trust, Massachusetts business trust      
Total Return Portfolio - Administrative Class             

Putnam Variable Trust, Massachusetts business trust               
      Putnam VT International  Equity Fund - Class IB Shares (Formerly
   Putnam VT  International  Growth  Fund - Class IB Shares)
Putnam VT Small Cap Value Fund - Class IB Shares          

   Salomon Brothers Variable Series Funds Inc., Maryland business trust,
Affiliate of The Company                                      
All Cap Fund - Class I (Formerly Capital Fund - Class I)  
Investors Fund - Class I                                  
Small Cap Growth Fund - Class I                           

    The Travelers Series Trust, Massachusetts business trust, Affiliate of
The Company                                                   
Disciplined Mid Cap Stock Portfolio                       
MFS Mid Cap Growth Portfolio                              
Pioneer Fund Portfolio (Formerly Utilities Portfolio)     
Social Awareness Stock Portfolio                          
U.S. Government Securities Portfolio                      

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1.   SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)                                

Travelers Series Fund Inc., Maryland business trust, Affiliate of 
The Company                                                   
MFS Total Return Portfolio                                
Salomon Brothers Strategic Total Return Bond Portfolio    
SB Adjustable Rate Income Portfolio - Class I Shares      
Smith Barney Aggressive Growth Portfolio                  
Smith Barney International All Cap Growth Portfolio       
Smith Barney Large Cap Value Portfolio                    
Smith Barney Large Capitalization Growth Portfolio        
     Strategic Equity Portfolio (Formerly Alliance Growth Portfolio)

Van Kampen Life Investment Trust, Delaware business trust         
Comstock Portfolio - Class II Shares                      

       Variable Insurance Products Fund, Massachusetts business trust, Affiliate
of The Company                                                
Equity - Income Portfolio - Initial Class                 
Growth Portfolio - Initial Class                          
High Income Portfolio - Initial Class                     

Variable Insurance Products Fund II, Massachusetts business trust 
Asset Manager Portfolio - Initial Class                   
Contrafund(R) Portfolio - Service Class 2                 

Variable Insurance Products Fund III, Massachusetts business trust
Mid Cap Portfolio - Service Class 2                       

 Not all funds may be available in all states or to all contract owners.

     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.  Income from  dividends and realized gain (loss)  distributions,  are
recorded on the ex-distribution date                                  

     FEDERAL  INCOME  TAXES.  The  operations of Fund U form a part of the total
     operations  of The  Company  and are not taxed  separately.  The Company 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.        

     FINANCIAL  HIGHLIGHTS.  In 2001,  Fund U adopted the  financial  highlights
     disclosure  recommended  by the  American  Institute  of  Certified  Public
     Accountants Audit Guide ("AICPA Guide") for Investment Companies. The AICPA
     Guide allows for the prospective application of this disclosure, which will
     ultimately  display a five year period.  It is comprised of the units, unit
     values,  investment income ratio, expense ratios and total returns for each
     sub-account.  Since each  sub-account  offers  multiple  contract  charges,
     certain  information  is  provided  in  the  form  of a  range.  The  range
     information  may reflect  varying time periods if assets did not exist with
all contract charge options of the sub-account for the entire year.   

     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.                                                            

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2.   INVESTMENTS                                                                

     The aggregate  costs of purchases  and proceeds  from sales of  investments
     were  $425,485,542  and  $591,846,401  respectively,  for  the  year  ended
     December 31, 2003.  Realized gains and losses from investment  transactions
     are reported on an average cost basis.  The cost of investments in eligible
     funds  was   $4,779,358,659   at  December  31,  2003.   Gross   unrealized
     appreciation  for all  investments  at December 31, 2003 was  $295,999,676.
     Gross unrealized  depreciation for all investments at December 31, 2003 was
$155,444,638.                                                         

3.   CONTRACT CHARGES                                                           

     The  Mortality  and  Expense  Risk  asset-based  charges are  deducted,  as
     appropriate,  each business day and are assessed through the calculation of
accumulation and annuity units.                                       

     ---------------------------------------------------------------------------
   SEPARATE ACCOUNT                          U                        Asset-
  -------------------------------------- -------------------------   Based

              Separate Account Charge                                 Charge
                                                                      --------
           (as identified in Note 4)       Product                   M&E
     -------------------------------------- ------------------------- ----------

  Separate Account Charge 1.25              Universal Annuity        1.25%

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

     For certain contracts in the accumulation phase a semi-annual charge of $15
     (prorated for partial  periods) is assessed through the redemption of units
and paid to The Company to cover administrative charges.              

     No sales charges are deducted from participant  Purchase Payments when they
     are  received.  However,  a  5%  withdrawal  charge  assessed  through  the
     redemption  of units  will  apply if a  participant's  purchase  payment is
surrendered within five years of its payment date.                    

     Contract surrender payments include $7,461,157 and $6,056,072 of withdrawal
     charges for the years ended  December  31,2003 and 2002,  respectively  and
assessed through the redemption of units.                             

     If the Variable Liquidity Benefit is selected, there is a surrender charge,
     in the annuity phase, assessed through the redemption of units, of up to 5%
     of the amount  withdrawn  for the first five years  following  the  initial
Purchase  Payment.                                                    

     Participants in CitiStreet Funds Inc. (the Funds),  may elect to enter into
     a separate asset allocation  advisory  agreement with CitiStreet  Financial
     Services  LLC  (CitiStreet),  an  affiliate  of  The  Company.  Under  this
     arrangement,  CitiStreet  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 the participant's assets increase, is equivalent to
     an amount of up to 1.25% of the  participant's  assets in the Funds.  These
     fees totaled  $9,206,952  and  $9,882,520  for the years ended December 31,
2003 and 2002 respectively.                                           

     For a full  explanation of product charges and associated  product features
and benefits please refer to your product prospectus.                 

4.   NET ASSETS HELD ON BEHALF OF AN AFFILIATE                                  

     Approximately  $26,433,000 and $22,086,000 of the net assets of Fund U were
     held on behalf of an  affiliate  of The Company as of December 31, 2003 and
     2002, respectively. Transactions with this affiliate during the years ended
     December  31,  2003 and 2002  comprised  participant  purchase  payments of
     approximately   $4,547,000  and  $4,159,000  and  contract   surrenders  of
approximately $5,606,000 and $4,686,000, respectively.                

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5.   NET CONTRACT OWNERS' EQUITY                                                

                                                        [Enlarge/Download Table]

                                                                                         DECEMBER 31, 2003                      
                                                                 ---------------------------------------------------------------

                                                                 ACCUMULATION    ANNUITY      UNIT     ACCUMULATION     ANNUITY 
                                                                    UNITS         UNITS      VALUE      NET ASSETS    NET ASSETS
                                                                 ------------    -------    -------    ------------   ----------
                                                                                                                                
Capital Appreciation Fund                                                                                                       
      Separate Account Charges 1.25% (Q) .......................  102,332,974     37,834    $ 4.701    $481,085,216    $177,863 
      Separate Account Charges 1.25% (N) .......................    5,856,902     84,804      4.875      28,554,998     413,459 

Dreyfus Stock Index Fund - Intial Shares                                                                                        
      Separate Account Charges 1.25% ...........................  148,712,961    301,205      2.797     416,020,639     842,614 

High Yield Bond Trust                                                                                                           
      Separate Account Charges 1.25% (Q) .......................    8,224,138      2,942      5.030      41,367,631      14,799 
      Separate Account Charges 1.25% (N) .......................    1,143,217      6,493      5.082       5,810,212      33,002 

Managed Assets Trust                                                                                                            
      Separate Account Charges 1.25% (Q) .......................   39,999,915     79,809      4.985     199,381,596     397,808 
      Separate Account Charges 1.25% (N) .......................    3,514,361     75,349      5.365      18,855,239     404,263 

AllianceBernstein Variable Product Series Fund, Inc.                                                                            
   AllianceBernstein Premier Growth Portfolio - Class B                                                                         
      Separate Account Charges 1.25% ...........................    2,865,087         --      0.712       2,040,408          -- 

CitiStreet Funds, Inc.                                                                                                          
   CitiStreet Diversified Bond Fund - Class I                                                                                   
      Separate Account Charges 1.25% ...........................  181,135,648    164,485      1.837     332,754,406     302,167 
   CitiStreet International Stock Fund - Class I                                                                                
      Separate Account Charges 1.25% ...........................  133,361,601     79,891      1.641     218,887,959     131,126 
   CitiStreet Large Company Stock Fund - Class I                                                                                
      Separate Account Charges 1.25% ...........................  208,141,207    112,020      1.622     337,711,351     181,753 
   CitiStreet Small Company Stock Fund - Class I                                                                                
      Separate Account Charges 1.25% ...........................   98,686,689     51,627      2.179     215,049,153     112,500 

Delaware VIP Trust                                                                                                              
   Delaware VIP REIT Series - Standard Class                                                                                    
      Separate Account Charges 1.25% ...........................    4,405,737         --      1.266       5,577,585          -- 

Dreyfus Variable Investment Fund                                                                                                
   Dreyfus VIF Developing Leaders Portfolio - Initial Shares                                                                    
      Separate Account Charges 1.25% ...........................   50,863,368     19,304      1.127      57,347,482      21,765 

Franklin Templeton Variable Insurance Products Trust                                                                            
   Franklin Small Cap Fund - Class 2 Shares                                                                                     
      Separate Account Charges 1.25% ...........................    3,060,921         --      0.887       2,715,191          -- 
   Mutual Shares Securities Fund - Class 2 Shares                                                                               
      Separate Account Charges 1.25% ...........................    1,486,942         --      1.200       1,784,573          -- 
   Templeton Global Asset Allocation Fund - Class 1 Shares                                                                      
      Separate Account Charges 1.25% ...........................   53,915,081     62,323      2.883     155,457,686     179,702 
   Templeton Growth Securities Fund - Class 1 Shares                                                                            
      Separate Account Charges 1.25% ...........................   97,351,751     51,821      3.089     300,741,172     160,087 

Greenwich Street Series Fund                                                                                                    
   Appreciation Portfolio                                                                                                       
      Separate Account Charges 1.25% ...........................    2,886,552         --      1.041       3,005,583          -- 
   Fundamental Value Portfolio                                                                                                  
      Separate Account Charges 1.25% ...........................   30,782,219      7,775      0.981      30,183,439       7,624 

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5.   NET CONTRACT OWNERS' EQUITY (CONTINUED)                                    

                                                        [Enlarge/Download Table]

                                                                                         DECEMBER 31, 2003                      
                                                                 ---------------------------------------------------------------

                                                                 ACCUMULATION    ANNUITY      UNIT     ACCUMULATION     ANNUITY 
                                                                    UNITS         UNITS      VALUE      NET ASSETS    NET ASSETS
                                                                 ------------    -------    -------    ------------   ----------
                                                                                                                                
Greenwich Street Series Fund (continued)                                                                                        
Janus Aspen Series                                                                                                              
   International Growth Portfolio - Service Shares                                                                              
      Separate Account Charges 1.25% ...........................    3,557,813         --    $ 0.812    $  2,890,013    $     -- 

Lazard Retirement Series, Inc. .................................                                                                
   Lazard Retirement Small Cap Portfolio                                                                                        
      Separate Account Charges 1.25% ...........................    1,896,134         --      1.337       2,535,405          -- 

PIMCO Variable Insurance Trust                                                                                                  
   Total Return Portfolio - Administrative Class                                                                                
      Separate Account Charges 1.25% ...........................    2,399,897         --      1.011       2,426,805          -- 

Putnam Variable Trust                                                                                                           
   Putnam VT International Equity Fund - Class IB Shares                                                                        
      Separate Account Charges 1.25% ...........................    3,592,150         --      0.886       3,181,827          -- 
   Putnam VT Small Cap Value Fund - Class IB Shares                                                                             
      Separate Account Charges 1.25% ...........................   27,298,598      8,704      1.300      35,480,117      11,313 

Salomon Brothers Variable Series Funds Inc. ....................                                                                
   All Cap Fund - Class I                                                                                                       
      Separate Account Charges 1.25% ...........................   23,365,758         --      0.960      22,436,247          -- 
   Investors Fund - Class I                                                                                                     
      Separate Account Charges 1.25% ...........................    5,708,051         --      0.910       5,193,805          -- 
   Small Cap Growth Fund - Class I                                                                                              
      Separate Account Charges 1.25% ...........................    5,518,116         --      0.921       5,079,749          -- 

The Travelers Series Trust                                                                                                      
   Disciplined Mid Cap Stock Portfolio                                                                                          
      Separate Account Charges 1.25% ...........................   30,469,136     15,114      1.422      43,318,171      21,488 
   MFS Mid Cap Growth Portfolio                                                                                                 
      Separate Account Charges 1.25% ...........................   11,787,849         --      0.531       6,255,980          -- 
   Pioneer Fund Portfolio                                                                                                       
      Separate Account Charges 1.25% ...........................   11,566,759     10,231      1.527      17,666,401      15,626 
   Social Awareness Stock Portfolio                                                                                             
      Separate Account Charges 1.25% ...........................   15,327,635         --      2.513      38,519,455          -- 
   U.S. Government Securities Portfolio                                                                                         
      Separate Account Charges 1.25% ...........................   44,846,306     22,307      2.040      91,472,507      45,499 

Travelers Series Fund Inc. .....................................                                                                
   MFS Total Return Portfolio                                                                                                   
      Separate Account Charges 1.25% ...........................   39,696,294     29,160      2.232      88,611,311      65,093 
   Salomon Brothers Strategic Total Return Bond Portfolio                                                                       
      Separate Account Charges 1.25% ...........................      364,923         --      1.843         672,612          -- 
   SB Adjustable Rate Income Portfolio - Class I Shares                                                                         
      Separate Account Charges 1.25% ...........................       36,742         --      1.000          36,732          -- 
   Smith Barney Aggressive Growth Portfolio                                                                                     
      Separate Account Charges 1.25% ...........................   46,827,279      8,496      0.836      39,141,497       7,102 
   Smith Barney International All Cap Growth Portfolio                                                                          
      Separate Account Charges 1.25% ...........................   16,476,372      6,122      1.102      18,156,387       6,746 
   Smith Barney Large Cap Value Portfolio                                                                                       
      Separate Account Charges 1.25% ...........................   12,780,079     13,932      1.858      23,740,129      25,880 

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5.   NET CONTRACT OWNERS' EQUITY (CONTINUED)                                    

                                                        [Enlarge/Download Table]

                                                                                         DECEMBER 31, 2003                      
                                                                 ---------------------------------------------------------------

                                                                 ACCUMULATION    ANNUITY      UNIT     ACCUMULATION     ANNUITY 
                                                                    UNITS         UNITS      VALUE      NET ASSETS    NET ASSETS
                                                                 ------------    -------    -------    ------------   ----------
                                                                                                                                
Travelers Series Fund Inc. (continued)                                                                                          
   Smith Barney Large Capitalization Growth Portfolio                                                                           
      Separate Account Charges 1.25% ...........................   16,489,148      7,630    $ 0.984  $   16,220,077  $    7,505 
   Strategic Equity Portfolio                                                                                                   
      Separate Account Charges 1.25% ...........................   38,369,091     10,565      2.065      79,215,082      21,811 

Van Kampen Life Investment Trust                                                                                                
   Comstock Portfolio - Class II Shares                                                                                         
      Separate Account Charges 1.25% ...........................    1,506,552         --      1.253       1,887,668          -- 

Variable Insurance Products Fund                                                                                                
   Equity - Income Portfolio - Initial Class                                                                                    
      Separate Account Charges 1.25% ...........................  136,018,675    226,231      2.602     353,882,772     588,590 
   Growth Portfolio - Initial Class                                                                                             
      Separate Account Charges 1.25% ...........................  212,322,699    139,847      2.665     565,903,384     372,733 
   High Income Portfolio - Initial Class                                                                                        
      Separate Account Charges 1.25% ...........................   25,427,944     47,656      1.774      45,121,220      84,564 

Variable Insurance Products Fund II                                                                                             
   Asset Manager Portfolio - Initial Class                                                                                      
      Separate Account Charges 1.25% ...........................  112,272,592    131,096      2.211     248,254,104     289,875 
   Contrafund(R)Portfolio - Service Class 2                                                                                     
      Separate Account Charges 1.25% ...........................    3,102,094         --      1.241       3,850,505          -- 

Variable Insurance Products Fund III                                                                                            
   Mid Cap Portfolio - Service Class 2                                                                                          
      Separate Account Charges 1.25% ...........................   14,086,757         --      1.249      17,589,872          -- 
                                                                                                     --------------  ---------- 

Net Contract Owners' Equity ....................................                                     $4,633,071,353  $4,944,357 
                                                                                                     ==============  ========== 

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6.   STATEMENT OF INVESTMENTS                                                      FOR THE YEAR ENDED DECEMBER 31, 2003          
                                                                        ---------------------------------------------------------

INVESTMENTS                                                               NO. OF         MARKET          COST OF       PROCEEDS  
                                                                          SHARES         VALUE          PURCHASES     FROM SALES 
                                                                        ----------   --------------   ------------   ------------
                                                                                                                                 
CAPITAL APPRECIATION FUND (11.0%)                                                                                                
    Total (Cost $541,458,079) .........................................  9,209,861   $  510,318,392   $  4,046,708   $ 58,845,252
                                                                        ----------   --------------   ------------   ------------

DREYFUS STOCK INDEX FUND - INTIAL SHARES (9.0%)                                                                                  
    Total (Cost $382,442,141) ......................................... 14,670,441      416,933,931     18,453,918     26,754,178
                                                                        ----------   --------------   ------------   ------------

HIGH YIELD BOND TRUST (1.0%)                                                                                                     
    Total (Cost $44,345,873) ..........................................  4,839,518       47,233,700     17,131,943      8,448,425
                                                                        ----------   --------------   ------------   ------------

MANAGED ASSETS TRUST (4.7%)                                                                                                      
    Total (Cost $216,235,016) ......................................... 13,936,145      219,076,196     10,159,626     19,222,993
                                                                        ----------   --------------   ------------   ------------

ALLIANCEBERNSTEIN VARIABLE PRODUCT SERIES FUND, INC. (0.0%)                                                                      
  AllianceBernstein Premier Growth Portfolio - Class B                                                                           
    Total (Cost $2,025,554) ...........................................     95,675        2,040,753      1,023,877        789,495
                                                                        ----------   --------------   ------------   ------------

CITISTREET FUNDS, INC. (23.9%)                                                                                                   
  CitiStreet Diversified Bond Fund - Class I (Cost $306,453,210) ...... 28,495,608      333,113,658     29,010,455     57,761,311
  CitiStreet International Stock Fund - Class I (Cost $236,186,632) ... 18,315,714      219,055,938     39,381,655     72,659,166
  CitiStreet Large Company Stock Fund - Class I (Cost $435,910,794) ... 31,643,290      337,950,332     28,452,189     23,747,436
  CitiStreet Small Company Stock Fund - Class I (Cost $215,469,190) ... 17,697,242      215,198,464     25,064,331     19,319,459
                                                                        ----------   --------------   ------------   ------------
    Total (Cost $1,194,019,826) ....................................... 96,151,854    1,105,318,392    121,908,630    173,487,372
                                                                        ----------   --------------   ------------   ------------

DELAWARE VIP TRUST (0.1%)                                                                                                        
  Delaware VIP REIT Series - Standard Class                                                                                      
    Total (Cost $5,042,725) ...........................................    368,462        5,578,518      5,443,781        409,464
                                                                        ----------   --------------   ------------   ------------

DREYFUS VARIABLE INVESTMENT FUND (1.2%)                                                                                          
  Dreyfus VIF Developing Leaders Portfolio - Initial Shares                                                                      
    Total (Cost $63,573,814) ..........................................  1,534,609       57,379,030      9,446,842      6,478,148
                                                                        ----------   --------------   ------------   ------------

FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST (10.0%)                                                                     
  Franklin Small Cap Fund - Class 2 Shares (Cost $2,352,077) ..........    155,804        2,715,657      2,158,563        849,162
  Mutual Shares Securities Fund - Class 2 Shares (Cost $1,638,787) ....    119,870        1,784,868      1,759,324        123,095
  Templeton Global Asset Allocation Fund - Class 1 Shares                                                                        
   (Cost $149,578,089) ................................................  8,288,801      155,663,675      6,108,259     16,523,162
  Templeton Growth Securities Fund - Class 1 Shares                                                                              
    (Cost $341,750,583) ............................................... 26,609,376      300,952,048      6,343,579     31,999,581
                                                                        ----------   --------------   ------------   ------------
    Total (Cost $495,319,536) ......................................... 35,173,851      461,116,248     16,369,725     49,495,000
                                                                        ----------   --------------   ------------   ------------

GREENWICH STREET SERIES FUND (0.7%)                                                                                              
  Appreciation Portfolio (Cost $2,640,438) ............................    138,084        3,006,088      2,134,479        272,269
  Fundamental Value Portfolio (Cost $27,025,890) ......................  1,503,793       30,196,167      8,468,401        840,971
                                                                        ----------   --------------   ------------   ------------
    Total (Cost $29,666,328) ..........................................  1,641,877       33,202,255     10,602,880      1,113,240
                                                                        ----------   --------------   ------------   ------------

JANUS ASPEN SERIES (0.1%)                                                                                                        
  International Growth Portfolio - Service Shares                                                                                
    Total (Cost $2,681,090) ...........................................    126,278        2,890,497      9,997,190      8,978,177
                                                                        ----------   --------------   ------------   ------------

LAZARD RETIREMENT SERIES, INC. (0.1%)                                                                                            
  Lazard Retirement Small Cap Portfolio                                                                                          
    Total (Cost $2,328,332) ...........................................    172,389        2,535,837      2,553,562        235,855
                                                                        ----------   --------------   ------------   ------------

PIMCO VARIABLE INSURANCE TRUST (0.1%)                                                                                            
  Total Return Portfolio - Administrative Class                                                                                  
    Total (Cost $2,439,184) ...........................................    234,287        2,427,213      3,066,384        615,691
                                                                        ----------   --------------   ------------   ------------

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6.   STATEMENT OF INVESTMENTS (CONTINUED)                                      FOR THE YEAR ENDED DECEMBER 31, 2003 (CONTINUED)    
                                                                             ----------------------------------------------------- 

INVESTMENTS                                                                    NO. OF        MARKET         COST OF      PROCEEDS  
                                                                               SHARES        VALUE         PURCHASES    FROM SALES 
                                                                             ----------  --------------  ------------  ------------
                                                                                                                                   
Putnam Variable Trust (0.8%)                                                                                                       
  Putnam VT International Equity Fund - Class IB Shares (Cost $2,858,554) ..    247,655  $    3,182,368  $ 17,296,985  $ 16,802,899
  Putnam VT Small Cap Value Fund - Class IB Shares (Cost $28,969,590) ......  1,959,024      35,497,507     9,184,487     4,792,689
                                                                             ----------  --------------  ------------  ------------
    Total (Cost $31,828,144) ...............................................  2,206,679      38,679,875    26,481,472    21,595,588
                                                                             ----------  --------------  ------------  ------------

SALOMON BROTHERS VARIABLE SERIES FUNDS INC. (0.7%)                                                                                 
  All Cap Fund - Class I (Cost $20,391,430) ................................  1,436,622      22,440,031     6,820,777     1,193,367
  Investors Fund - Class I (Cost $4,757,485) ...............................    409,352       5,194,682     1,644,549       600,451
  Small Cap Growth Fund - Class I (Cost $4,539,081) ........................    415,083       5,080,613     4,575,259     1,150,375
                                                                             ----------  --------------  ------------  ------------
    Total (Cost $29,687,996) ...............................................  2,261,057      32,715,326    13,040,585     2,944,193
                                                                             ----------  --------------  ------------  ------------

THE TRAVELERS SERIES TRUST (4.2%)                                                                                                  
  Disciplined Mid Cap Stock Portfolio (Cost $39,739,000) ...................  2,478,392      43,347,071     6,238,194     4,656,922
  MFS Mid Cap Growth Portfolio (Cost $5,778,001) ...........................    909,453       6,257,040     4,774,641     1,698,671
  Pioneer Fund Portfolio (Cost $24,144,429) ................................  1,619,508      17,685,031     1,201,099     2,831,209
  Social Awareness Stock Portfolio (Cost $37,054,555) ......................  1,672,135      38,525,987     1,675,002     3,375,402
  U.S. Government Securities Portfolio (Cost $92,614,869) ..................  7,270,352      91,533,736    15,530,644    36,408,567
                                                                             ----------  --------------  ------------  ------------
    Total (Cost $199,330,854) .............................................. 13,949,840     197,348,865    29,419,580    48,970,771
                                                                             ----------  --------------  ------------  ------------

TRAVELERS SERIES FUND INC. (5.7%)                                                                                                  
  MFS Total Return Portfolio (Cost $86,325,656) ............................  5,468,034      88,691,507    10,853,946     6,269,391
  Salomon Brothers Strategic Total Return Bond Portfolio (Cost $669,851) ...     62,930         672,727       581,650       390,117
  SB Adjustable Rate Income Portfolio - Class I Shares (Cost $36,775) ......      3,674          36,738        46,339         9,565
  Smith Barney Aggressive Growth Portfolio (Cost $35,991,461) ..............  3,220,001      39,155,214    15,595,748       655,133
  Smith Barney International All Cap Growth Portfolio (Cost $15,555,937) ...  1,636,603      18,166,298    24,866,948    25,919,258
  Smith Barney Large Cap Value Portfolio (Cost $25,783,130) ................  1,431,067      23,770,027     2,384,450     3,201,329
  Smith Barney Large Capitalization Growth Portfolio (Cost $14,223,015) ....  1,129,458      16,230,319    13,227,495       980,159
  Strategic Equity Portfolio (Cost $113,520,959) ...........................  4,913,228      79,250,371     3,106,685     6,768,212
                                                                             ----------  --------------  ------------  ------------
    Total (Cost $292,106,784) .............................................. 17,864,995     265,973,201    70,663,261    44,193,164
                                                                             ----------  --------------  ------------  ------------

VAN KAMPEN LIFE INVESTMENT TRUST (0.0%)                                                                                            
  Comstock Portfolio - Class II Shares                                                                                             

    Total (Cost $1,694,512) ................................................    160,680       1,887,987     1,901,809       214,015
                                                                             ----------  --------------  ------------  ------------

VARIABLE INSURANCE PRODUCTS FUND (20.9%)                                                                                           
  Equity - Income Portfolio - Initial Class (Cost $306,567,653) ............ 15,294,712     354,531,428     9,257,307    26,472,343
  Growth Portfolio - Initial Class (Cost $607,993,009) ..................... 18,246,529     566,372,257     5,738,312    46,653,425
  High Income Portfolio - Initial Class (Cost $51,274,466) .................  6,505,539      45,213,497    19,157,007    18,531,472
                                                                             ----------  --------------  ------------  ------------
    Total (Cost $965,835,128) .............................................. 40,046,780     966,117,182    34,152,626    91,657,240
                                                                             ----------  --------------  ------------  ------------

VARIABLE INSURANCE PRODUCTS FUND II (5.4%)                                                                                         
  Asset Manager Portfolio - Initial Class (Cost $259,573,187) .............. 17,191,310     248,586,346     9,481,598    26,192,473
  Contrafund(R)Portfolio - Service Class 2 (Cost $3,613,297) ...............    167,948       3,851,036     3,865,400       264,720
                                                                             ----------  --------------  ------------  ------------
    Total (Cost $263,186,484) .............................................. 17,359,258     252,437,382    13,346,998    26,457,193
                                                                             ----------  --------------  ------------  ------------

VARIABLE INSURANCE PRODUCTS FUND III (0.4%)                                                                                        
  Mid Cap Portfolio - Service Class 2                                                                                              
    Total (Cost $14,111,259) ...............................................    733,952      17,592,841     6,274,145       940,947
                                                                             ----------  --------------  ------------  ------------

TOTAL INVESTMENTS (100%)                                                                                                           
  (COST $4,779,358,659)                                                                  $4,638,803,621  $425,485,542  $591,846,401
                                                                                         ==============  ============  ============

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7.   FINANCIAL HIGHLIGHTS                                                       

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                                                                                         INVEST-     EXPENSE                     
                                               YEAR             UNIT VALUE       NET     MENT(1)     RATIO(2)    TOTAL RETURN(3) 
                                              ENDED   UNITS      LOWEST TO     ASSETS    INCOME     LOWEST TO       LOWEST TO    
                                              DEC 31  (000S)    HIGHEST ($)    ($000S)  RATIO (%)  HIGHEST (%)     HIGHEST (%)   
                                              ------  ------    -----------    -------  ---------  -----------  -----------------
                                                                                                                                 
CAPITAL APPRECIATION FUND                       2003   108,313  4.701 - 4.875  510,232     0.05        1.25      23.35  -  23.36 
                                                2002   120,205  3.811 - 3.952  459,111     1.54        1.25     (26.02) - (26.01)
                                                2001   137,755  5.151 - 5.342  711,461     0.46        1.25     (27.02) - (27.01)

DREYFUS STOCK INDEX FUND - INTIAL SHARES        2003   149,014          2.797  416,863     1.50        1.25                26.73 
                                                2002   153,048          2.207  337,727     1.34        1.25               (23.31)
                                                2001   164,059          2.878  472,183     1.09        1.25               (13.29)

HIGH YIELD BOND TRUST                           2003     9,377  5.030 - 5.082   47,226     8.09        1.25      27.53  -  27.54 
                                                2002     8,053  3.944 - 3.985   31,792    14.68        1.25       3.29  -   3.30 
                                                2001     7,732  3.818 - 3.858   29,562     6.49        1.25       8.16  -   8.19 

MANAGED ASSETS TRUST                            2003    43,669  4.985-- 5.365  219,039     2.58        1.25      20.47  -  20.48 
                                                2002    46,383  4.138-- 4.453  193,210     6.10        1.25      (9.75) -  (9.73)
                                                2001    52,482  4.584-- 4.934  242,398     2.63        1.25      (6.27) -  (6.26)
ALLIANCEBERNSTEIN VARIABLE PRODUCT                                                                                               
SERIES FUND, INC.                                                                                                                

   AllianceBernstein Premier Growth             2003     2,865          0.712    2,040       --        1.25                21.71 
       Portfolio-- Class B                                                                                                       
                                                2002     2,556          0.585    1,494       --        1.25               (31.66)
                                                2001       849          0.856      726       --        1.25               (14.40)
CITISTREET FUNDS, INC.                                                                                                           

   CitiStreet Diversified Bond Fund-- Class I   2003   181,300          1.837  333,057     4.03        1.25                 4.26 
                                                2002   202,597          1.762  356,924     4.10        1.25                 7.64 
                                                2001   223,789          1.637  366,368     4.10        1.25                 5.54 

   CitiStreet International Stock Fund--                                                                                         
      Class I                                   2003   133,441          1.641  219,019     0.78        1.25                28.40 
                                                2002   157,091          1.278  200,753     0.61        1.25               (23.29)
                                                2001   157,226          1.666  261,883     1.44        1.25               (22.40)

   CitiStreet Large Company Stock Fund--                                                                                         
      Class I                                   2003   208,253          1.622  337,893     0.70        1.25                26.52 
                                                2002   203,064          1.282  260,336     0.65        1.25               (23.83)
                                                2001   199,594          1.683  335,826     0.89        1.25               (16.77)

   CitiStreet Small Company Stock Fund--                                                                                         
      Class I                                   2003    98,738          2.179  215,162     0.13        1.25                41.31 
                                                2002    93,220          1.542  143,775     0.52        1.25               (24.67)
                                                2001   100,583          2.047  205,928     0.03        1.25                 0.29 
DELAWARE VIP TRUST                                                                                                               

   Delaware VIP REIT Series-- Standard Class    2003     4,406          1.266    5,578       --        1.25                26.60 
DREYFUS VARIABLE INVESTMENT FUND                                                                                                 

   Dreyfus VIF Developing Leaders               2003    50,883          1.127   57,369     0.03        1.25                29.99 
       Portfolio-- Initial Shares                                                                                                
                                                2002    47,369          0.867   41,064     0.04        1.25               (20.09)
                                                2001    38,641          1.085   41,940     0.46        1.25                (7.34)

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7.   FINANCIAL HIGHLIGHTS (CONTINUED)                                           

                                                        [Enlarge/Download Table]

                                                                                       INVEST-     EXPENSE                     
                                             YEAR             UNIT VALUE       NET     MENT(1)     RATIO(2)    TOTAL RETURN(3) 
                                            ENDED   UNITS      LOWEST TO     ASSETS    INCOME     LOWEST TO       LOWEST TO    
                                            DEC 31  (000S)    HIGHEST ($)    ($000S)  RATIO (%)  HIGHEST (%)     HIGHEST (%)   
                                            ------  ------    -----------    -------  ---------  -----------  -----------------
                                                                                                                               
FRANKLIN TEMPLETON VARIABLE INSURANCE                                                                                          
PRODUCTS TRUST                                                                                                                 
  Franklin Small Cap Fund-- Class 2 Shares    2003     3,061          0.887    2,715       --        1.25                35.63 
                                              2002     1,397          0.654      914     0.25        1.25               (29.60)
                                              2001       500          0.929      464     0.06        1.25                (7.10)

  Mutual Shares Securities Fund--                                                                                              
    Class 2 Shares                            2003     1,487          1.200    1,785     0.12        1.25                20.00 
  Templeton Global Asset Allocation Fund      2003    53,977          2.883  155,637     2.79        1.25                30.63 
     -- Class 1 Shares                                                                                                         

                                              2002    59,226          2.207  130,685     1.97        1.25                (5.32)
                                              2001    67,658          2.331  157,740     1.44        1.25               (10.86)
  Templeton Growth Securities Fund--          2003    97,404          3.089  300,901     1.68        1.25                30.95 
      Class 1 Shares                                                                                                           
                                              2002   107,999          2.359  254,721     2.39        1.25               (19.32)
                                              2001   121,148          2.924  354,230     2.07        1.25                (2.21)
GREENWICH STREET SERIES FUND                                                                                                   
  Appreciation Portfolio                      2003     2,887          1.041    3,006     1.01        1.25                23.05 
                                              2002       877          0.846      742     2.56        1.25               (15.40)

  Fundamental Value Portfolio                 2003    30,790          0.981   30,191     0.74        1.25                37.01 
                                              2002    21,691          0.716   15,534     1.27        1.25               (22.26)
                                              2001    10,466          0.921    9,644     0.41        1.25                (7.90)
JANUS ASPEN SERIES                                                                                                             
  International Growth Portfolio--            2003     3,558          0.812    2,890     1.10        1.25                32.90 
      Service Shares                                                                                                           
                                              2002     1,993          0.611    1,218     0.69        1.25               (26.74)
                                              2001       768          0.834      640     0.57        1.25               (16.60)
LAZARD RETIREMENT SERIES, INC.                                                                                                 
  Lazard Retirement Small Cap Portfolio       2003     1,896          1.337    2,535       --        1.25                33.70 

PIMCO VARIABLE INSURANCE TRUST                                                                                                 
  Total Return Portfolio--                                                                                                     
    Administrative Class                      2003     2,400          1.011    2,427     1.66        1.25                 1.10 

PUTNAM VARIABLE TRUST                                                                                                          
  Putnam VT International Equity Fund--       2003     3,592          0.886    3,182     0.77        1.25                26.93 
    Class IB Shares                                                                                                            
                                              2002     2,780          0.698    1,940     0.64        1.25               (18.65)
                                              2001       860          0.858      738       --        1.25               (14.20)
  Putnam VT Small Cap Value Fund-- Class      2003    27,307          1.300   35,491     0.32        1.25                47.90 
      IB Shares                                                                                                                
                                              2002    23,342          0.879   20,527     0.16        1.25               (19.36)
                                              2001    11,993          1.090   13,067       --        1.25                 9.00 
SALOMON BROTHERS VARIABLE SERIES FUNDS INC.                                                                                    
  All Cap Fund-- Class I                      2003    23,366          0.960   22,436     0.31        1.25                37.34 
                                              2002    16,641          0.699   11,637     0.46        1.25               (26.03)
                                              2001    11,455          0.945   10,823     1.37        1.25                (5.50)

  Investors Fund-- Class I                    2003     5,708          0.910    5,194     1.66        1.25                30.75 
                                              2002     4,408          0.696    3,069     1.41        1.25               (24.02)
                                              2001     2,700          0.916    2,474     1.50        1.25                (8.40)

  Small Cap Growth Fund-- Class I             2003      5,518         0.921    5,080       --        1.25                47.12 
                                              2002      1,495         0.626      936       --        1.25               (35.53)
                                              2001        508         0.971      493       --        1.25                (2.90)

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7.   FINANCIAL HIGHLIGHTS (CONTINUED)                                           

                                                        [Enlarge/Download Table]

                                                                                      INVEST-     EXPENSE                     
                                             YEAR            UNIT VALUE       NET     MENT(1)     RATIO(2)    TOTAL RETURN(3) 
                                            ENDED   UNITS     LOWEST TO     ASSETS    INCOME     LOWEST TO      LOWEST TO     
                                            DEC 31  (000S)   HIGHEST ($)    ($000S)  RATIO (%)  HIGHEST (%)    HIGHEST (%)    
                                            ------  ------   -----------    -------  ---------  -----------  ---------------  
                                                                                                                              
THE TRAVELERS SERIES TRUST                                                                                                    
  Disciplined Mid Cap Stock Portfolio         2003   30,484          1.422   43,340     0.32        1.25                32.16 
                                              2002   29,243          1.076   31,472     0.56        1.25               (15.41)
                                              2001   25,279          1.272   32,155     0.29        1.25                (5.22)

  MFS Mid Cap Growth Portfolio                2003   11,788          0.531    6,256       --        1.25                35.46 
                                              2002    5,435          0.392    2,131       --        1.25               (49.48)
                                              2001    2,868          0.776    2,225       --        1.25               (22.40)

  Pioneer Fund Portfolio                      2003   11,577          1.527   17,682     1.45        1.25                22.26 
                                              2002   12,848          1.249   16,052     6.46        1.25               (31.11)
                                              2001   16,857          1.813   30,560     1.77        1.25               (23.95)

  Social Awareness Stock Portfolio            2003   15,328          2.513   38,519     0.55        1.25                27.24 
                                              2002   15,984          1.975   31,566     0.86        1.25               (25.78)
                                              2001   17,250          2.661   45,899     0.41        1.25               (16.71)

  U.S. Government Securities Portfolio        2003   44,869          2.040   91,518     4.23        1.25                 1.49 
                                              2002   57,617          2.010  115,815     8.70        1.25                12.23 
                                              2001   31,721          1.791   56,820     3.83        1.25                 4.49 
TRAVELERS SERIES FUND INC.                                                                                                    
  MFS Total Return Portfolio                  2003   39,725          2.232   88,676     2.36        1.25                15.05 
                                              2002   37,931          1.940   73,571     6.32        1.25                (6.42)
                                              2001   31,891          2.073   66,113     2.82        1.25                (1.24)
  Salomon Brothers Strategic Total            2003      365          1.843      673     7.15        1.25                11.97 
    Return Bond Portfolio                                                                                                     
                                              2002      274          1.646      452     9.98        1.25                 6.95 
                                              2001      298          1.539      459     5.99        1.25                 5.12 
  SB Adjustable Rate Income Portfolio--       2003       37          1.000       37     0.71        1.25                   -- 
    Class I Shares                                                                                                            

  Smith Barney Aggressive Growth Portfolio    2003   46,836          0.836   39,149       --        1.25                32.91 
                                              2002   26,372          0.629   16,593       --        1.25               (33.51)
                                              2001   11,837          0.946   11,196       --        1.25                (5.40)
  Smith Barney International All Cap          2003   16,482          1.102   18,163     1.10        1.25                25.94 
    Growth Portfolio                                                                                                          
                                              2002   17,422          0.875   15,251     0.94        1.25               (26.66)
                                              2001   20,784          1.193   24,795       --        1.25               (32.02)

  Smith Barney Large Cap Value Portfolio      2003   12,794          1.858   23,766     1.77        1.25                26.05 
                                              2002   13,429          1.474   19,795     3.70        1.25               (26.34)
                                              2001   15,355          2.001   30,731     1.39        1.25                (9.33)
  Smith Barney Large Capitalization           2003   16,497          0.984   16,228     0.04        1.25                45.78 
    Growth Portfolio                                                                                                          
                                              2002    2,527          0.675    1,705     0.51        1.25               (25.66)
                                              2001      996          0.908      905       --        1.25                (9.20)

  Strategic Equity Portfolio                  2003   38,380          2.065   79,237       --        1.25                30.94 
                                              2002   40,015          1.577   63,111     0.58        1.25               (34.40)
                                              2001   45,324          2.404  108,977     0.20        1.25               (14.45)
VAN KAMPEN LIFE INVESTMENT TRUST                                                                                              
  Comstock Portfolio - Class II Shares        2003    1,507          1.253    1,888       --        1.25                25.30 

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7. FINANCIAL HIGHLIGHTS (CONTINUED)                                             

                                                        [Enlarge/Download Table]

                                                                                           INVEST-     EXPENSE                     
                                               YEAR             UNIT VALUE        NET      MENT(1)     RATIO(2)    TOTAL RETURN(3) 
                                              ENDED   UNITS      LOWEST TO      ASSETS     INCOME     LOWEST TO      LOWEST TO     
                                              DEC 31  (000S)    HIGHEST ($)     ($000S)   RATIO (%)  HIGHEST (%)    HIGHEST (%)    
                                              ------  ------    -----------     -------   ---------  -----------  ---------------  
                                                                                                                                   
VARIABLE INSURANCE PRODUCTS FUND                                                                                                   
   Equity - Income Portfolio - Initial Class    2003   136,245           2.602   354,471      1.82       1.25                28.75 
                                                2002   145,201           2.021   293,492      1.81       1.25               (17.98)
                                                2001   163,253           2.464   402,317      1.77       1.25                (6.17)

   Growth Portfolio - Initial Class             2003   212,463           2.665   566,276      0.27       1.25                31.22 
                                                2002   228,719           2.031   464,625      0.26       1.25               (30.99)
                                                2001   261,639           2.943   770,037      0.08       1.25               (18.68)

   High Income Portfolio - Initial Class        2003    25,476           1.774    45,206      6.99       1.25                25.64 
                                                2002    26,480           1.412    37,384     11.04       1.25                 2.17 
                                                2001    30,344           1.382    41,935     13.62       1.25               (12.81)
VARIABLE INSURANCE PRODUCTS FUND II                                                                                                
  Asset Manager Portfolio - Initial Class       2003   112,404           2.211   248,544      3.66       1.25                16.49 
                                                2002   123,598           1.898   234,563      4.15       1.25                (9.83)
                                                2001   146,070           2.105   307,544      4.40       1.25                (5.31)

  Contrafund(R) Portfolio - Service Class 2     2003     3,102           1.241     3,851         -       1.25                24.10 

VARIABLE INSURANCE PRODUCTS FUND III                                                                                               
  Mid Cap Portfolio - Service Class 2           2003    14,087           1.249    17,590      0.22       1.25                36.50 
                                                2002     8,999           0.915     8,229      0.37       1.25               (11.08)
                                                2001     1,515           1.029     1,559         -       1.25                 2.90 

(1)  These amounts represent the dividends,  excluding  distributions of capital
gains,  received by the  subaccount  from the  underlying  mutual  fund,  net of
management fees assessed by the fund manager, divided by the average net assets.
These ratios exclude those expenses, such as mortality and expense charges, that
are assessed  against  contract owner accounts either through  reductions in the
unit values or the redemption of units. The recognition of investment  income by
the subaccount is affected by the timing of the  declaration of dividends by the
underlying fund in which the subaccount invests.                                

(2)  These amounts  represent the annualized  contract  expenses of the separate
account,  consisting primarily of mortality and expense charges, for each period
indicated.  The ratios  include  only  those  expenses  that  result in a direct
reduction  to unit  values.  Charges made  directly to contract  owner  accounts
through the  redemption of units and expenses of the  underlying  fund have been
excluded.                                                                       

(3)  These  amounts  represent  the  total  return  for  the  period  indicated,
including  changes in the value of the underlying  fund,  and expenses  assessed
through the  reduction of unit values.  These ratios do not include any expenses
assessed  through the  redemption of units.  The total return is calculated  for
each  period  indicated  or  from  the  effective  date  through  the end of the
reporting period. The total return is presented as a range of minimum to maximum
values.                                                                         

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8.   SCHEDULE OF ACCUMULATION AND ANNUITY UNITS                                 
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002                        

                                                        [Enlarge/Download Table]

                                                                           DREYFUS STOCK INDEX FUND -                               
                                             CAPITAL APPRECIATION FUND           INITIAL SHARES            HIGH YIELD BOND TRUST    
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
                                                                                                                                    
Accumulation and annuity units                                                                                                      
  beginning of year .......................  120,205,079    137,755,109    153,048,246    164,059,331      8,053,320      7,732,247 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..   15,013,548     20,566,645     28,866,043     33,945,261      5,687,900      4,376,088 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....  (26,892,243)   (38,091,582)   (32,874,452)   (44,914,394)    (4,363,349)    (4,053,886)
Annuity units .............................      (13,870)       (25,093)       (25,671)       (41,952)        (1,081)        (1,129)
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................  108,312,514    120,205,079    149,014,166    153,048,246      9,376,790      8,053,320 
                                            ============   ============   ============   ============   ============   ============ 

                                                                           ALLIANCEBERNSTEIN PREMIER      CITISTREET DIVERSIFIED    
                                                MANAGED ASSETS TRUST      GROWTH PORTFOLIO - CLASS B       BOND FUND - CLASS I      
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................   46,383,438     52,482,116      2,555,550        848,693    202,596,627    223,788,825 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..    3,967,297      4,315,725      1,944,084      2,421,872     42,771,186     46,960,765 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....   (6,673,080)   (10,399,816)    (1,634,547)      (715,015)   (64,044,281)   (68,130,384)
Annuity units .............................       (8,221)       (14,587)            --             --        (23,399)       (22,579)
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................   43,669,434     46,383,438      2,865,087      2,555,550    181,300,133    202,596,627 
                                            ============   ============   ============   ============   ============   ============ 

                                              CITISTREET INTERNATIONAL     CITISTREET LARGE COMPANY       CITISTREET SMALL COMPANY  
                                                STOCK FUND - CLASS I         STOCK FUND - CLASS I           STOCK FUND - CLASS I    
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................  157,090,551    157,226,414    203,063,964    199,593,964     93,220,052    100,583,199 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..   57,474,153     55,625,491     52,629,548     50,346,753     29,878,842     18,203,027 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....  (81,114,560)   (55,754,355)   (47,428,515)   (46,867,975)   (24,350,636)   (25,560,505)
Annuity units .............................       (8,652)        (6,999)       (11,770)        (8,778)        (9,942)        (5,669)
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................  133,441,492    157,090,551    208,253,227    203,063,964     98,738,316     93,220,052 
                                            ============   ============   ============   ============   ============   ============ 

                                                                            DREYFUS VIF DEVELOPING                                  
                                                 DELAWARE VIP REIT            LEADERS PORTFOLIO -        FRANKLIN SMALL CAP FUND -  
                                              SERIES - STANDARD CLASS           INITIAL SHARES                CLASS 2 SHARES        
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................           --             --     47,369,019     38,640,849      1,397,130        499,835 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..    5,261,698             --     19,784,629     29,778,110      3,398,466      3,463,991 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....     (855,961)            --    (16,268,529)   (21,047,408)    (1,734,675)    (2,566,696)
Annuity units .............................           --             --         (2,447)        (2,532)            --             -- 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................    4,405,737             --     50,882,672     47,369,019      3,060,921      1,397,130 
                                            ============   ============   ============   ============   ============   ============ 

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8.   SCHEDULE OF ACCUMULATION AND ANNUITY UNITS                                 
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 (CONTINUED)            

                                                        [Enlarge/Download Table]

                                                                             TEMPLETON GLOBAL ASSET       TEMPLETON GLOBAL INCOME   
                                              MUTUAL SHARES SECURITIES         ALLOCATION FUND -             SECURITIES FUND -      
                                               FUND - CLASS 2 SHARES             CLASS 1 SHARES                CLASS 1 SHARES       
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
                                                                                                                                    
Accumulation and annuity units                                                                                                      
  beginning of year .......................           --             --     59,225,975     67,658,190             --      6,108,991 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..    1,626,866             --      6,240,011      5,751,801             --      1,558,959 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....     (139,924)            --    (11,481,769)   (14,169,235)            --     (7,640,592)
Annuity units .............................           --             --         (6,813)       (14,781)            --        (27,358)
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................    1,486,942             --     53,977,404     59,225,975             --             -- 
                                            ============   ============   ============   ============   ============   ============ 

                                            TEMPLETON GROWTH SECURITIES                                      FUNDAMENTAL VALUE      
                                               FUND - CLASS 1 SHARES        APPRECIATION PORTFOLIO               PORTFOLIO          
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................  107,999,132    121,148,360        876,855             --     21,690,834     10,466,261 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..    9,915,019     12,032,988      2,645,703      1,007,549     14,846,726     18,085,643 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....  (20,504,964)   (25,174,260)      (636,006)      (130,694)    (5,747,321)    (6,861,070)
Annuity units .............................       (5,615)        (7,956)            --             --           (245)            -- 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................   97,403,572    107,999,132      2,886,552        876,855     30,789,994     21,690,834 
                                            ============   ============   ============   ============   ============   ============ 

                                                INTERNATIONAL GROWTH           LAZARD RETIREMENT          TOTAL RETURN PORTFOLIO -  
                                             PORTFOLIO - SERVICE SHARES       SMALL CAP PORTFOLIO           ADMINISTRATIVE CLASS    
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................    1,992,687        767,684             --             --             --             -- 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..   16,075,286     19,004,875      2,263,703             --      3,407,030             -- 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....  (14,510,160)   (17,779,872)      (367,569)            --     (1,007,133)            -- 
Annuity units .............................           --             --             --             --             --             -- 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................    3,557,813      1,992,687      1,896,134             --      2,399,897             -- 
                                            ============   ============   ============   ============   ============   ============ 

                                                     PUTNAM VT                     PUTNAM VT                                        
                                            INTERNATIONAL EQUITY FUND -     SMALL CAP VALUE FUND -                                  
                                                  CLASS IB SHARES               CLASS IB SHARES            ALL CAP FUND - CLASS I   
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................    2,779,812        860,189     23,342,138     11,993,138     16,640,804     11,454,930 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..   25,424,117     31,708,118     16,222,879     29,801,550     11,603,276     12,685,659 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....  (24,611,779)   (29,788,495)   (12,254,524)   (18,449,248)    (4,878,322)    (7,499,785)
Annuity units .............................           --             --         (3,191)        (3,302)            --             -- 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................    3,592,150      2,779,812     27,307,302     23,342,138     23,365,758     16,640,804 
                                            ============   ============   ============   ============   ============   ============ 

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8.   SCHEDULE OF ACCUMULATION AND ANNUITY UNITS                                 
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 (CONTINUED)            

                                                        [Enlarge/Download Table]

                                                                            SMALL CAP GROWTH FUND -          DISCIPLINED MID CAP    
                                              INVESTORS FUND - CLASS I              CLASS I                    STOCK PORTFOLIO      
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
                                                                                                                                    
Accumulation and annuity units                                                                                                      
  beginning of year .......................    4,408,473      2,700,117      1,495,493        508,252     29,242,637     25,278,517 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..    2,768,537      3,428,903      6,527,830      1,860,439     10,317,889     16,154,060 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....   (1,468,959)    (1,720,547)    (2,505,207)      (873,198)    (9,074,733)   (12,188,336)
Annuity units .............................           --             --             --             --         (1,543)        (1,604)
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................    5,708,051      4,408,473      5,518,116      1,495,493     30,484,250     29,242,637 
                                            ============   ============   ============   ============   ============   ============ 

                                                     MFS MID CAP                                              SOCIAL AWARENESS      
                                                  GROWTH PORTFOLIO          PIONEER FUND PORTFOLIO            STOCK PORTFOLIO       
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................    5,435,083      2,867,666     12,848,342     16,856,879     15,983,693     17,249,885 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..   13,554,252     10,590,589      2,089,028      3,774,363      2,158,101      2,762,110 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....   (7,201,486)    (8,023,172)    (3,358,834)    (7,781,360)    (2,814,159)    (4,028,302)
Annuity units .............................           --             --         (1,546)        (1,540)            --             -- 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................   11,787,849      5,435,083     11,576,990     12,848,342     15,327,635     15,983,693 
                                            ============   ============   ============   ============   ============   ============ 

                                                   U.S. GOVERNMENT                                           PIONEER STRATEGIC      
                                                SECURITIES PORTFOLIO      MFS TOTAL RETURN PORTFOLIO          INCOME PORTFOLIO      
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................   57,617,140     31,721,264     37,930,886     31,890,732             --      5,511,538 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..   15,901,099     47,569,329     12,699,311     18,496,308             --        497,626 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....  (28,647,738)   (21,692,326)   (10,901,598)   (12,451,410)            --     (6,009,164)
Annuity units .............................       (1,888)        18,873         (3,145)        (4,744)            --             -- 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................   44,868,613     57,617,140     39,725,454     37,930,886             --             -- 
                                            ============   ============   ============   ============   ============   ============ 

                                             SALOMON BROTHERS STRATEGIC   SB ADJUSTABLE RATE INCOME             SMITH BARNEY        
                                            TOTAL RETURN BOND PORTFOLIO   PORTFOLIO - CLASS I SHARES    AGGRESSIVE GROWTH PORTFOLIO 
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................      274,333        298,023             --             --     26,371,596     11,836,932 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..      322,337        264,347         48,223             --     30,197,534     28,728,629 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....     (231,747)      (288,037)       (11,481)            --     (9,733,087)   (14,193,965)
Annuity units .............................           --             --             --             --           (268)            -- 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................      364,923        274,333         36,742             --     46,835,775     26,371,596 
                                            ============   ============   ============   ============   ============   ============ 

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8. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS                               
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 (CONTINUED)            

                                                        [Enlarge/Download Table]

                                                                                 SMITH BARNEY                                       
                                                   SMITH BARNEY              INTERNATIONAL ALL CAP             SMITH BARNEY         
                                               HIGH INCOME PORTFOLIO           GROWTH PORTFOLIO          LARGE CAP VALUE PORTFOLIO  
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
                                                                                                                                    
Accumulation and annuity units                                                                                                      
  beginning of year .......................           --      2,667,071     17,421,508     20,784,496     13,428,790     15,355,264 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..           --        324,058     32,018,217     55,004,194      2,769,575      2,966,875 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....           --     (2,991,129)   (32,952,141)   (58,361,913)    (3,403,498)    (4,892,456)
Annuity units .............................           --             --         (5,090)        (5,269)          (856)          (893)
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................           --             --     16,482,494     17,421,508     12,794,011     13,428,790 
                                            ============   ============   ============   ============   ============   ============ 

                                                    SMITH BARNEY                                                                    
                                                LARGE CAPITALIZATION                                        COMSTOCK PORTFOLIO -    
                                                  GROWTH PORTFOLIO        STRATEGIC EQUITY PORTFOLIO           CLASS II SHARES      
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................    2,526,696        995,768     40,014,581     45,323,782             --             -- 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..   17,981,642      2,656,929      6,877,835      9,038,936      1,821,299             -- 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....   (4,011,319)    (1,126,001)    (8,508,887)   (14,344,120)      (314,747)            -- 
Annuity units .............................         (241)            --         (3,873)        (4,017)            --             -- 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................   16,496,778      2,526,696     38,379,656     40,014,581      1,506,552             -- 
                                            ============   ============   ============   ============   ============   ============ 

                                            EQUITY - INCOME PORTFOLIO -       GROWTH PORTFOLIO -          HIGH INCOME PORTFOLIO -   
                                                   INITIAL CLASS                 INITIAL CLASS                 INITIAL CLASS        
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................  145,200,704    163,252,520    228,718,720    261,638,873     26,479,748     30,344,155 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..   16,080,958     17,667,310     25,139,956     31,224,037     15,165,958     10,358,271 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....  (25,016,538)   (35,697,437)   (41,375,288)   (64,116,337)   (16,165,804)   (14,218,176)
Annuity units .............................      (20,218)       (21,689)       (20,842)       (27,853)        (4,302)        (4,502)
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................  136,244,906    145,200,704    212,462,546    228,718,720     25,475,600     26,479,748 
                                            ============   ============   ============   ============   ============   ============ 

                                             ASSET MANAGER PORTFOLIO -     CONTRAFUND(R) PORTFOLIO -        MID CAP PORTFOLIO -     
                                                   INITIAL CLASS                SERVICE CLASS 2               SERVICE CLASS 2       
                                            ---------------------------   ---------------------------   --------------------------- 
                                                2003           2002           2003           2002           2003           2002     
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  beginning of year .......................  123,597,633    146,070,366             --             --      8,998,650      1,515,233 
Accumulation units purchased and                                                                                                    
  transferred from other funding options ..    7,522,311      8,415,213      3,494,838             --      9,192,553     12,843,605 
Accumulation units redeemed and                                                                                                     
  transferred to other funding options ....  (18,703,034)   (30,866,744)      (392,744)            --     (4,104,446)    (5,360,188)
Annuity units .............................      (13,222)       (21,202)            --             --             --             -- 
                                            ------------   ------------   ------------   ------------   ------------   ------------ 
Accumulation and annuity units                                                                                                      
  end of year .............................  112,403,688    123,597,633      3,102,094             --     14,086,757      8,998,650 
                                            ============   ============   ============   ============   ============   ============ 

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 NOTES TO FINANCIAL STATEMENTS - CONTINUED

8. SCHEDULE OF ACCUMULATION AND ANNUITY UNITS                               
FOR THE YEARS ENDED DECEMBER 31, 2003 AND 2002 (CONTINUED)            

                                            COMBINED
                                           -------------------------------
                                           2003             2002
                                           --------------   --------------
Accumulation and annuity units                                                  
beginning of year ........................   2,067,525,919    2,148,335,658 
Accumulation units purchased and                                                
transferred from other funding options ...     611,597,293      686,267,001 
Accumulation units redeemed and                                                 
transferred to other funding options .....    (635,271,774)    (766,819,585)
Annuity units ..............................        (197,951)        (257,155)  
                                           --------------   --------------
Accumulation and annuity units                                                  
end of year ..............................   2,043,653,487    2,067,525,919 
                                           ==============   ==============

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INDEPENDENT AUDITORS' REPORT

The Board of Directors of the Travelers  Life and Annuity  Company and 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, 2003 and the related
statements  of  operations  and for the year  then  ended and the  statement  of
changes in net assets for each of years in the two-year  period then ended,  and
the financial  highlights  for each of the years in the  three-year  period then
ended.   These   financial   statements   and  financial   highlights   are  the
responsibility of the Company's management.  Our responsibility is to express an
opinion on these  financial  statements  and financial  highlights  based on our
audits.                                                                         

We conducted our audits in accordance with auditing standards generally accepted
in the  United  States of  America.  Those  standards  require  that we plan and
perform the audit to obtain reasonable assurance about whether the balance sheet
is free of material misstatement.  An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial  statements and
financial  highlights.  Our procedures included confirmation of securities owned
as of December 31, 2003, 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 and financial  highlights referred to
above present fairly, in all material  respects,  the financial  position of The
Travelers Fund U for Variable  Annuities as of December 31, 2003, the results of
its operations  for the year then ended,  the changes in its net assets for each
of the years in the two year period then ended, and the financial highlights for
each of the years in the  three-year  period  then  ended,  in  conformity  with
accounting principles generally accepted in the United States of America.       

/s/ KPMG LLP

Hartford, Connecticut                                                           
March 12, 2004                                                                  

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INDEPENDENT AUDITORS
KPMG LLP
 Hartford, Connecticut

This report is prepared for the general  information  of contract  owners and is
not an offer of units of The Travelers  Fund U for Variable  Annuities or shares
of 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) (12-03) Printed in U.S.A.                                      

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholder                                          
The Travelers Insurance Company:                                                

We have audited the accompanying consolidated balance sheets of The Travelers   
Insurance Company and subsidiaries as of December 31, 2003 and 2002, and the    
related consolidated statements of income, changes in shareholder's equity, and 
cash flows for each of the years in the three-year period ended December 31,    
2003. 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 auditing standards generally accepted
in the United States of America. 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, 2003 and 2002, and the    
results of their operations and their cash flows for each of the years in the   
three-year period ended December 31, 2003, in conformity with accounting        
principles generally accepted in the United States of America.                  

As discussed in Note 1 to the consolidated financial statements, the Company    
changed its methods of accounting for variable interest entities in 2003, for   
goodwill and intangible assets in 2002, and for derivative instruments and      
hedging activities and for securitized financial assets in 2001.                

/s/KPMG LLP                                                                     

Hartford, Connecticut                                                           
February 26, 2004                                                               

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF INCOME
 ($ IN MILLIONS)

FOR THE YEAR ENDED DECEMBER 31,                    2003       2002        2001  
--------------------------------------------------------------------------------

REVENUES                                                                        
Premiums                                          $2,327     $1,924      $2,102 
Net investment income                              3,058      2,936       2,831 
Realized investment gains (losses)                    37       (322)        125 
Fee income                                           606        560         537 
Other revenues                                       111        136         107 
--------------------------------------------------------------------------------
   Total Revenues                                 6,139      5,234       5,702
--------------------------------------------------------------------------------

BENEFITS AND EXPENSES                                                           
Current and future insurance benefits              2,102      1,711       1,862 
Interest credited to contractholders               1,248      1,220       1,179 
Amortization of deferred acquisition costs           501        393         379 
General and administrative expenses                  459        407         371 
--------------------------------------------------------------------------------
   Total Benefits and Expenses                    4,310      3,731       3,791
--------------------------------------------------------------------------------

Income from operations before federal                                           
income taxes and cumulative effects                                         
 of changes in accounting principles              1,829      1,503       1,911
--------------------------------------------------------------------------------

Federal income taxes                                                            
   Current                                          360        236         471
   Deferred                                         111        185         159
--------------------------------------------------------------------------------
   Total Federal Income Taxes                       471        421         630
--------------------------------------------------------------------------------
Income before cumulative effects of                                             
 changes in accounting principles                 1,358      1,082       1,281

Cumulative effect of change in accounting                                       
for derivative instruments and                                              
  hedging activities, net of tax                      --         --          (6)
Cumulative effect of change in accounting for                                   
  securitized financial assets, net of tax            --         --          (3)
--------------------------------------------------------------------------------
Net Income                                        $1,358     $1,082      $1,272 
================================================================================

 See Notes to Consolidated Financial Statements.

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
 CONSOLIDATED BALANCE SHEETS
 ($ IN MILLIONS)

AT DECEMBER 31,                                                2003        2002 
--------------------------------------------------------------------------------

ASSETS                                                                          
Fixed maturities, available for sale at fair value                              
(including $2,170 and $2,687 subject to securities                          
  lending agreements) (cost $40,119; $35,428)                $42,323     $36,434
Equity securities, at fair value (cost $323; $328)               362         332
Mortgage loans                                                 1,886       1,985
Real estate                                                       96          36
Policy loans                                                   1,135       1,168
Short-term securities                                          3,603       4,414
Trading securities, at fair value                              1,707       1,531
Other invested assets                                          5,092       4,909
--------------------------------------------------------------------------------
    Total Investments                                         56,204      50,809
--------------------------------------------------------------------------------

Cash                                                             149         186
Investment income accrued                                        567         525
Premium balances receivable                                      165         151
Reinsurance recoverables                                       4,470       4,301
Deferred acquisition costs                                     4,395       3,936
Separate and variable accounts                                26,972      21,620
Other assets                                                   2,426       1,467
--------------------------------------------------------------------------------
    Total Assets                                             $95,348     $82,995
--------------------------------------------------------------------------------

LIABILITIES                                                                     
Contractholder funds                                         $30,252     $26,634
Future policy benefits and claims                             15,964      15,009
Separate and variable accounts                                26,972      21,620
Deferred federal income taxes                                  2,030       1,448
Trading securities sold not yet purchased, at fair value         637         598
Other liabilities                                              6,136       6,051
--------------------------------------------------------------------------------
    Total Liabilities                                         81,991      71,360
--------------------------------------------------------------------------------

SHAREHOLDER'S EQUITY                                                            
Common stock, par value $2.50; 40 million shares                                
  authorized, issued and outstanding                             100         100
Additional paid-in capital                                     5,446       5,443
Retained earnings                                              6,451       5,638
Accumulated other changes in equity from nonowner sources      1,360         454
--------------------------------------------------------------------------------
    Total Shareholder's Equity                                13,357      11,635
--------------------------------------------------------------------------------
    Total Liabilities and Shareholder's Equity               $95,348     $82,995
================================================================================

 See Notes to Consolidated Financial Statements.

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
 ($ IN MILLIONS)

                                               FOR THE YEAR ENDED DECEMBER 31,
--------------------------------------------------------------------------------
COMMON STOCK                                         2003       2002       2001 
--------------------------------------------------------------------------------
Balance, beginning of year                         $  100     $  100     $  100 
Changes in common stock                                --         --         -- 
--------------------------------------------------------------------------------
Balance, end of year                               $  100     $  100     $  100 
================================================================================

--------------------------------------------------------------------------------
ADDITIONAL PAID-IN CAPITAL                                                      
--------------------------------------------------------------------------------
Balance, beginning of year                         $5,443     $3,864     $3,843 
Stock option tax benefit (expense)                      3        (17)        21 
Capital contributed by parent                          --      1,596         -- 
--------------------------------------------------------------------------------
Balance, end of year                               $5,446     $5,443     $3,864 
================================================================================

--------------------------------------------------------------------------------
RETAINED EARNINGS                                                               
--------------------------------------------------------------------------------
Balance, beginning of year                         $5,638     $5,142     $4,342 
Net income                                          1,358      1,082      1,272 
Dividends to parent                                  (545)      (586)      (472)
--------------------------------------------------------------------------------
Balance, end of year                               $6,451     $5,638     $5,142 
================================================================================

--------------------------------------------------------------------------------
ACCUMULATED OTHER CHANGES                                                       
IN EQUITY FROM NONOWNER SOURCES                                                 
--------------------------------------------------------------------------------
Balance, beginning of year                         $  454     $   74     $  104 
Cumulative effect of accounting for                                             
derivative instruments and hedging                                          
  activities, net of tax                               --         --        (29)
Unrealized gains, net of tax                          818        455         68 
Foreign currency translation, net of tax                4          3         (3)
Derivative instrument hedging activity                                          
  losses, net of tax                                   84        (78)       (66)
--------------------------------------------------------------------------------
Balance, end of year                               $1,360     $  454     $   74 
================================================================================

--------------------------------------------------------------------------------
SUMMARY OF CHANGES IN EQUITY                                                    
FROM NONOWNER SOURCES                                                           
--------------------------------------------------------------------------------
Net income                                         $1,358     $1,082     $1,272 
Other changes in equity from nonowner sources         906        380        (30)
--------------------------------------------------------------------------------
Total changes in equity from nonowner sources      $2,264     $1,462     $1,242 
================================================================================

--------------------------------------------------------------------------------
TOTAL SHAREHOLDER'S EQUITY                                                      
--------------------------------------------------------------------------------
Changes in total shareholder's equity              $1,722     $2,455     $  791 
Balance, beginning of year                         11,635      9,180      8,389 
--------------------------------------------------------------------------------
Balance, end of year                               $13,357    $11,635    $9,180 
================================================================================

 See Notes to Consolidated Financial Statements.

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 INCREASE (DECREASE) IN CASH
 ($ IN MILLIONS)

FOR THE YEAR ENDED DECEMBER 31,                     2003       2002        2001 
--------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES                                            
  Premiums collected                           $  2,335   $  1,917    $  2,109
  Net investment income received                  2,787      2,741       2,430
  Other revenues received                           335        384         867
   Benefits and claims paid                       (1,270)    (1,218)     (1,176)
   Interest paid to contractholders               (1,226)    (1,220)     (1,159)
   Operating expenses paid                        (1,375)    (1,310)     (1,000)
   Income taxes paid                                (456)      (197)       (472)
Trading account investments (purchases),                                  
      sales, net                                    (232)        76         (92)
   Other                                             (84)      (105)       (227)
--------------------------------------------------------------------------------
     Net Cash Provided by Operating Activities      814      1,068       1,280
--------------------------------------------------------------------------------

CASH FLOWS FROM INVESTING ACTIVITIES                                            
Proceeds from maturities of investments                                   
     Fixed maturities                             7,446      4,459       3,706
     Mortgage loans                                 358        374         455
Proceeds from sales of investments                                        
     Fixed maturities                            15,078     15,472      14,110
     Equity securities                              124        212         112
     Real estate held for sale                        5         26           6
Purchases of investments                                                  
      Fixed maturities                           (26,766)   (23,623)    (22,556)
      Equity securities                             (144)      (134)        (50)
      Mortgage loans                                (317)      (355)       (287)
  Policy loans, net                                  34         39          41
   Short-term securities purchases, net              814     (1,320)       (914)
  Other investments (purchases), sales, net         108        (69)        103
Securities transactions in course of                                      
     settlement, net                               (618)       529       1,086
--------------------------------------------------------------------------------
      Net Cash Used in Investing Activities       (3,878)    (4,390)     (4,188)
--------------------------------------------------------------------------------

CASH FLOWS FROM FINANCING ACTIVITIES                                            
  Contractholder fund deposits                    8,326      8,505       8,308
   Contractholder fund withdrawals                (4,754)    (4,729)     (4,932)
  Capital contribution by parent                     --        172          --
   Dividends to parent company                      (545)      (586)       (472)
--------------------------------------------------------------------------------
     Net Cash Provided by Financing Activities    3,027      3,362       2,904
--------------------------------------------------------------------------------
Net increase (decrease) in cash                      (37)        40          (4)
Cash at December 31, previous year                   186        146         150 
--------------------------------------------------------------------------------
Cash at December 31, current year               $    149   $    186    $    146 
================================================================================

 See Notes to Consolidated Financial Statements.

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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 Citigroup Insurance Holding 
   Corporation (CIHC), an indirect wholly owned subsidiary of Citigroup Inc.
    (Citigroup), a diversified global financial services holding company whose
businesses provide a broad range of financial services to consumer and
     corporate customers around the world. 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, CitiLife    
  Financial Limited (CitiLife) and National Benefit Life Insurance Company
(NBL). Significant intercompany transactions and balances have been   
eliminated. The Company consolidates entities deemed to be variable   
interest entities when the Company is determined to be the primary    
beneficiary under Financial Accounting Standards Board (FASB)         
   Interpretation No. 46, "Consolidation of Variable Interest Entities" (FIN
46).                                                                  

At December 31, 2001, the Company was a wholly owned subsidiary of The
   Travelers Insurance Group, Inc. (TIGI). On February 4, 2002, TIGI changed
its name to Travelers Property Casualty Corp. (TPC). TPC completed its
initial public offering (IPO) on March 27, 2002 and on August 20, 2002
 Citigroup made a tax-free distribution of the majority of its remaining
    interest in TPC, to Citigroup's stockholders. Prior to the IPO, the common
 stock of TIC was distributed by TPC to CIHC so that TIC would remain an
indirect wholly owned subsidiary of Citigroup. See Note 14.           

The financial statements and accompanying footnotes of the Company are
     prepared in conformity with accounting principles generally accepted in the
     United States of America (GAAP). The preparation of financial statements in
    conformity with GAAP 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 2003
presentation.                                                         

ACCOUNTING CHANGES                                                    

CONSOLIDATION OF VARIABLE INTEREST ENTITIES                           

In January 2003, the FASB released FIN 46, which changes the method of
  determining whether certain entities, including securitization entities,
   should be included in the Company's consolidated financial statements. An
    entity is subject to FIN 46 and is called a variable interest entity (VIE)
   if it has (1) equity that is insufficient to permit the entity to finance
     its activities without additional subordinated financial support from other
 parties, or (2) equity investors that cannot make significant decisions
     about the entity's operations, or that do not absorb the expected losses or
receive the expected returns of the entity. All other entities are    
evaluated for consolidation under Statement of Financial Accounting   
     Standards (SFAS) No. 94, "Consolidation of All Majority-Owned Subsidiaries"
   (SFAS 94). A VIE is consolidated by its primary beneficiary, which is the
     party involved with the VIE that has a majority of the expected losses or a
majority of the expected residual returns or both.                    

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

For any VIEs that must be consolidated under FIN 46 that were created 
before February 1, 2003, the assets, liabilities and noncontrolling   
   interest of the VIE are initially measured at their carrying amounts with
  any difference between the net amount added to the balance sheet and any
     previously recognized interest being recognized as the cumulative effect of
an accounting change. If determining the carrying amounts is not      
 practicable, fair value at the date FIN 46 first applies may be used to
    measure the assets, liabilities and noncontrolling interest of the VIE. In
October 2003, the FASB announced that the effective date of FIN 46 was
  deferred from July 1, 2003 to periods ending after December 15, 2003 for
VIEs created prior to February 1, 2003. TIC elected to implement the  
provisions of FIN 46 in the 2003 third quarter, resulting in the      
consolidation of VIEs, increasing both assets and liabilities by      
approximately $407 million.                                           

   The implementation of FIN 46 encompassed a review of numerous entities to
determine the impact of adoption and considerable judgment was used in
    evaluating whether or not a VIE should be consolidated. The FASB continues
  to provide additional guidance on implementing FIN 46 through FASB Staff
Positions.                                                            

   In December 2003, the FASB released a revision of FIN 46 (FIN 46-R or the
    interpretation), which includes substantial changes from the original. The
     calculation of expected losses and expected residual returns have both been
  altered to reduce the impact of decision maker and guarantor fees in the
    calculation of expected residual returns and expected losses. In addition,
    FIN 46-R changes the definition of a variable interest. The interpretation
   permits adoption of either the original or the revised versions of FIN 46
  until the first quarter of 2004, at which time FIN 46-R must be adopted.
   For 2003 year-end, the Company's consolidated financial statements are in
accordance with the original.                                         

    The Company is evaluating the impact of applying FIN 46-R to existing VIEs
     in which it has variable interests and has not yet completed this analysis.
     At this time, it is anticipated that the effect of adopting FIN 46-R on the
  Company's consolidated balance sheet would be immaterial. As the Company
    continues to evaluate the impact of applying FIN 46-R, additional entities
may be identified that would need to be consolidated. See Note 3.     

DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES                         

     In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
    Derivative Instruments and Hedging Activities" (SFAS 149). SFAS 149 amends
and clarifies accounting for derivative instruments, including certain
derivative instruments embedded in other contracts, and for hedging   
   activities under SFAS No. 133, "Accounting for Derivative Instruments and
 Hedging Activities." In particular, this Statement clarifies under what
circumstances a contract with an initial net investment meets the     
   characteristic of a derivative and when a derivative contains a financing
   component that warrants special reporting in the statement of cash flows.
This Statement is generally effective for contracts entered into or   
   modified after June 30, 2003 and did not have a significant impact on the
Company's consolidated financial statements.                          

COSTS ASSOCIATED WITH EXIT OR DISPOSAL ACTIVITIES                     

     On January 1, 2003, the Company adopted SFAS No. 146, "Accounting for Costs
    Associated with Exit or Disposal Activities" (SFAS 146). SFAS 146 requires
 that a liability for costs associated with exit or disposal activities,
   other than in a business combination, be recognized when the liability is
  incurred. Previous generally accepted accounting principles provided for
    the recognition of such costs at the date of management's commitment to an
     exit plan. In addition, SFAS 146 requires that the liability be measured at
fair value and be adjusted for changes in estimated cash flows. The   
provisions of the new standard are effective for exit or disposal     
    activities initiated after December 31, 2002. The adoption of SFAS 146 did
not affect the Company's consolidated financial statements.           

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

STOCK-BASED COMPENSATION                                              

The Company and its employees participate in stock option plans of    
Citigroup. On January 1, 2003, the Company adopted the fair value     
recognition provisions of SFAS No. 123, "Accounting for Stock-Based   
   Compensation" (SFAS 123), prospectively for all awards granted, modified,
or settled after January 1, 2003. The prospective method is one of the
adoption methods provided for under SFAS No. 148, "Accounting for     
   Stock-Based Compensation - Transition and Disclosure," issued in December
2002. SFAS 123 requires that compensation cost for all stock awards be
   calculated and recognized over the service period (generally equal to the
    vesting period). This compensation cost is determined using option pricing
models, intended to estimate the fair value of the awards at the grant
   date. Prior to January 1, 2003, the Company applied Accounting Principles
    Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25),
    and related interpretations in accounting for its stock-based compensation
    plans. Under APB 25, there is generally no charge to earnings for employee
   stock option awards because the options granted under these plans have an
    exercise price equal to the market value of the underlying common stock on
    the grant date. Similar to APB 25, an offsetting increase to shareholder's
equity under SFAS 123 is recorded equal to the amount of compensation 
expense charged.                                                      

    Had the Company applied SFAS 123 prior to 2003 in accounting for Citigroup
   stock options, net income would have been the pro forma amounts indicated
below:                                                                

     ---------------------------------------------------------------------------
    YEAR ENDED DECEMBER 31,                             2003     2002     2001
($ IN MILLIONS)                                                       
     ---------------------------------------------------------------------------
    Compensation expense related to    As reported        $2      $--      $--
    stock option plans, net of  tax    Pro forma           7        9       15
     ---------------------------------------------------------------------------
    Net income                         As reported    $1,358   $1,082   $1,272
                                       Pro forma       1,353    1,073    1,257
     ---------------------------------------------------------------------------

BUSINESS COMBINATIONS, GOODWILL AND OTHER INTANGIBLE ASSETS           

Effective January 1, 2002, the Company adopted the FASB SFAS No. 141, 
"Business Combinations" (SFAS 141) and No. 142, "Goodwill and Other   
  Intangible Assets" (SFAS 142). These standards change the accounting for
   business combinations by, among other things, prohibiting the prospective
use of pooling-of-interests accounting and requiring companies to stop
     amortizing goodwill and certain intangible assets with an indefinite useful
life created by business combinations accounted for using the purchase
 method of accounting. Instead, goodwill and intangible assets deemed to
have an indefinite useful life will be subject to an annual review for
impairment. Other intangible assets that are not deemed to have an    
indefinite useful life will continue to be amortized over their useful
lives. See Note 5.                                                    

ACCOUNTING FOR DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES          

  Effective January 1, 2001, the Company adopted SFAS No. 133, "Accounting
 for Derivative Instruments and Hedging Activities" (SFAS 133). SFAS 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 

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     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
     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. The cumulative effect of the adoption of SFAS 133 was an 
after-tax charge of $6 million included in net income and an after-tax
    charge of $29 million to accumulated other changes in equity from nonowner
sources.                                                              

 RECOGNITION OF INTEREST INCOME AND IMPAIRMENT ON PURCHASED AND RETAINED
BENEFICIAL INTERESTS IN SECURITIZED FINANCIAL ASSETS                  

In April 2001, the Company adopted the FASB Emerging Issues Task Force
   (EITF) 99-20, "Recognition of Interest Income and Impairment on Purchased
  and Retained Beneficial Interests in Securitized Financial Assets" (EITF
    99-20). EITF 99-20 establishes guidance on the recognition and measurement
 of interest income and impairment on certain investments, e.g., certain
   asset-backed securities. The recognition of impairment resulting from the
  adoption of EITF 99-20 was recorded as a cumulative catch-up adjustment.
   Interest income on a beneficial interest falling within the scope of EITF
99-20 is to be recognized prospectively. As a result of adopting EITF 
99-20, the Company recorded an after-tax charge of $3 million in the  
   consolidated statement of income. The implementation of this EITF did not
have a significant impact on the Company's consolidated financial     
statements.                                                           

FUTURE APPLICATION OF ACCOUNTING STANDARDS                            

ACCOUNTING AND REPORTING BY INSURANCE ENTERPRISES FOR CERTAIN         
NONTRADITIONAL LONG-DURATION CONTRACTS AND FOR SEPARATE ACCOUNTS      

In July 2003, Statement of Position 03-01 "Accounting and Reporting by
  Insurance Enterprises for Certain Nontraditional Long-Duration Contracts
 and for Separate Accounts" (SOP 03-01) was released. SOP 03-01 provides
    guidance on accounting and reporting by insurance enterprises for separate
  account presentation, accounting for an insurer's interest in a separate
     account, transfers to a separate account, valuation of certain liabilities,
contracts with death or other benefit features, contracts that provide
annuitization benefits, and sales inducements to contract holders. SOP
03-01 is effective for financial statements for fiscal years beginning
     after December 15, 2003. The adoption of SOP 03-01 will not have a material
impact on the Company's consolidated financial statements.            

CONSOLIDATION OF VARIABLE INTEREST ENTITIES                           

  In December 2003, the FASB released a revision of FIN 46 (FIN 46-R). See
   "Consolidation of Variable Interest Entities" in the "Accounting Changes"
section of this Note for a discussion of FIN 46-R.                    

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

ACCOUNTING POLICIES                                                   

INVESTMENTS                                                           

Fixed maturities include bonds, notes and redeemable preferred stocks.
Fixed maturities, including instruments subject to securities lending 
 agreements (see Note 3), are classified as "available for sale" and are
     reported at fair value, with unrealized investment gains and losses, net of
  income taxes, credited or charged directly to shareholder's equity. Fair
     values of investments in fixed maturities are based on quoted market prices
 or dealer quotes. If quoted market prices are not available, discounted
     expected cash flows using market rates commensurate with the credit quality
     and maturity of the investment are used to determine fair value. Changes in
   assumptions could affect the fair values of fixed maturities. Impairments
are realized when investment losses in value are deemed               
   other-than-temporary. The Company conducts a rigorous review each quarter
to identify and evaluate investments that have possible indications of
   impairment. An investment in a debt or equity security is impaired if its
fair value falls below its cost and the decline is considered         
   other-than-temporary. Factors considered in determining whether a loss is
 temporary include the length of time and extent to which fair value has
 been below cost; the financial condition and near-term prospects of the
   issuer; and the Company's ability and intent to hold the investment for a
   period of time sufficient to allow for any anticipated recovery. Changing
   economic conditions - global, regional, or related to specific issuers or
industries - could result in other-than-temporary losses.             

     Also included in fixed maturities are loan-backed and structured securities
(including beneficial interests in securitized financial assets).     
     Beneficial interests in securitized financial assets that are rated "A" and
 below are accounted for under the prospective method in accordance with
 EITF 99-20. Under the prospective method of accounting, the investments
     effective yield and impairment for other-than-temporary losses in value are
based upon projected future cash flows. All other loan-backed and     
 structured securities are amortized using the retrospective method. The
 effective yield used to determine amortization is calculated based upon
actual historical and projected future cash flows.                    

Equity securities, which include common and non-redeemable 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.  

 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 impairment 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. These impairments were
insignificant at December 31, 2003 and 2002.                          

    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.                           

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     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 fair value.             

  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. 

   Other invested assets include equity investments, partnership investments
and real estate joint ventures accounted for on the equity method of  
     accounting. Undistributed income is reported in net investment income. Also
   included in other invested assets is an investment in Citigroup Preferred
Stock, which is recorded at cost. See Note 13.                        

   Accrual of investment 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, swaps, options and forward contracts, as a means of
    hedging exposure to interest rate changes, equity price change, credit and
foreign currency risk. The Company also uses derivative financial     
instruments to enhance portfolio income and replicate cash market     
     investments. The Company, through Tribeca Citigroup Investments Ltd., holds
and issues derivative instruments in conjunction with these investment
   strategies. (See Note 11 for a more detailed description of the Company's
  derivative use.) Derivative financial instruments in a gain position are
reported in the consolidated balance sheet in other assets, derivative
   financial instruments in a loss position are reported in the consolidated
balance sheet in other liabilities and derivatives purchased to offset
  embedded derivatives on variable annuity contracts are reported in other
invested assets.                                                      

   To qualify for hedge accounting, the hedge relationship is designated and
   formally documented at inception detailing the particular risk management
    objective and strategy for the hedge which includes the item and risk that
is being hedged, the derivative that is being used, as well as how    
     effectiveness is being assessed. A derivative has to be highly effective in
   accomplishing the objective of offsetting either changes in fair value or
cash flows for the risk being hedged.                                 

    For fair value hedges, in which derivatives hedge the fair value of assets
    and liabilities, changes in the fair value of derivatives are reflected in
 realized investment gains and losses, together with changes in the fair
value of the related hedged item. The Company primarily hedges        
available-for-sale securities.                                        

     For cash flow hedges, the accounting treatment depends on the effectiveness
  of the hedge. To the extent that derivatives are effective in offsetting
    the variability of the hedged cash flows, changes in the derivatives' fair
value will not be included in current earnings but are reported in the
    accumulated other changes in equity from nonowner sources in shareholder's
    equity. These changes in fair value will be included in earnings of future
  periods when earnings are also affected by the variability of the hedged
cash flows. To the extent these derivatives are not effective, the    
    ineffective portion of the change in fair value is immediately included in
realized investment gains and losses. The Company primarily hedges    
     foreign-denominated funding agreements and floating rate available-for-sale
securities.                                                           

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    For net investment hedges, in which derivatives hedge the foreign currency
exposure of a net investment in a foreign operation, the accounting   
treatment will similarly depend on the effectiveness of the hedge. The
    effective portion of the change in fair value of the derivative, including
   any premium or discount, is reflected in the accumulated other changes in
  equity from nonowner sources as part of the foreign currency translation
     adjustment in shareholder's equity. The ineffective portion is reflected in
realized investment gains and losses.                                 

The effectiveness of these hedging relationships is evaluated on a    
retrospective and prospective basis using quantitative measures of    
correlation. If a hedge relationship is found to be ineffective, it no
  longer qualifies as a hedge and any gains or losses attributable to such
    ineffectiveness as well as subsequent changes in fair value are recognized
in realized investment gains and losses.                              

     For those fair value and cash flow hedge relationships that are terminated,
   hedge designations removed, or forecasted transactions that are no longer
expected to occur, the hedge accounting treatment described in the    
   paragraphs above will no longer apply. For fair value hedges, any changes
  to the hedged item remain as part of the basis of the asset or liability
and are ultimately reflected as an element of the yield. For cash flow
    hedges, any changes in fair value of the end-user derivative remain in the
    accumulated other changes in equity from nonowner sources in shareholder's
 equity and are included in earnings of future periods when earnings are
 also affected by the variability of the hedged cash flow. If the hedged
relationship is discontinued because a forecasted transaction will not
     occur when scheduled, the accumulated changes in fair value of the end-user
  derivative recorded in shareholder's equity are immediately reflected in
realized investment gains and losses.                                 

   The Company enters into derivative contracts that are economic hedges but
 do not qualify or are not designated as hedges for accounting purposes.
     These derivative contracts are carried at fair value, with changes in value
reflected in realized investment gains and losses.                    

FINANCIAL INSTRUMENTS WITH EMBEDDED DERIVATIVES                       

The Company bifurcates an embedded derivative where the economic      
  characteristics and risks of the embedded instrument are not clearly and
closely related to the economic characteristics and risks of the host 
   contract, the entire instrument would not otherwise be remeasured at fair
value and a separate instrument with the same terms of the embedded   
instrument would meet the definition of a derivative under SFAS 133.  

     The Company purchases investments that have embedded derivatives, primarily
     convertible debt securities. These embedded derivatives are carried at fair
value with changes in value reflected in realized investment gains and
    losses. Derivatives embedded in convertible debt securities are classified
    in the consolidated balance sheet as fixed maturity securities, consistent
with the host instruments.                                            

The Company markets certain investment contracts that have embedded   
   derivatives, primarily variable annuity contracts with put options. These
embedded derivatives are carried at fair value, with changes in value 
    reflected in realized investment gains and losses. Derivatives embedded in
     variable annuity contracts are classified in the consolidated balance sheet
as future policy benefits and claims.                                 

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. Impairments are realized when investment losses in        

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 (CONTINUED)

     value are deemed other-than-temporary. The Company conducts regular reviews
 to assess whether other- than-temporary losses exist. Changing economic
     conditions - global, regional, or related to specific issuers or industries
 - could result in other-than-temporary losses. Also included in pre-tax
   revenues 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.               

DEFERRED ACQUISITION COSTS                                            

   Costs of acquiring traditional life and health insurance, universal life,
corporate owned life insurance (COLI), deferred annuities and payout  
annuities are deferred. These deferred acquisition costs (DAC) include
  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. The method for determining 
 amortization of deferred acquisition costs varies by product type based
  upon three different accounting pronouncements: SFAS No. 60, "Accounting
     and Reporting by Insurance Enterprises" (SFAS 60), SFAS No. 91, "Accounting
   for Nonrefundable Fees and Costs Associated with Originating or Acquiring
Loans and Initial Direct Costs of Leases" (SFAS 91) and SFAS No. 97,  
"Accounting and Reporting by Insurance Enterprises for Certain Long   
Duration Contracts and for Realized Gains and Losses from the Sale of 
Investments" (SFAS 97).                                               

   DAC for deferred annuities, both fixed and variable, and payout annuities
   is amortized employing a level effective yield methodology per SFAS 91 as
   indicated by AICPA Practice Bulletin 8. An amortization rate is developed
 using the outstanding DAC balance and projected account balances and is
applied to actual account balances to determine the amount of DAC     
     amortization. The projected account balances are derived using a model that
 contains assumptions related to investment returns and persistency. The
    model rate is evaluated at least annually, and changes in underlying lapse
    and interest rate assumptions are to be treated retrospectively. Variances
in expected equity market returns versus actual returns are treated   
   prospectively and a new amortization pattern is developed so that the DAC
balances will be amortized over the remaining estimated life of the   
  business. DAC for these products is currently being amortized over 10-15
years.                                                                

     DAC for universal life and COLI is amortized in relation to estimated gross
    profits from surrender charges, investment, mortality, and expense margins
     per SFAS 97. Actual profits can vary from management's estimates, resulting
in increases or decreases in the rate of amortization. Re-estimates of
gross profits, performed at least annually, result in retrospective   
     adjustments to earnings by a cumulative charge or credit to income. DAC for
these products is currently being amortized over 16-25 years.         

DAC relating to traditional life, including term insurance, and health
 insurance is amortized in relation to anticipated premiums per SFAS 60.
   Assumptions as to the anticipated premiums are made at the date of policy
   issuance or acquisition and are consistently applied over the life of the
policy. DAC for these products is currently being amortized over 5-20 
years.                                                                

 All DAC is reviewed at least annually to determine if it is recoverable
     from future income, including investment income, and if not recoverable, is
charged to expenses. All other acquisition expenses are charged to    
operations as incurred. See Note 5.                                   

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VALUE OF INSURANCE IN FORCE                                           

     The value of insurance in force is an asset that represents the actuarially
  determined present value of anticipated profits to be realized from life
     insurance and annuities 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 is 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, which is included in
   other assets, is reviewed periodically for recoverability to determine if
     any adjustment is required. Adjustments, if any, are charged to income. See
Note 5.                                                               

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 fair value. Certain
     other separate accounts provide guaranteed levels of return or benefits and
the assets of these accounts are primarily carried at fair value.     

 Amounts assessed to the separate account 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 AND INTANGIBLE ASSETS                                        

   Goodwill and intangible assets are included in other assets. Prior to the
   adoption of FASB SFAS No. 141, "Business Combinations" (SFAS 141) and No.
     142, "Goodwill and Other Intangible Assets" (SFAS 142) in the first quarter
    of 2002, goodwill was being amortized on a straight-line basis principally
     over a 40-year period. The carrying amount of goodwill and other intangible
    assets is reviewed at least annually for indication of impairment in value
that in the view of management would be other-than-temporary. If it is
 determined that goodwill and other intangible assets are unlikely to be
recovered, impairment is recognized on a discounted cash flow basis.  

Upon adoption of SFAS 141 and SFAS 142, the Company stopped amortizing
goodwill and intangible assets deemed to have an infinite useful life.
     Instead, these assets are subject to an annual review for impairment. Other
 intangible assets that are not deemed to have an indefinite useful life
will continue to be amortized over their useful lives. See Note 5.    

CONTRACTHOLDER FUNDS                                                  

Contractholder funds represent receipts from the issuance of universal
     life, COLI, pension investment, guaranteed investment contracts (GICs), and
    certain deferred annuity contracts. For universal life and COLI contracts,
contractholder fund balances are increased by receipts for mortality  
    coverage, contract administration, surrender charges and interest accrued,
where one or more of these elements are not fixed or guaranteed. These
     balances are decreased by withdrawals, mortality charges and administrative
expenses                                                              

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  charged to the contractholder. Interest rates credited to contractholder
    funds related to universal life and COLI range from 3.50% to 5.95%, with a
weighted average interest rate of 4.52%.                              

Pension investment, GICs and certain annuity contracts do not contain 
   significant insurance risks and are considered investment-type contracts.
Contractholder fund balances are increased by receipts and credited   
     interest, and reduced by withdrawals and administrative expenses charged to
the contractholder. Interest rates credited to those investment type  
   contracts range from 1.00% to 8.05% with a weighted average interest rate
of 4.46%.                                                             

FUTURE POLICY BENEFITS                                                

  Future policy benefits represent liabilities for future insurance policy
 benefits for payout annuities and traditional life product. The annuity
     payout reserves are calculated using the mortality and interest assumptions
    used in the actual pricing of the benefit. Mortality assumptions are based
on Company experience and are adjusted to reflect deviations such as  
     substandard mortality in structured settlement benefits. The interest rates
range from 2.0% to 9.0% with a weighted average of 7.02% for these    
    products. Traditional life products include whole life and term insurance.
   Future policy benefits for traditional life products are estimated on the
   basis of actuarial assumptions as to mortality, persistency and interest,
     established at policy issue. Interest assumptions applicable to traditional
  life products range from 2.5% to 7.0%, with a weighted average of 5.23%.
     Assumptions established at policy issue as to mortality and persistency are
based on the Company's experience, which, together with interest      
assumptions, include a margin for adverse deviation. Appropriate      
recognition has been given to experience rating and reinsurance.      

GUARANTY FUND AND OTHER INSURANCE RELATED ASSESSMENTS                 

  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, 2003 and 2002, the Company had a liability of $22.5 million
and $22.6 million, respectively, for guaranty fund assessments and a  
  related premium tax offset recoverable of $4.6 million and $4.2 million,
respectively. 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.                                      

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 are those practices that are incorporated directly or by    
reference in state laws, regulations, and general administrative rules
  applicable to all insurance enterprises domiciled in a particular state.
   Permitted statutory accounting practices include practices not prescribed
   by the domiciliary state, but allowed by the domiciliary state regulatory
 authority. The Company does not have any permitted statutory accounting
practices.                                                            

PREMIUMS                                                              

    Premiums are recognized as revenue when due. Premiums for contracts with a
     limited number of premium payments, due over a significantly shorter period
than the period over which benefits are provided, are                 

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 (CONTINUED)

   considered revenue when due. The portion of premium which is not required
     to provide for benefits and expenses is deferred and recognized in revenues
in a constant relationship to insurance benefits in force.            

FEE INCOME                                                            

   Fee income is recognized on deferred annuity and universal life contracts
  for mortality, administrative and equity protection charges according to
contract due dates. Fee income is recognized on variable annuity and  
universal life separate accounts either daily, monthly, quarterly or  
annually as per contract terms.                                       

OTHER REVENUES                                                        

Other revenues include surrender penalties collected at the time of a 
    contract surrender, and other miscellaneous charges related to annuity and
universal life contracts recognized when received. Also included are  
  revenues from unconsolidated non-insurance subsidiaries. Amortization of
   deferred income related to reinsured blocks of business are recognized in
relation to anticipated premiums and are reported in other revenues.  

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, COLI, pension investment, GICs 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.

2.   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.                                                        

     TRAVELERS LIFE & ANNUITY (TLA) core offerings include  individual  annuity,
     individual life, COLI and group annuity insurance  products  distributed by
     TIC and TLAC principally under the Travelers Life & Annuity name. Among the
     range of  individual  products  offered  are  deferred  fixed and  variable
     annuities,   payout  annuities  and  term,   universal  and  variable  life
     insurance.   The  COLI  product  is  a  variable   universal  life  product
     distributed  through  independent  specialty  brokers.  The group  products
     include  institutional  pensions,  including GICs, payout annuities,  group
     annuities  sold  to   employer-sponsored   retirement  and  savings  plans,
structured settlements and funding agreements.                        

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

 The PRIMERICA business segment consolidates the businesses of Primerica
 Life, Primerica Life Insurance Company of Canada, CitiLife and NBL. The
    Primerica business segment offers individual life products, primarily term
insurance, to customers through a sales force of approximately 107,000
representatives. A great majority of the domestic licensed sales force
works on a part-time basis.                                           

    The accounting policies of the segments are the same as those described in
    the summary of significant accounting policies (see Note 1). 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, and deferred tax assets, were not material.                   

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

($ IN MILLIONS)                                                       
   REVENUES BY SEGMENT                           2003       2002        2001
                                                 ------     ------      ------
    TLA                                         $ 4,479    $ 3,653     $ 4,089
    Primerica                                     1,660      1,581       1,613
                                                -------    -------     -------
    Total Revenues                              $ 6,139    $ 5,234     $ 5,702
                                                =======    =======     =======

NET INCOME BY SEGMENT                                                 
    TLA                                         $   918    $   673     $   826
    Primerica                                       440        409         446
                                                -------    -------     -------
    Net Income                                  $ 1,358    $ 1,082     $ 1,272
                                                =======    =======     =======

ASSETS BY SEGMENT                                                     
    TLA                                         $85,881    $74,562     $69,836
    Primerica                                     9,467      8,433       8,030
                                                -------    -------     -------
    Total segments                              $95,348    $82,995     $77,866
                                                =======    =======     =======

The following tables contain key segment measurements.                          

BUSINESS SEGMENT INFORMATION:                                         
    ----------------------------------------------------------------------------
FOR THE YEAR                                                          
ENDED DECEMBER 31, 2003                                               
      ($ IN MILLIONS)                                         TLA      PRIMERICA
    ----------------------------------------------------------------------------
    Premiums                                               $1,082       $1,245
    Net investment income                                   2,743          315
    Interest credited to contractholders                    1,248           --
    Amortization of deferred acquisition costs                266          235
    Expenditures for deferred acquisition costs               583          377
    Federal income taxes                                      240          231

BUSINESS SEGMENT INFORMATION:                                         
    ----------------------------------------------------------------------------
FOR THE YEAR                                                        
ENDED DECEMBER 31, 2002                                             
      ($ IN MILLIONS)                                         TLA      PRIMERICA
    ----------------------------------------------------------------------------
    Premiums                                               $  730       $1,194
    Net investment income                                   2,646          290
    Interest credited to contractholders                    1,220           --
    Amortization of deferred acquisition costs                174          219
    Expenditures for deferred acquisition costs               556          323
    Federal income taxes                                      212          209

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

    ----------------------------------------------------------------------------
FOR THE YEAR                                                        
ENDED DECEMBER 31, 2001                                             
      ($ IN MILLIONS)                                         TLA      PRIMERICA
    ----------------------------------------------------------------------------
    Premiums                                               $  957       $1,145
    Net investment income                                   2,530          301
    Interest credited to contractholders                    1,179           --
    Amortization of deferred acquisition costs                171          208
    Total expenditures for deferred acquisition costs         553          298
    Federal income taxes                                      394          236

     The majority of the annuity business and a substantial  portion of the life
     business written by TLA are accounted for as investment contracts, with the
     result that the deposits  collected are reported as liabilities and are not
     included in revenues.  Deposits  represent a statistic integral to managing
     TLA operations,  which management uses for measuring business volumes,  and
     may not be comparable  to similarly  captioned  measurements  used by other
     life insurance  companies.  For the years ended December 31, 2003, 2002 and
     2001, deposits collected amounted to $12.0 billion, $11.9 billion and $13.1
billion, respectively.                                                

     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.                                                  

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

3.   INVESTMENTS                                                                

FIXED MATURITIES                                                                

The amortized cost and fair value of investments in fixed maturities were as    
follows:                                                                        

                                                        [Enlarge/Download Table]

--------------------------------------------------------------------------------------------------------
                                                                    GROSS           GROSS               
DECEMBER 31, 2003                                    AMORTIZED    UNREALIZED       UNREALIZED    FAIR   
($ IN MILLIONS)                                        COST         GAINS           LOSSES       VALUE  
--------------------------------------------------------------------------------------------------------
                                                                                                        
AVAILABLE FOR SALE:                                                                                     

   Mortgage-backed securities - CMOs and                                                                
   pass-through securities                           $ 8,061       $  326            $ 18      $ 8,369  

   U.S. Treasury securities and obligations                                                             
   of U.S. Government and government                                                                    
   agencies and authorities                            2,035           22              12        2,045  

   Obligations of states, municipalities and                                                            
   political subdivisions                                379           21               2          398  

   Debt securities issued by foreign governments         690           51               1          740  

   All other corporate bonds                          23,098        1,507              64       24,541  

   Other debt securities                               5,701          377              22        6,056  

   Redeemable preferred stock                            155           20               1          174  
--------------------------------------------------------------------------------------------------------
      Total Available For Sale                       $40,119       $2,324            $120      $42,323  
--------------------------------------------------------------------------------------------------------

--------------------------------------------------------------------------------------------------------
                                                                    GROSS           GROSS               
DECEMBER 31, 2002                                    AMORTIZED    UNREALIZED       UNREALIZED    FAIR   
($ IN MILLIONS)                                        COST         GAINS           LOSSES       VALUE  
--------------------------------------------------------------------------------------------------------
AVAILABLE FOR SALE:                                                                                     

   Mortgage-backed securities - CMOs and                                                                
   pass-through securities                           $ 6,975       $  434            $  2      $ 7,407  

   U.S. Treasury securities and obligations                                                             
   of U.S. Government and government                                                                    
   agencies and authorities                            2,402           39              19        2,422  

   Obligations of states, municipalities and                                                            
   political subdivisions                                297           22              --               
                                                                                                   319  
   Debt securities issued by foreign governments                                                        
                                                         365           30               2          393  
   All other corporate bonds                          20,894          982             608       21,268  

   Other debt securities                               4,348          229              66        4,511  

   Redeemable preferred stock                            147            1              34          114  
--------------------------------------------------------------------------------------------------------
      Total Available For Sale                       $35,428       $1,737            $731      $36,434  
--------------------------------------------------------------------------------------------------------

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

  Proceeds from sales of fixed maturities classified as available for sale
     were $15.1 billion, $15.5 billion and $14.1 billion in 2003, 2002 and 2001,
  respectively. Gross gains of $476 million, $741 million and $633 million
  and gross losses of $394 million, $309 million and $273 million in 2003,
2002 and 2001, respectively, were realized on those sales. Additional 
 losses of $110 million, $639 million and $153 million in 2003, 2002 and
 2001, respectively, were realized due to other-than-temporary losses in
    value. Impairment activity increased significantly beginning in the fourth
quarter of 2001 and continued throughout 2002. Impairments were       
concentrated in telecommunication and energy company investments.     

   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 is not available amounted to $6.4 
billion and $5.1 billion at December 31, 2003 and 2002, respectively. 

     The amortized cost and fair value of fixed maturities at December 31, 2003,
 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.      

     ---------------------------------------------------------------------------
                                                  AMORTIZED             FAIR
   ($ IN MILLIONS)                                   COST              VALUE
     ---------------------------------------------------------------------------
MATURITY:                                                             
        Due in one year or less                    $ 2,532           $ 2,582
        Due after 1 year through 5 years            11,559            12,188
        Due after 5 years through 10 years           9,866            10,561
        Due after 10 years                           8,101             8,623
     ---------------------------------------------------------------------------
                                                    32,058            33,954
     ---------------------------------------------------------------------------
        Mortgage-backed securities                   8,061             8,369
     ---------------------------------------------------------------------------
            Total Maturity                         $40,119           $42,323
     ---------------------------------------------------------------------------

     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  and last  cash  flow  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,  2003 and  2002,  the  Company  held CMOs  classified  as
     available  for sale with a fair  value of $5.2  billion  and $4.7  billion,
     respectively. Approximately 30% and 35%, respectively, of the Company's CMO
     holdings are fully  collateralized  by GNMA,  FNMA or FHLMC  securities  at
     December 31, 2003 and 2002. In addition,  the Company held $3.0 billion and
     $2.6 billion of GNMA, FNMA or FHLMC mortgage-backed pass-through securities
     at December 31, 2003 and 2002,  respectively.  All of these  securities are
rated AAA.                                                            

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

     The Company  engages in securities  lending  transactions  whereby  certain
     securities  from its portfolio are loaned to other  institutions  for short
     periods of time. The Company  generally  receives cash  collateral from the
     borrower,  equal to at least the market value of the loaned securities plus
     accrued interest,  and invests it in the Company's  short-term money market
     pool (See Note 13). The loaned  securities  remain a recorded  asset of the
     Company,  however,  the Company  records a liability  for the amount of the
     cash  collateral  held,  representing  its  obligation  to return  the cash
     collateral related to these loaned  securities,  and reports that liability
     as part of other liabilities in the consolidated balance sheet. At December
     31, 2003 and 2002,  the Company  held cash  collateral  of $2.4 billion and
$2.8 billion, respectively.                                           

     The Company participates in dollar roll repurchase transactions as a way to
     generate  investment  income.   These  transactions  involve  the  sale  of
     mortgage-backed  securities with the agreement to repurchase  substantially
     the same securities from the same  counterparty.  Cash is received from the
     sale, which is invested in the Company's  short-term money market pool. The
     cash is returned  at the end of the roll  period  when the  mortgage-backed
     securities are repurchased. The Company will generate additional investment
  income based upon the difference between the sale and repurchase prices.

     These transactions are recorded as secured borrowings.  The mortgage-backed
     securities  remain  recorded as assets.  The cash proceeds are reflected in
     short-term  investments  and a  liability  is  established  to reflect  the
     Company's  obligation to repurchase  the  securities at the end of the roll
     period.   The  liability  is  classified  as  other   liabilities   in  the
     consolidated  balance  sheets and  fluctuates  based upon the timing of the
    repayments. The balances were insignificant at December 31, 2003 and 2002.

EQUITY SECURITIES                                                     

The cost and fair values of investments in equity securities were as  
follows:                                                              

     ---------------------------------------------------------------------------
                                        GROSS      GROSS
   EQUITY SECURITIES:                          UNREALIZED  UNREALIZED   FAIR
   ($ IN MILLIONS)                      COST      GAINS      LOSSES    VALUE
     ---------------------------------------------------------------------------

DECEMBER 31, 2003                                                     
      Common stocks                     $109       $27          $2      $134
      Non-redeemable preferred stocks    214        14          --       228
     ---------------------------------------------------------------------------
         Total Equity Securities        $323       $41          $2      $362
     ---------------------------------------------------------------------------

DECEMBER 31, 2002                                                     
      Common stocks                      $48        $8          $6       $50
      Non-redeemable preferred stocks    280         9           7       282
     ---------------------------------------------------------------------------
         Total Equity Securities        $328       $17         $13      $332
     ---------------------------------------------------------------------------

  Proceeds from sales of equity securities were $124 million, $212 million
   and $112 million in 2003, 2002 and 2001, respectively. Gross gains of $23
million, $8 million and $10 million and gross losses of $2 million, $4
     million and $13 million in 2003, 2002 and 2001, respectively, were realized
on those sales. Additional losses of $11 million, $19 million and $96 
million in 2003, 2002 and 2001, respectively, were realized due to    
other-than-temporary losses in value.                                 

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

OTHER-THAN-TEMPORARY LOSSES ON INVESTMENTS                            

     At December 31, 2003, the cost of  approximately  670  investments in fixed
     maturity and equity  securities  exceeded their fair value by $122 million.
     Of the $122 million, $91 million represents fixed maturity investments that
     have been in a gross  unrealized  loss position for less than a year and of
     these 78% are rated investment grade. Fixed maturity  investments that have
     been in a gross  unrealized  loss  position  for a year or more  total  $29
     million and 38% of these are rated  investment  grade. The gross unrealized
loss on equity securities was $2 million at December 31, 2003.        

     Management  has  determined  that the  unrealized  losses on the  Company's
     investments  in fixed  maturity and equity  securities at December 31, 2003
     are  temporary  in nature.  The  Company  conducts a rigorous  review  each
     quarter to identify and evaluate investments that have possible indications
     of  impairment.  An investment in a debt or equity  security is impaired if
     its  fair  value  falls  below  its  cost  and the  decline  is  considered
     other-than-temporary.  Factors considered in determining  whether a loss is
     temporary  include  the  length of time and  extent to which fair value has
     been below cost;  the financial  condition  and near-term  prospects of the
     issuer;  and the Company's  ability and intent to hold the investment for a
     period  of time  sufficient  to allow  for any  anticipated  recovery.  The
Company's review for impairment generally entails:                    

o Identification and evaluation of investments that have possible     
indications of impairment;                                        

     o Analysis of individual investments that have fair values less than 80% of
amortized cost, including consideration of the length of time the 
investment has been in an unrealized loss position;               

  o Discussion of evidential matter, including an evaluation of factors or
     triggers that would or could cause individual investments to qualify as
      having other-than-temporary impairments and those that would not support
other-than-temporary impairment;                                  

o Documentation of the results of these analyses, as required under   
business policies.                                                

     The table below shows the fair value of investments in fixed maturities and
equity securities in an unrealized loss position at December 31, 2003:

                                                        [Enlarge/Download Table]

                                                                     Gross Unrealized Losses                                        
                                                                     -----------------------                                        
                                                            Less Than One Year        One Year or Longer             Total          
                                                       -----------------------------------------------------------------------------
                                                                          Gross                     Gross                    Gross  
                                                            Fair     Unrealized        Fair    Unrealized        Fair   Unrealized  
  ($ IN MILLIONS)                                          Value         Losses       Value        Losses       Value       Losses  
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
  Fixed maturity securities available-for-sale:                                                                                     
  Mortgage-backed securities-CMOs and                                                                                               
     pass-through securities                              $1,182            $18        $ 17           $--      $1,199         $ 18  
  U.S. Treasury securities and obligations of U.S.                                                                                  
     Government and government agencies and authorities    1,180             12          --            --       1,180           12  
  Obligations of states, municipalities and political                                                                               
     subdivisions                                             45              2          --            --          45            2  
  Debt securities issued by foreign governments               55              1          --            --          55            1  
  All other corporate bonds                                1,793             39         503            25       2,296           64  
  Other debt securities                                      755             18          89             3         844           22  
  Redeemable preferred stock                                  12              1          11             1          23            1  
------------------------------------------------------------------------------------------------------------------------------------
  Total fixed maturities                                  $5,022            $91        $620           $29      $5,642         $120  
  Equity securities                                       $   25            $ 1        $  5           $ 1      $   30         $  2  
------------------------------------------------------------------------------------------------------------------------------------

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

MORTGAGE LOANS AND REAL ESTATE                                        

     At December 31, 2003 and 2002, the Company's  mortgage loan and real estate
portfolios consisted of the following:                                

     ---------------------------------------------------------------------------
  ($ IN MILLIONS)                                     2003            2002
     ---------------------------------------------------------------------------

  Current Mortgage Loans                            $1,841          $1,941
  Underperforming Mortgage Loans                        45              44
     ---------------------------------------------------------------------------
       Total Mortgage Loans                          1,886           1,985
     ---------------------------------------------------------------------------

  Real Estate - Foreclosed                              63              17
  Real Estate - Investment                              33              19
     ---------------------------------------------------------------------------
       Total Real Estate                                96              36
     ---------------------------------------------------------------------------
       Total Mortgage Loans and Real Estate         $1,982          $2,021
     ===========================================================================

     Underperforming  mortgage loans include  delinquent  mortgage loans over 90
     days past due,  loans in the process of  foreclosure  and loans modified at
interest rates below market.                                          

     Aggregate  annual  maturities  on mortgage  loans at December  31, 2003 are
     shown below.  Actual  maturities  will differ from  contractual  maturities
     because borrowers may have the right to prepay  obligations with or without
prepayment penalties.                                                 

 -----------------------------------------------------------------------
YEAR ENDING DECEMBER 31,                                              
($ IN MILLIONS)                                                       
 -----------------------------------------------------------------------
2004                                                       $ 173      
2005                                                         107      
2006                                                         347      
2007                                                         131      
2008                                                         141      
Thereafter                                                   987      
 -----------------------------------------------------------------------
Total                                                $1,886 
 =======================================================================

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

TRADING SECURITIES                                                    

     Trading  securities of the Company are held primarily in Tribeca  Citigroup
     Investments  Ltd.  The assets and  liabilities  are valued at fair value as
follows:                                                              

       ($ IN MILLIONS)                     Fair value as of     Fair value as of
       ---------------                     December 31, 2003   December 31, 2002
                                           -----------------   -----------------

ASSETS                                                            
Trading securities                                          
       Convertible bond arbitrage         $1,447              $1,442
       Other                                 260                  89
                                          ------              ------
                                          $1,707              $1,531
                                          ======              ======

LIABILITIES                                                       
Trading securities sold not                                 
yet purchased                                               
       Convertible bond arbitrage           $629                $520
       Other                                   8                  78
                                          ------              ------
                                            $637                $598
                                          ======              ======

     The Company's  trading  portfolio  investments and related  liabilities are
normally held for periods less than six months. See Note 11.          

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

OTHER INVESTED ASSETS                                                 

Other invested assets are composed of the following:                  

    --------------------------------------------------------------------------
   ($ IN MILLIONS)                                       2003           2002
    --------------------------------------------------------------------------
  Investment in Citigroup Preferred Stock            $3,212         $3,212
  Private equity and arbitrage investments            1,315          1,006
  Real estate investments                               327            390
  Derivatives                                           182            263
  Other                                                  56             38
    --------------------------------------------------------------------------
  Total                                              $5,092         $4,909
    --------------------------------------------------------------------------

CONCENTRATIONS                                                        

     At December 31, 2003 and 2002,  the Company had an  investment in Citigroup
Preferred Stock of $3.2 billion. See Note 13.                         

     The Company both maintains and participates in a short-term investment pool
for its insurance affiliates. See Note 13.                            

     The Company had  concentrations of investments,  excluding those in federal
     and government  agencies,  primarily fixed maturities at fair value, in the
following industries:                                                 

    --------------------------------------------------------------------------
  ($ IN MILLIONS)                                      2003           2002
    --------------------------------------------------------------------------
  Finance                                            $5,056         $3,681
  Electric Utilities                                  3,552          3,979
  Banking                                             2,830          1,900
    --------------------------------------------------------------------------

     The  Company  held  investments  in  foreign  banks in the amount of $1,018
     million and $869 million at December 31, 2003 and 2002, respectively, which
     are included in the table above.  The Company defines its below  investment
     grade assets as those securities rated Ba1 by Moody's Investor Services (or
     its equivalent) 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. Below
     investment  grade assets  included in the categories of the preceding table
     include $1,118  million and $878 million in Electric  Utilities at December
     31, 2003 and 2002,  respectively.  Below investment grade assets in Finance
     and Banking were  insignificant  at December 31, 2003 and 2002. Total below
     investment  grade assets were $5.2 billion and $3.8 billion at December 31,
2003 and 2002, respectively.                                          

Included in mortgage loans were the following group concentrations:   

    --------------------------------------------------------------------------
  ($ IN MILLIONS)                                      2003           2002
    --------------------------------------------------------------------------
STATE                                                                 
  California                                           $732           $788

PROPERTY TYPE                                                         
  Agricultural                                       $1,025         $1,212
    --------------------------------------------------------------------------

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

     The Company monitors  creditworthiness  of  counterparties to all financial
     instruments by using controls that include credit approvals,  credit 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  amounted  to $104.4  million  and $58.5  million  at
December 31, 2003 and 2002, respectively.                             

RESTRUCTURED INVESTMENTS                                              

     The Company had mortgage loans and debt securities  that were  restructured
     at below market  terms at December  31, 2003 and 2002.  The balances of the
     restructured investments were insignificant.  The new terms typically defer
     a portion of contract  interest  payments to varying future periods.  Gross
     interest  income on  restructured  assets that would have been  recorded in
     accordance with the original terms of such loans was insignificant in 2003,
     2002 and 2001. Interest on these assets, included in net investment income,
was also insignificant in 2003, 2002 and 2001.                        

NET INVESTMENT INCOME                                                 

     ---------------------------------------------------------------------------
   FOR THE YEAR ENDED DECEMBER 31,          2003          2002          2001
($ IN MILLIONS)                                                       
     ---------------------------------------------------------------------------

GROSS INVESTMENT INCOME                                               
       Fixed maturities                 $2,465        $2,359        $2,328
       Mortgage loans                      158           167           210
       Trading                             222             9           131
       Other invested assets                58           203            71
       Citigroup Preferred Stock           203           178            53
       Other, including policy loans        82           104           165
     ---------------------------------------------------------------------------
  Total gross investment income          3,188         3,020         2,958
     ---------------------------------------------------------------------------
  Investment expenses                      130            84           127
     ---------------------------------------------------------------------------
  Net Investment Income                 $3,058        $2,936        $2,831
     ---------------------------------------------------------------------------

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

REALIZED AND UNREALIZED INVESTMENT GAINS (LOSSES)                     

 Net realized investment gains (losses) for the periods were as follows:

     ---------------------------------------------------------------------------
  FOR THE YEAR ENDED DECEMBER 31,                  2003      2002     2001
($ IN MILLIONS)                                                       
     ---------------------------------------------------------------------------

REALIZED INVESTMENT GAINS (LOSSES)                                    
      Fixed maturities                              $(28)    $(207)     $207
       Equity securities                               10       (15)      (99)
      Mortgage loans                                 (14)       --         5
      Real estate held for sale                        1         8         3
      Other invested assets                           49       (19)       --
      Derivatives                                     20       (87)       14
       Other                                           (1)       (2)       (5)
     ---------------------------------------------------------------------------
         Total realized investment gains (losses)    $37     $(322)     $125
     ---------------------------------------------------------------------------

     Changes in net  unrealized  investment  gains (losses) that are reported in
    accumulated other changes in equity from nonowner sources were as follows:

     ---------------------------------------------------------------------------
    FOR THE YEAR ENDED DECEMBER 31,                     2003     2002     2001
($ IN MILLIONS)                                                       
     ---------------------------------------------------------------------------

UNREALIZED INVESTMENT GAINS (LOSSES)                                  
       Fixed maturities                               $1,198   $  664   $   85
       Equity securities                                  35        3       40
        Other                                               6       31      (20)
     ---------------------------------------------------------------------------
          Total unrealized investment gains (losses)   1,239      698      105
     ---------------------------------------------------------------------------
       Related taxes                                     421      243       37
     ---------------------------------------------------------------------------
       Change in unrealized investment gains (losses)    818      455       68
       Balance beginning of year                         626      171      103
     ---------------------------------------------------------------------------
          Balance end of year                         $1,444   $  626   $  171
     ---------------------------------------------------------------------------

VARIABLE INTEREST ENTITIES                                            

     In January  2003,  the FASB  released FIN 46,  which  changes the method of
     determining whether certain entities,  including  securitization  entities,
should be included in the Company's consolidated financial statements.

     The  implementation  of FIN 46 encompassed a review of numerous entities to
     determine  the impact of adoption  and  considerable  judgment  was used in
     evaluating  whether or not a VIE should be consolidated.  In December 2003,
     the FASB  released a revision  of FIN 46 (FIN 46-R or the  interpretation),
     which includes  substantial  changes from the original.  The calculation of
     expected  losses and  expected  residual  returns have both been altered to
     reduce the impact of decision maker and guarantor  fees in the  calculation
     of expected  residual  returns and expected losses.  In addition,  FIN 46-R
     changes the definition of a variable interest.  The interpretation  permits
     adoption of either the original or the revised versions of FIN 46 until the
     first  quarter of 2004,  at which time FIN 46-R must be  adopted.  For 2003
     year-end, the Company's consolidated financial statements are in accordance
     with the original.  (See  "Consolidation of Variable Interest  Entities" in
the "Accounting Changes" section of Note 1.)                          

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     The following table represents the carrying amounts and  classification  of
     consolidated assets that are collateral for VIE obligations.  The assets in
     this table represent two investment  vehicles that the Company was involved
     with prior to February 1, 2003.  These two VIEs are a  collateralized  debt
obligation and a real estate joint venture:                           

$ IN MILLIONS                              DECEMBER 31, 2003
   ---------------------------------------------------------------
Investments                                       $ 400   
Cash                                                 11   
Other                                                 4   
                                       ---------------------------
Total assets of consolidated VIEs                 $ 415   
   ---------------------------------------------------------------

     The debt  holders  of these  VIEs  have no  recourse  to the  Company.  The
     Company's  maximum  exposure  to  loss  is  limited  to its  investment  of
     approximately $8 million.  The Company regularly becomes involved with VIEs
     through its investment activities. This involvement is generally restricted
to small passive debt and equity investments.                         

4.   REINSURANCE                                                      

     Reinsurance  is used 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 (YRT),  coinsurance
     and modified coinsurance.  Reinsurance involves credit risk and the Company
     monitors the financial  condition of these  reinsurers on an ongoing basis.
     The Company  remains  primarily  liable as the direct  insurer on all risks
reinsured.                                                            

     Since 1997 the majority of universal life business has been reinsured under
     an 80%/20% YRT quota share  reinsurance  program and term life business has
     been  reinsured  under a  90%/10%  YRT  quota  share  reinsurance  program.
     Beginning  in  September  2002,  newly  issued term life  business has been
     reinsured  under a 90%/10%  coinsurance  quota share  reinsurance  program.
     Maximum  retention  of $2.5  million is  generally  reached on  policies in
     excess of $12.5  million  for  universal  life and $25.0  million  for term
     insurance. 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 $2.5 million.
     Total in-force business ceded under reinsurance contracts is $356.3 billion
and $321.9 billion at December 31, 2003 and 2002, respectively.       

     Effective  July 1, 2000 the Company  sold 90% of its  individual  long-term
     care insurance  business to General Electric Capital  Assurance Company and
     its subsidiary in the form of indemnity reinsurance  arrangements.  Written
     premiums ceded per these  arrangements were $226.8 million,  $231.8 million
     and  $233.3  million  in 2003,  2002 and  2001,  respectively,  and  earned
     premiums  ceded were $226.7  million,  $233.8 million and $240.1 million in
2003, 2002 and 2001, respectively.                                    

     On  January 3,  1995,  the  Company  sold its group  life  business  to The
     Metropolitan  Life  Insurance  Company  (MetLife)  under  the  form  of  an
     indemnity insurance arrangement.  Premiums written and earned in 2003, 2002
and 2001 were insignificant.                                          

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     Prior to April 1, 2001, the Company also reinsured substantially all of the
     guaranteed  minimum death benefit (GMDB) on its variable  annuity  product.
     Total variable  annuity account  balances with GMDB were $23.5 billion,  of
     which $12.9  billion,  or 55%, was reinsured,  and $19.1 billion,  of which
     $12.4  billion,  or 65%,  was  reinsured  at  December  31,  2003 and 2002,
     respectively. GMDB is payable upon the death of a contractholder.  When the
     benefit payable is greater than the account value of the variable  annuity,
     the  difference  is called the net amount at risk  (NAR).  NAR totals  $1.7
     billion,  of which $1.4 billion,  or 81%, is reinsured and $4.6 billion, of
     which $3.8  billion,  or 82%, is  reinsured  at December 31, 2003 and 2002,
respectively.                                                         

     TIC writes  workers'  compensation  business.  This  business is  reinsured
     through a 100% quota-share  agreement with The Travelers Indemnity Company,
an insurance subsidiary of TPC.                                       

     A summary of reinsurance  financial data reflected  within the consolidated
     statements of income and balance sheets is presented below ($ in millions):

                                           FOR THE YEARS ENDING DECEMBER 31,
   WRITTEN PREMIUMS                         2003          2002          2001
     ---------------------------------------------------------------------------

   Direct                                 $2,979        $2,610        $2,848
   Assumed                                     1            --             1
Ceded to:                                                             
       The Travelers Indemnity Company          2           (83)         (146)
       Other companies                       (638)         (614)         (591)
     ---------------------------------------------------------------------------
   Total Net Written Premiums             $2,344        $1,913        $2,112
     ===========================================================================

   EARNED PREMIUMS                          2003          2002          2001
     ---------------------------------------------------------------------------

   Direct                                 $3,001        $2,652        $2,879
   Assumed                                     1            --             1
Ceded to:                                                             
       The Travelers Indemnity Company        (21)         (109)         (180)
       Other companies                       (654)         (619)         (598)
     ---------------------------------------------------------------------------
   Total Net Earned Premiums              $2,327        $1,924        $2,102
     ===========================================================================

  The Travelers Indemnity Company was an affiliate in 2001 and for part of
2002. See Note 14.                                                    

Reinsurance recoverables at December 31, 2003 and 2002 include amounts
    recoverable on unpaid and paid losses and were as follows ($ in millions):

REINSURANCE RECOVERABLES                2003         2002             
-----------------------------------------------------------           
Life and accident and health business $2,885       $2,589             
Property-casualty business:                                           
The Travelers Indemnity Company   1,585        1,712        
-----------------------------------------------------------           
Total Reinsurance Recoverables        $4,470       $4,301             
===========================================================           

     Reinsurance  recoverables  for the life and  accident  and health  business
     include  $1,617  million and $1,351  million at December 31, 2003 and 2002,
     respectively,  from General  Electric  Capital  Assurance  Company.  Assets
     collateralizing  these  receivables  are held in trust for the  purpose  of
paying Company claims.                                                

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     Reinsurance  recoverables  also  include  $435  million and $472 million at
December 31, 2003 and 2002, respectively, from MetLife.               

5.   INTANGIBLE ASSETS                                                

     The  Company's  intangible  assets  are  DAC,  goodwill  and the  value  of
     insurance  in  force.   DAC  and  the  value  of  insurance  in  force  are
amortizable. The following is a summary of capitalized DAC by type.   

                       Deferred &            Traditional
                      Payout      UL &      Life &
   In millions of dollars         Annuities    COLI      Other         Total
     ---------------------------------------------------------------------------
   Balance January 1, 2002         $1,137      $430        $1,894     $3,461

   Deferred expenses & other          347       172           349        868
    Amortization expense              (142)      (24)         (238)      (404)
Underlying lapse and                                                  
     interest rate adjustment          22        --            --         22
Amortization related to SFAS                                          
      91 reassessment                  (11)       --            --        (11)
                                   ---------------------------------------------
   Balance December 31, 2002        1,353       578         2,005      3,936

   Deferred expenses & other          340       221           399        960
    Amortization expense              (212)      (33)         (256)      (501)
                                   ---------------------------------------------
   Balance December 31, 2003       $1,481      $766        $2,148     $4,395
     ---------------------------------------------------------------------------

     The value of  insurance  in force  totaled $112 million and $130 million at
     December 31, 2003 and 2002, respectively,  and is included in other assets.
     Amortization  expense on the value of  insurance  in force was $18 million,
     $25 million and $26 million for the year ended December 31, 2003,  2002 and
     2001, respectively.  Amortization expense related to the value of insurance
     in force is estimated to be $18 million in 2004,  $17 million in 2005,  $14
     million in 2006,  $12 million in 2007 and $8 million in 2008. In 2002 there
     was an opening balance sheet reclassification  between DAC and the value of
     insurance  in force in the  amount  of $11  million.  This had no impact on
results of operations or shareholder's equity.                        

     The Company stopped  amortizing  goodwill on January 1, 2002.  During 2001,
     the Company reversed $8 million of negative  goodwill.  Net income adjusted
     to exclude the impact of goodwill  amortization for the year ended December
31, 2001 is as follows:                                               

                              Year Ended
($ IN MILLIONS)                            December 31, 2001        
                                   -----------------
Net income:                                                           
Reported net income                          $1,272           
Negative goodwill reversal                       (8)          
Goodwill amortization                             7           
                                  ------
Adjusted net income                          $1,271           
                                  ======

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6.   DEPOSIT FUNDS AND RESERVES                                       

     At  December  31, 2003 and 2002,  the  Company had $43.5  billion and $38.8
     billion,  respectively,  of life and annuity deposit funds and reserves. Of
     that total, $24.7 billion and $21.8 billion is not subject to discretionary
     withdrawal  based on contract terms.  The remaining $18.8 billion and $17.0
     billion is for life and annuity  products that are subject to discretionary
     withdrawal by the contractholder.  Included in the amounts that are subject
     to discretionary withdrawal is $7.0 billion and $5.7 billion of liabilities
     that are surrenderable with market value adjustments.  Also included are an
     additional  $6.1 billion and $5.5 billion of life  insurance and individual
     annuity  liabilities  which are subject to discretionary  withdrawals,  and
     have an average  surrender  charge of 5.0% and 4.7%,  respectively.  In the
     payout phase,  these funds are credited at  significantly  reduced interest
     rates.  The  remaining  $5.7  billion and $5.8 billion of  liabilities  are
     surrenderable  without  charge.  Approximately  10.0%  of these  relate  to
     individual life products for each of 2003 and 2002.  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.                                                               

     Included in  contractholder  funds and in the preceding  paragraph are GICs
     totaling $14.4 billion.  The scheduled maturities for these GICs, including
     interest,  are $4.808  billion,  $1.333  billion,  $1.665  billion,  $1.182
     billion,  $1.149 billion and $2.415 billion in 2004, 2005, 2006, 2007, 2008
     and thereafter,  respectively.  These GICs have a weighted average interest
rate of 4.07% at December 31, 2003.                                   

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7.   FEDERAL INCOME TAXES                                             

EFFECTIVE TAX RATE                                                    
($ IN MILLIONS)                                                       

     ---------------------------------------------------------------------------
  FOR THE YEAR ENDED DECEMBER 31,        2003           2002          2001
     ---------------------------------------------------------------------------
  Income before federal income taxes   $1,829         $1,503        $1,911
   Statutory tax rate                       35%            35%           35%
     ---------------------------------------------------------------------------
  Expected federal income taxes           640            526           669
Tax effect of:                                                        
        Non-taxable investment income      (91)           (62)          (20)
        Tax reserve release                (79)           (43)          (18)
        Other, net                           1             --            (1)
     ---------------------------------------------------------------------------
  Federal income taxes                 $  471         $  421        $  630
     ===========================================================================
   Effective tax rate                       26%            28%           33%
     ---------------------------------------------------------------------------

COMPOSITION OF FEDERAL INCOME TAXES                                   
Current:                                                              
       United States                     $330           $217          $424
       Foreign                             30             19            47
     ---------------------------------------------------------------------------
       Total                              360            236           471
     ---------------------------------------------------------------------------
Deferred:                                                             
       United States                      108            182           166
        Foreign                              3              3            (7)
     ---------------------------------------------------------------------------
       Total                              111            185           159
     ---------------------------------------------------------------------------
  Federal income taxes                   $471           $421          $630
     ===========================================================================

     Additional  tax benefits  (expense)  attributable  to employee  stock plans
     allocated directly to shareholder's equity for the years ended December 31,
     2003,  2002  and 2001  were $3  million,  $(17)  million  and $21  million,
respectively.                                                         

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     The net deferred tax  liability at December 31, 2003 and 2002 was comprised
     of the tax effects of temporary differences related to the following assets
and liabilities:                                                      

     ---------------------------------------------------------------------------
 ($ IN MILLIONS)                                   2003             2002
     ---------------------------------------------------------------------------

Deferred Tax Assets:                                                  
     Benefit, reinsurance and other reserves     $   574          $    422
     Operating lease reserves                         52                57
     Employee benefits                               201               199
     Other                                           392               289
     ---------------------------------------------------------------------------
        Total                                      1,219               967
     ---------------------------------------------------------------------------

Deferred Tax Liabilities:                                             
Deferred acquisition costs and value                            
       of insurance in force                      (1,225)          (1,097)
     Investments, net                             (1,795)          (1,180)
     Other                                          (229)            (138)
     ---------------------------------------------------------------------------
        Total                                     (3,249)          (2,415)
     ---------------------------------------------------------------------------
  Net Deferred Tax Liability                     $(2,030)         $(1,448)
     ---------------------------------------------------------------------------

     The Company and its  subsidiaries  file a  consolidated  federal income tax
     return with Citigroup. Federal income taxes are allocated to each member of
     the  consolidated  group,   according  to  a  Tax  Sharing  Agreement  (the
     Agreement),  on a separate  return  basis  adjusted  for  credits and other
amounts required by the Agreement.                                    

     TIC had $52 million and $156  million  payable to Citigroup at December 31,
2003 and 2002, respectively, related to the Agreement.                

    At December 31, 2003 and 2002, the Company had no ordinary or capital loss
carryforwards.                                                        

     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  currently
     contemplated from this account. At current rates the maximum amount of such
tax would be approximately $326 million.                              

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8.   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 $1,104 million,  $256 million and $330
     million for the years ended December 31, 2003, 2002 and 2001, respectively.
     The  Company's  statutory  capital and  surplus  was $7.6  billion and $6.9
billion at December 31, 2003 and 2002, respectively.                  

     Effective  January 1, 2001, the Company began preparing its statutory basis
     financial  statements  in  accordance  with  the  National  Association  of
     Insurance  Commissioners'  ACCOUNTING  PRACTICES  AND  PROCEDURES  MANUAL -
     VERSION EFFECTIVE JANUARY 1, 2001, subject to any deviations  prescribed or
     permitted  by  its  domicilary   insurance   commissioners  (see  Permitted
     Statutory Accounting Practices in Note 1). The impact of this change on the
     Company's statutory capital and surplus was not significant.  The impact of
     this change on statutory  net income was $119  million in 2001,  related to
     recording equity method investment  earnings as unrealized gains versus net
investment income.                                                    

     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.  A maximum of
     $845 million is  available  by the end of the year 2004 for such  dividends
     without prior  approval of the State of Connecticut  Insurance  Department,
     depending  upon the amount and timing of the payments.  In accordance  with
     the  Connecticut  statute,   TLAC,  after  reducing  its  unassigned  funds
     (surplus) by 25% of the change in net unrealized capital gains, may not pay
     dividends  during 2004 without prior  approval of the State of  Connecticut
     Insurance  Department.  Primerica may pay up to $242 million to TIC in 2004
     without  prior  approval of the  Commonwealth  of  Massachusetts  Insurance
     Department.  The Company paid  dividends of $545 million,  $586 million and
$472 million in 2003, 2002 and 2001, respectively.                    

     In connection with the TPC IPO and distribution,  the Company's  additional
paid-in capital increased $1,596 million during 2002 as follows:      

($ IN MILLIONS)                                                       
Citigroup Series YYY Preferred Stock            $ 2,225               
TLA Holdings LLC                                    142               
Cash and other assets                               189               
Pension, postretirement, and post-                                    
employment benefits payable                     (279)           
Deferred tax assets                                  98               
Deferred tax liabilities                           (779)              
                                 -------
                                 $ 1,596
                                 =======
See Note 14.                                                          

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 (CONTINUED)

8.   SHAREHOLDER'S EQUITY                                                       

ACCUMULATED OTHER CHANGES IN EQUITY FROM NONOWNER SOURCES, NET OF TAX           

Changes in each component of Accumulated Other Changes in Equity from Nonowner  
Sources were as follows:                                                        

                                                        [Enlarge/Download Table]

                                                  NET UNREALIZED                                             ACCUMULATED        
                                                  GAIN/LOSS        FOREIGN CURRENCY     DERIVATIVE           OTHER CHANGES IN   
($ IN MILLIONS)                                   ON INVESTMENT    TRANSLATION          INSTRUMENTS AND      EQUITY FROM        
                                                  SECURITIES       ADJUSTMENTS          HEDGING ACTIVITIES   NONOWNER SOURCES   
--------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                
BALANCE, JANUARY 1, 2001                             $   104              $--                 $  --              $  104         
Cumulative effect of change in accounting                                                                                       
   for derivative instruments and hedging                                                                                       
   activities, net of tax of $(16)                        14               --                   (43)                (29)        
Unrealized gains on investment securities,                                                                                      
   net of tax of $74                                     138               --                    --                 138         
Less: Reclassification adjustment for gains                                                                                     
   included in net income, net of tax of $(38)           (70)              --                    --                 (70)        
Foreign currency translation adjustment, net                                                                                    
   of tax of $(2)                                         --               (3)                   --                  (3)        
Less: Derivative instrument hedging activity                                                                                    
   losses, net of tax of $(35)                            --               --                   (66)                (66)        
--------------------------------------------------------------------------------------------------------------------------------
PERIOD CHANGE                                             82               (3)                 (109)                (30)        
--------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2001                               186               (3)                 (109)                 74         
Unrealized gains on investment securities,                                                                                      
   net of tax of $167                                    311               --                    --                 311         
Add: Reclassification adjustment for losses                                                                                     
   included in net income, net of tax of $78             144               --                    --                 144         
Foreign currency translation adjustment, net                                                                                    
  of tax of $2                                            --                3                    --                   3         
Less: Derivative instrument hedging activity                                                                                    
   losses,  net of tax of $(42)                           --               --                   (78)                (78)        
--------------------------------------------------------------------------------------------------------------------------------
PERIOD CHANGE                                            455                3                   (78)                380         
--------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2002                               641               --                  (187)                454         
--------------------------------------------------------------------------------------------------------------------------------
Unrealized gains on investment securities,                                                                                      
   net of tax of $407                                    793               --                    --                 793         
Add: Reclassification adjustment for losses                                                                                     
   included in net income, net of tax of $13              25               --                    --                  25         
Foreign currency translation adjustment, net                                                                                    
   of tax of $3                                           --                4                    --                   4         
Add: Derivative instrument hedging activity                                                                                     
   gains, net of tax of $46                               --               --                    84                  84         
--------------------------------------------------------------------------------------------------------------------------------
PERIOD CHANGE                                            818                4                    84                 906         
--------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 2003                           $ 1,459              $ 4                 $(103)             $1,360         
--------------------------------------------------------------------------------------------------------------------------------

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

9.   BENEFIT PLANS                                                              

PENSION AND OTHER POSTRETIREMENT BENEFITS                                       

The Company participates in a qualified, noncontributory defined benefit pension
plan sponsored by Citigroup. The Company's share of the expense related to this 
plan was insignificant in 2003, 2002 and 2001.                                  

The Company also participates in a non-qualified, noncontributory defined       
benefit pension plan sponsored by Citigroup. During 2002, the Company assumed   
TPC's share of the non-qualified pension plan related to inactive employees of  
the former Travelers Insurance entities as part of the TPC spin-off. The        
Company's share of net expense for this plan was $5 million in 2003, $10 million
in 2002, and insignificant in 2001.                                             

In addition, the Company provides certain other postretirement benefits to      
retired employees through a plan sponsored by Citigroup. The Company assumed    
TPC's share of the postretirement benefits related to inactive employees of the 
former Travelers Insurance entities during 2002 as part of the TPC spin-off. The
Company's share of net expense for the other postretirement benefit plans was   
$28 million in 2003, $18 million in 2002 and not significant for 2001.          

401(k) SAVINGS PLAN                                                             

Substantially all of the Company's employees are eligible to participate in a   
401(k) savings plan sponsored by Citigroup. The Company's expenses in connection
with the 401(k) savings plan were not significant in 2003, 2002 and 2001. See   
Note 13.                                                                        

10.  LEASES                                                                     

Most leasing functions for the Company are administered by a Citigroup          
subsidiary. Net rent expense for the Company was $21 million, $24 million, and  
$26 million in 2003, 2002 and 2001, respectively.                               

--------------------------------------------------------------------------------
YEAR ENDING DECEMBER 31,           MINIMUM OPERATING         MINIMUM CAPITAL
($ IN MILLIONS)                     RENTAL PAYMENTS          RENTAL PAYMENTS
--------------------------------------------------------------------------------
2004                                     $ 47                      $ 5      
2005                                       52                        5      
2006                                       58                        5      
2007                                       58                        6      
2008                                       58                        6      
Thereafter                                 83                       18      
--------------------------------------------------------------------------------
Total Rental Payments                    $355                      $45      
================================================================================

Future sublease rental income of approximately $60 million will partially offset
these commitments. Also, the Company will be reimbursed for 50%, totaling $135  
million through 2011, of the rental expense for a particular lease by an        
affiliate.                                                                      

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11.  DERIVATIVE FINANCIAL INSTRUMENTS AND FAIR VALUE OF FINANCIAL INSTRUMENTS   

DERIVATIVE FINANCIAL INSTRUMENTS                                                

The Company uses derivative financial instruments, including financial futures  
contracts, swaps, options and forward contracts, as a means of hedging exposure 
to interest rate changes, equity price changes, credit and foreign currency     
risk. The Company also uses derivative financial instruments to enhance         
portfolio income and replicate cash market investments. The Company, through    
Tribeca Citigroup Investments Ltd., holds and issues derivative instruments in  
conjunction with these investment strategies.                                   

The Company uses exchange traded financial futures contracts to manage its      
exposure to changes in interest rates that 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. Futures  
contracts are commitments to buy or sell at a future date a financial           
instrument, at a contracted price, and may be settled in cash or through        
delivery.                                                                       

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.        

Currency option contracts are used on an ongoing basis to hedge the Company's   
exposure to foreign currency exchange rates that result from the Company's      
direct foreign currency investments. To hedge against adverse changes in        
exchange rates, the Company enters into contracts that give it the right, but   
not the obligation, to sell the foreign currency within a limited time at a     
contracted price that may also be settled in cash, based on differentials in the
foreign exchange rate. These contracts cannot be settled prior to maturity.     

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 upon 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.                                                                       

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 a corresponding liability originated in a foreign
currency. Under currency swaps, the Company agrees with other parties to        
exchange, at specified intervals, foreign currency for U.S. Dollars. Generally, 
there is an exchange of foreign currency for U.S. Dollars at the outset of the  
contract based upon prevailing foreign exchange rates. Swap agreements are not  
exchange traded so they are subject to the risk of default by the counterparty. 

Forward contracts are used on an ongoing basis to hedge the Company's exposure  
to foreign currency exchange rates that result from the net investment in the   
Company's Canadian operations as well as direct                                 

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foreign currency investments. To hedge against adverse changes in exchange      
rates, the Company enters into contracts to exchange foreign currency for U.S.  
Dollars with major financial institutions. These contracts cannot be settled    
prior to maturity. At the maturity date the Company must purchase the foreign   
currency necessary to settle the contracts.                                     

The Company enters into credit default swaps in conjunction with a fixed income 
investment to reproduce the investment characteristics of a different           
investment. The Company will also enter credit default swaps to reduce exposure 
to certain corporate debt security investment exposures that it holds. Under    
credit default swaps, the Company agrees with other parties to receive or pay,  
at specified intervals, fixed or floating rate interest amounts calculated by   
reference to an agreed notional principal amount in exchange for the credit     
default risk of a specified bond. Swap agreements are not exchange traded so    
they are subject to the risk of default by the counterparty.                    

Several of the Company's hedging strategies do not qualify or are not designated
as hedges for accounting purposes. This can occur when the hedged item is       
carried at fair value with changes in fair value recorded in earnings, the      
derivative contracts are used in a macro hedging strategy, the hedge is not     
expected to be highly effective, or structuring the hedge to qualify for hedge  
accounting is too costly or time consuming.                                     

The Company monitors the 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,  
credit limits and other monitoring procedures. Additionally, the Company enters 
into collateral agreements with its derivative counterparties. As of December   
31, 2003, the Company held collateral under these contracts amounting to        
approximately $96.9 million.                                                    

The following table summarizes certain information related to the Company's     
hedging activities for the years ended December 31, 2003 and 2002:              

                                Year Ended          Year Ended
    In millions of dollars             December 31, 2003   December 31, 2002
      --------------------------------------------------------------------------
Hedge ineffectiveness recognized                                    
    related to fair value hedges          $(23.2)            $(18.3)

Hedge ineffectiveness recognized                                    
   related to cash flow hedges             (3.4)              14.8

Net loss recorded in accumulated                                    
other changes in equity from                                
nonowner sources related to                                 
    net investment hedges                  (33.6)              (8.4)

Net loss from economic                                              
    hedges recognized in earnings           (1.6)             (32.8)

During the year ended December 31, 2002 the Company recorded a gain of $.3      
million from discontinued forecasted transactions. During the year ended        
December 31, 2003 there were no discontinued forecasted transactions. The amount
expected to be reclassified from accumulated other changes in equity from       
nonowner sources into pre-tax earnings within twelve months from December 31,   
2003 is $(90.4) million.                                                        

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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 and joint         
ventures. All of these commitments are to unaffiliated entities. The off-balance
sheet risk of fixed and variable rate loan commitments was $253.5 million and   
$240.9 million at December 31, 2003 and 2002, respectively. The Company had     
unfunded commitments of $527.8 million and $630.0 million to these partnerships 
at December 31, 2003 and 2002, respectively.                                    

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 SFAS No. 107, "Disclosure 
about Fair Value of Financial Instruments," and therefore are not included in   
the amounts discussed.                                                          

At December 31, 2003 and 2002, investments in fixed maturities had a carrying   
value and a fair value of $42.3 billion and $36.4 billion, respectively. See    
Notes 1 and 3.                                                                  

At December 31, 2003, mortgage loans had a carrying value of $1.9 billion and a 
fair value of $2.0 billion and at year-end 2002 had a carrying value of $2.0    
billion and a fair value of $2.2 billion. In estimating fair value, the Company 
used interest rates reflecting the current real estate financing market.        

Included in other invested assets are 2,225 shares of Citigroup Cumulative      
Preferred Stock Series YYY, carried at cost of $2,225 million at December 31,   
2003 and 2002, acquired as a contribution from TPC. This Series YYY Preferred   
Stock pays cumulative dividends at 6.767%, has a liquidation value of $1 million
per share and has perpetual duration, is not subject to a sinking fund or       
mandatory redemption but may be optionally redeemed by Citigroup at any time on 
or after February 27, 2022. Dividends totaling $151 million and $125 million    
were received in 2003 and 2002, respectively. There is no established market for
this investment and it is not practicable to estimate the fair value of the     
preferred stock.                                                                

Included in other invested assets are 987 shares of Citigroup Cumulative        
Preferred Stock Series YY, carried at cost of $987 million at December 31, 2003 
and 2002. This Series YY Preferred Stock pays cumulative dividends at 5.321%,   
has a liquidation value of $1 million per share, and has perpetual duration, is 
not subject to a sinking fund or mandatory redemption but may be optionally     
redeemed by Citigroup at any time on or after December 22, 2018. Dividends      
totaling $53 million were received during each of 2003, 2002 and 2001. There is 
no established market for this investment and it is not practicable to estimate 
the fair value of the preferred stock.                                          

At December 31, 2003, contractholder funds with defined maturities had a        
carrying value of $13.5 billion and a fair value of $13.7 billion, compared with
a carrying value and a fair value of $12.5 billion and $13.3 billion at December
31, 2002. 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 $13.1 billion and a fair value of $12.8      
billion at December 31, 2003, compared with a carrying value of $11.1 billion   
and a fair value of $10.7 billion at December 31, 2002. These contracts         
generally are valued at surrender value.                                        

The carrying values of $698 million and $321 million of financial instruments   
classified as other assets approximated their fair values at December 31, 2003  
and 2002, respectively. The carrying value of $2.5 billion and $1.5 billion of  
financial instruments classified as other liabilities at December 31, 2003 and  
2002                                                                            

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 (CONTINUED)

also approximated their fair values at both December 31, 2003 and 2002. Fair    
value is determined using various methods, including discounted cash flows, as  
appropriate for the various financial instruments.                              

Both the assets and liabilities of separate accounts providing a guaranteed     
return had a carrying value and a fair value of $350 million at December 31,    
2003, compared with a carrying value and a fair value of $511 million at        
December 31, 2002.                                                              

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.                                                               

12.  COMMITMENTS AND CONTINGENCIES                                              

LITIGATION                                                                      

In 2003, several issues in the mutual fund and variable insurance product       
industries have come under the scrutiny of federal and state regulators. Like   
many other companies in our industry, the Company has received a request for    
information from the Securities and Exchange Commission (SEC) and a subpoena    
from the New York Attorney General regarding market timing and late trading. In 
March 2004 the SEC requested additional information about the Company's variable
product operations on market timing, late trading and revenue sharing. The      
Company is cooperating fully with all of these reviews and is not able to       
predict their outcomes.                                                         

The Company is a defendant or co-defendant in various litigation matters in the 
normal course of business. These include civil actions, arbitration proceedings 
and other matters arising in the normal course of business out of activities as 
an insurance company, a broker and dealer in securities or otherwise. In the    
opinion of the Company's management, the ultimate resolution of these legal     
proceedings would not be likely to have a material adverse effect on the        
Company's consolidated results of operations, financial condition or liquidity. 

OTHER                                                                           

The Company is a member of the Federal Home Loan Bank of Boston (the Bank), and 
in this capacity has entered into a funding agreement (the agreement) with the  
Bank where a blanket lien has been granted to collateralize the Bank's deposits.
The Company maintains control of these assets, and may use, commingle, encumber 
or dispose of any portion of the collateral as long as there is no event of     
default and the remaining qualified collateral is sufficient to satisfy the     
collateral maintenance level. The agreement further states that upon any event  
of default, the Bank's recovery is limited to the amount of the member's        
outstanding funding agreement. The amount of the Company's liability for funding
agreements with the Bank as of December 31, 2003 is $1 billion, included in     
contractholder funds. The Company holds $50 million of common stock of the Bank,
included in equity securities.                                                  

The Company has provided a guarantee on behalf of Citicorp International Life   
Insurance Company, Ltd. (CILIC), an affiliate. The Company has guaranteed to pay
claims up to $1 billion of life insurance coverage for CILIC. This guarantee    
takes effect if CILIC cannot pay claims because of insolvency, liquidation or   
rehabilitation. Life insurance coverage in force under this guarantee at        
December 31, 2003 is $61 million. The Company does not hold any collateral      
related to this guarantee.                                                      

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

13.  RELATED PARTY TRANSACTIONS                                                 

Citigroup and certain of its subsidiaries provide investment management and     
accounting services, payroll, internal auditing, benefit management and         
administration, property management and investment technology services to the   
Company as of December 31, 2003. At December 31, 2001 the majority of these     
services were provided by either Citigroup and its subsidiaries or TPC. The     
Company paid Citigroup and its subsidiaries $55.3 million, $56.9 million and    
$43.6 million in 2003, 2002 and 2001, respectively, for these services. The     
Company paid TPC $4.9 million, $33.6 million and $30.0 million in 2003, 2002 and
2001, respectively, for these services. The amounts due to affiliates related to
these services, included in other liabilities at December 31, 2003 and 2002,    
were insignificant. See Note 14.                                                

The Company has received reimbursements from Citigroup and its affiliates       
related to the Company's increased benefit and lease expenses after the TPC     
spin-off. These reimbursements totaled $34.3 million in 2003 and $15.5 million  
in 2002.                                                                        

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, 2003 and 2002, the pool       
totaled approximately $3.8 billion and $4.2 billion, respectively. The Company's
share of the pool amounted to $3.3 billion and $3.8 billion at December 31, 2003
and 2002, respectively, and is included in short-term securities in the         
consolidated balance sheets.                                                    

At December 31, 2003 and 2002, the Company had outstanding loaned securities to 
its affiliate Smith Barney (SB), a division of Citigroup Global Markets, Inc.,  
of $238.5 million and $267.1 million, respectively.                             

Included in other invested assets is a $3.2 billion investment in Citigroup     
Preferred Stock at December 31, 2003 and 2002, carried at cost. Dividends       
received on these investments were $204 million in 2003, $178 million in 2002   
and $53 million in 2001. See Note 11.                                           

The Company had investments in an affiliated joint venture, Tishman Speyer, in  
the amount of $166.3 million and $186.1 million at December 31, 2003 and 2002,  
respectively. Income of $18.6 million, $99.7 million and $65.5 million was      
earned on these investments in 2003, 2002 and 2001, respectively.               

The Company also had an investment in Greenwich Street Capital Partners I, an   
affiliated private equity investment, in the amount of $48.3 million and $23.6  
million at December 31, 2003 and 2002, respectively. Income (loss) of $33.9     
million, $0 million and $(41.6) million were earned on this investment in 2003, 
2002 and 2001, 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.                                                             

The Company markets deferred annuity products and life insurance through SB.    
Annuity deposits related to these products were $835 million, $1.0 billion, and 
$1.5 billion in 2003, 2002 and 2001, respectively. Life premiums were $114.9    
million, $109.7 million and $96.5 million in 2003, 2002 and 2001, respectively. 
Commissions and fees paid to SB were $70.3 million, $77.0 million and $84.6     
million in 2003, 2002 and 2001, respectively.                                   

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

The Company also markets individual annuity and life insurance through          
CitiStreet Retirement Services, a division of CitiStreet LLC, (CitiStreet), a   
joint venture between Citigroup and State Street Bank. Deposits received from   
CitiStreet were $1.4 billion in 2003 and $1.6 billion in each of 2002 and 2001. 
Commissions and fees paid to CitiStreet were $52.9 million, $54.0 million and   
$59.1 million in 2003, 2002 and 2001, respectively.                             

The Company markets individual annuity products through an affiliate Citibank,  
N.A. (together with its subsidiaries, Citibank). Deposits received from Citibank
were $357 million, $321 million and $564 million in 2003, 2002 and 2001,        
respectively. Commissions and fees paid to Citibank were $29.8 million, $24.0   
million and $37.2 million in 2003, 2002 and 2001, respectively.                 

Primerica Financial Services (PFS), an affiliate, is a distributor of products  
for TLA. PFS sold $714 million, $787 million and $901 million of individual     
annuities in 2003, 2002 and 2001, respectively. Commissions and fees paid to PFS
were $58.1 million, $60.4 million and $67.8 million in 2003, 2002 and 2001,     
respectively.                                                                   

Primerica Life has entered into a General Agency Agreement with PFS that        
provides that PFS will be Primerica Life's general agent for marketing all      
insurance of Primerica Life. In consideration of such services, Primerica Life  
agreed to pay PFS marketing fees of no less than $10 million per year based upon
U.S. gross direct premiums received by Primerica Life. In each of 2003, 2002,   
and 2001 the fees paid by Primerica Life were $12.5 million.                    

The Company sells structured settlement annuities to the property-casualty      
subsidiaries of TPC. See Note 14.                                               

TIC has made a solvency guarantee for an affiliate, CILIC. See Note 12.         

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 other employees. To further encourage employee stock ownership, Citigroup   
introduced the WealthBuilder stock option program during 1997 and the Citigroup 
Ownership Program in 2001. Under these programs, all employees meeting          
established requirements have been granted Citigroup stock options. During 2001,
Citigroup introduced the Citigroup 2001 Stock Purchase Program for new          
employees, which allowed eligible employees of Citigroup, including the         
Company's employees, to enter into fixed subscription agreements to purchase    
shares at the market value on the date of the agreements. During 2003 Citigroup 
introduced the Citigroup 2003 Stock Purchase Program, which allowed eligible    
employees of Citigroup, including the Company's employees, to enter into fixed  
subscription agreements to purchase shares at the lesser of the market value on 
the first date of the offering period or the market value at the close of the   
offering period. Enrolled employees are permitted to make one purchase prior to 
the expiration date. The Company's charge to income for these plans was         
insignificant in 2003, 2002 and 2001.                                           

The Company also participates in the Citigroup Capital Accumulation Program.    
Participating officers and other employees receive a restricted stock award in  
the form of Citigroup common stock. These restricted stock awards generally vest
after a three-year period and, except under limited circumstances, the stock can
not be sold or transferred during the restricted period by the participant, who 
is required to render service to the Company during the restricted period. The  
Company's charge to income for this program was insignificant in 2003, 2002 and 
2001.                                                                           

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

Unearned compensation expense associated with the Citigroup restricted common   
stock grants, which represents the market value of Citigroup's common stock at  
the date of grant, is included in other assets in the consolidated balance sheet
and is recognized as a charge to income ratably over the vesting period. The    
Company's charge to income was insignificant during 2003, 2002 and 2001.        

14.  TRAVELERS PROPERTY CASUALTY SPIN-OFF                                       

On March 27, 2002, TPC, the Company's parent at December 31, 2001, completed its
IPO. On August 20, 2002, Citigroup made a tax-free distribution to its          
stockholders of a majority portion of its remaining interest in TPC. Prior to   
the IPO the following transactions occurred:                                    

 o The common stock of the Company was distributed by TPC to CIHC so the
    Company would remain an indirect wholly owned subsidiary of Citigroup.

     o The Company sold its home office buildings in Hartford, Connecticut and a
    building housing TPC's information systems in Norcross, Georgia to TPC
for $68 million.                                                  

    o TLA Holdings LLC, a non-insurance subsidiary valued at $142 million, was
contributed to the Company by TPC.                                

    o The Company assumed pension, postretirement and post employment benefits
 payable to all inactive employees of the former Travelers Insurance
     entities and received $189 million of cash and other assets from TPC to
   offset these benefit liabilities. In March 2003, TPC paid the Company
  $22.6 million as a settlement for these benefit-related liabilities.

o The Company received 2,225 shares of Citigroup's 6.767% Cumulative  
    Preferred Stock, Series YYY, with a par value of $1.00 per share and a
   liquidation value of $1 million per share as a contribution from TPC.

At December 31, 2001, TPC and its subsidiaries were affiliates of the Company   
and provided certain services to the Company. These services included data      
processing, facilities management, banking and financial functions, benefits    
administration and others. During 2002, the Company began phasing out these     
services. The Company still receives certain services from TPC on a contract    
basis. The Company paid TPC $4.9 million, $33.6 million and $30.0 million in    
2003, 2002 and 2001, respectively, for these services.                          

The Company sells structured settlement annuities to the property-casualty      
insurance subsidiaries of TPC. Such premiums and deposits were $159 million and 
$194 million for 2002 and 2001, respectively.                                   

The Company has a license from TPC to use the names "Travelers Life & Annuity," 
"The Travelers Insurance Company," "The Travelers Life and Annuity Company" and 
related names in connection with the Company's business.                        

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (CONTINUED)

15.  RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES  

The following table reconciles net income to net cash provided by operating     
activities:                                                                     

--------------------------------------------------------------------------------
FOR THE YEAR ENDED DECEMBER 31,                     2003       2002       2001  
($ IN MILLIONS)                                                                 
--------------------------------------------------------------------------------

Net Income                                       $ 1,358    $ 1,082    $ 1,281  
Adjustments to reconcile net income to net                              
cash provided by operating activities:                                  
      Realized (gains) losses                       (37)       322       (125)
     Deferred federal income taxes                  58        185        159
Amortization of deferred policy                                   
       acquisition costs                           501        393        379
Additions to deferred policy acquisition                          
        costs                                      (960)      (879)      (851)
      Investment income                            (503)      (119)      (493)
     Premium balances                                8         (7)         7
     Insurance reserves and accrued expenses       832        493        686
     Other                                        (443)      (402)       237
--------------------------------------------------------------------------------
Net cash provided by operations                  $   814    $ 1,068    $ 1,280  
--------------------------------------------------------------------------------

16.  NON-CASH INVESTING AND FINANCING ACTIVITIES                                

In 2003, significant non-cash investing and financing activities include the    
acquisition of real estate through foreclosures of mortgage loans amounting to  
$129 million. In 2002, these activities include the contribution of $2,225      
million of Citigroup YYY Preferred Stock and related deferred tax liability of  
$779 million; a $17 million COLI asset and $98 million deferred tax asset       
related to the transfer of $279 million of pension and postretirement benefits, 
transferred for $172 million cash; and the contribution of a non-insurance      
company, TLA Holdings, LLC, for $142 million. In 2001, these activities were    
insignificant.                                                                  

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INDEPENDENT AUDITORS' REPORT

The Board of Directors and Shareholder                                          
The Travelers Insurance Company:                                                

Under date of February 26, 2004, we reported on the consolidated balance sheets 
of The Travelers Insurance Company and subsidiaries as of December 31, 2003 and 
2002, and the related consolidated statements of income, changes in             
shareholder's equity and cash flows for each of the years in the three-year     
period ended December 31, 2003, which are included in the Form 10-K. In         
connection with our audits of the aforementioned consolidated financial         
statements, we also audited the related consolidated financial statement        
schedules as listed in the accompanying index. These financial statement        
schedules are the responsibility of the Company's management. Our responsibility
is to express an opinion on these financial statement schedules based on our    
audits.                                                                         

In our opinion, such financial statement schedules, when considered in relation 
to the basic consolidated financial statements taken as a whole, present fairly,
in all material respects, the information set forth therein.                    

As discussed in Note 1 to the consolidated financial statements, the Company    
changed its methods of accounting for variable interest entities in 2003, for   
goodwill and intangible assets in 2002, and for derivative instruments and      
hedging activities and for securitized financial assets in 2001.                

/s/KPMG LLP                                                                     

Hartford, Connecticut                                                           
February 26, 2004                                                               

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

SCHEDULE I
SUMMARY OF INVESTMENTS - OTHER THAN INVESTMENTS IN RELATED PARTIES
 DECEMBER 31, 2003
 ($ IN MILLIONS)

--------------------------------------------------------------------------------
TYPE OF INVESTMENT                                                AMOUNT SHOWN  
                                                                IN BALANCE
                                            COST       VALUE    SHEET(1)
--------------------------------------------------------------------------------

Fixed Maturities:                                                               
Bonds:                                                                    
U.S. Government and government                                    
     agencies and Authorities              $ 6,487    $ 6,642    $ 6,642
States, municipalities and political                              
     subdivisions                              379        398        398
   Foreign governments                         690        740        740
   Public utilities                          2,702      2,901      2,901
Convertible bonds and bonds with                                  
     warrants attached                         187        208        208
   All other corporate bonds                29,519     31,260     31,260
--------------------------------------------------------------------------------
      Total Bonds                           39,964     42,149     42,149
Redeemable preferred stocks                     155        174        174 
--------------------------------------------------------------------------------
  Total Fixed Maturities                    40,119     42,323     42,323
--------------------------------------------------------------------------------

Equity Securities:                                                              
Common Stocks:                                                            
  Banks, trust and insurance companies          14         16         16
  Industrial, miscellaneous and all other       95        118        118
--------------------------------------------------------------------------------
     Total Common Stocks                       109        134        134
Nonredeemable preferred stocks                  214        228        228 
--------------------------------------------------------------------------------
  Total Equity Securities                      323        362        362
--------------------------------------------------------------------------------

Mortgage Loans                                   1,886                 1,886    
Real Estate Held For Sale                           96                    96    
Policy Loans                                     1,135                 1,135    
Short-Term Securities                            3,603                 3,603    
Trading Securities                               1,707                 1,707    
Other Investments   (2)  (3)  (4)                1,465                 1,465    
--------------------------------------------------------------------------------
  Total Investments                        $50,334               $52,577
================================================================================

(1)  Determined in accordance with methods described in Notes 1 and 3 of the    
Notes to Consolidated Financial Statements.                           

(2)  Excludes $3.2 billion of Citigroup Inc. preferred stock. See Note 13 of    
Notes to Consolidated Financial Statements.                           

(3)  Also excludes $415 million fair value of investment in affiliated          
partnership interests.                                                

(4)  Includes derivatives marked to market and recorded at fair value in the    
balance sheet.                                                        

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

SCHEDULE III
 SUPPLEMENTARY INSURANCE INFORMATION
 ($ IN MILLIONS)

                                                        [Enlarge/Download Table]

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

                                        FUTURE                                                                                      
                                        POLICY        OTHER                                                                         
                                        BENEFITS,     POLICY                                      AMORTIZATION                      
                          DEFERRED      LOSSES,       CLAIMS                           BENEFITS,  OF DEFERRED                       
                          POLICY        CLAIMS        AND                 NET          CLAIMS     POLICY          OTHER             
                          ACQUISITION   AND LOSS      BENEFITS  PREMIUM   INVESTMENT   AND        ACQUISITION    OPERATING  PREMIUMS
                          COSTS         EXPENSES(1)   PAYABLE   REVENUE   INCOME       LOSSES(2)  COSTS          EXPENSES    WRITTEN
------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                                    
                    2003                                                                                                            
                    ----                                                                                                            

Travelers Life & Annuity   $2,361         $42,023       $532    $1,082      $2,743     $2,816         $266          $240     $1,093 
Primerica                   2,034           3,500        161     1,245         315        534          235           219      1,251 
------------------------------------------------------------------------------------------------------------------------------------
Total                      $4,395         $45,523       $693    $2,327      $3,058     $3,350         $501          $459     $2,344 
====================================================================================================================================

                    2002                                                                                                            
                    ----                                                                                                            

Travelers Life & Annuity   $2,043         $37,774       $461      $730      $2,646     $2,404         $174          $190       $729 
Primerica                   1,893           3,261        147     1,194         290        527          219           217      1,184 
------------------------------------------------------------------------------------------------------------------------------------
Total                      $3,936         $41,035       $608    $1,924      $2,936     $2,931         $393          $407     $1,913 
====================================================================================================================================

                    2001                                                                                                            
                    ----                                                                                                            

Travelers Life & Annuity   $1,672         $33,475       $368     $ 957      $2,530     $2,534        $171           $154      $ 955 
Primerica                   1,789           3,044        144     1,145         301        507         208            217      1,157 
------------------------------------------------------------------------------------------------------------------------------------
Total                      $3,461         $36,519       $512    $2,102      $2,831     $3,041        $379           $371     $2,112 
====================================================================================================================================

(1)  Includes contractholder funds.                                             

(2)  Includes interest credited to contractholders.                             

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THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

 SCHEDULE IV
 REINSURANCE
 ($ IN MILLIONS)

--------------------------------------------------------------------------------
                                                      ASSUMED         PERCENTAGE
                                          CEDED TO     FROM            OF AMOUNT
                                 GROSS     OTHER      OTHER     NET    ASSUMED
                                AMOUNT  COMPANIES  COMPANIES  AMOUNT  TO NET
--------------------------------------------------------------------------------

2003                                                                            
----                                                                            
Life Insurance In Force          $593,006  $356,298  $  3,519  $240,227   1.4%  
Premiums:                                                                       
Life insurance                $  2,672       419  $      1  $  2,254    --
Accident and health insurance      308       235        --        73    --
Property casualty                   21        --        --        --    --
                              --------  --------  --------  --------  ----
   Total Premiums             $  3,001  $    675  $      1  $  2,327    --
                              ========  ========  ========  ========  ====

2002                                                                            
----                                                                            
Life Insurance In Force          $549,066  $321,940  $  3,568  $230,694   1.5%  
Premiums:                                                                       
Life insurance                $  2,227       377  $     --  $  1,850    --
Accident and health insurance      316       242        --        74    --
Property casualty                  109       109        --        --    --
                              --------  --------  --------  --------  ----
   Total Premiums             $  2,652  $    728  $     --  $  1,924    --
                              ========  ========  ========  ========  ====

2001                                                                            
----                                                                            
Life Insurance In Force          $510,457  $285,696  $  3,636  $228,397   1.6%  
Premiums:                                                                       
Life insurance                $  2,378  $    352  $     --  $  2,026    --
Accident and health insurance      321       246         1        76    --
Property casualty                  180       180        --        --    --
                              --------  --------  --------  --------  ----
   Total Premiums             $  2,879  $    778  $      1  $  2,102    --
                              ========  ========  ========  ========  ====

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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
     Quality Bond 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
the following as applicable:                                      

Statement of Assets and Liabilities as of December 31, 2003       
Statement of Operations for the year ended December 31, 2003      
       Statements of Changes in Net Assets for the years ended December 31, 2003
and 2002 Statement of Investments as of December 31, 2003 Notes to
Financial Statements                                              

  The consolidated financial statements and schedules 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, 2003,
2002 and 2001                                                     
Consolidated Balance Sheets as of December 31, 2003 and 2002      
     Consolidated Statements of Changes in Retained Earnings and Accumulated
Other Changes in Equity from Non-Owner Sources for the years ended
December 31, 2003, 2002 and 2001                                  
    Consolidated Statements of Cash Flows for the years ended December 31,
2003, 2002 and 2001                                               
Notes to Consolidated Financial Statements                        

(b)   Exhibits                                                                

EXHIBIT                                                               
NUMBER      DESCRIPTION                                             

 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. 28 to the Registration Statement
on Form N-3 filed April 19, 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.
0000950123-99-001978.)                      

     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. 27 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. 28 to the Registration Statement
on Form N-3 filed April 19, 1996.)          

     4(a)       Amendment to Investment Advisory Agreement between Travelers
              Asset Management International Company LLC (TAMIC) and The
          Travelers Money Market Account for Variable Annuities.
        (Incorporated herein by reference to Exhibit 4(a) to
                 Post-Effective Amendment No. 37 to the Registration Statement
on Form N-3, file No.                       
2-76358, filed April 30, 2004.)             

    5(a).      Distribution and Management Agreement among the Registrant,
              The Travelers Insurance Company and Travelers Distribution
             LLC. (Incorporated herein by reference to Exhibit 5(a) to
                 Post-Effective Amendment No. 73 to the Registration Statement
         on Form N-3, File No. 2-27330, filed April 30, 2001.)

5(b)       Selling Agreement. (Incorporated herein by reference to
         Exhibit 3(b) to Post-Effective Amendment No. 2 to the
                  Registration Statement on Form N-4 , File No. 333-65942, filed
on April 15, 2003.)                         

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   6.         Form of Variable Annuity Contract. (Incorporated herein by
                  reference to Exhibit 4 to Pre-Effective Amendment No. 1 to the
                  Registration Statement on Form N-4, File No. 333-117028, filed
October 13, 2004.)                          

  7.         Form of Application. (Incorporated herein by reference to
                  Exhibit 5 to Pre-Effective Amendment No. 1 to the Registration
                 Statement on Form N-4, File No. 333-117028, filed October 13,
2004.)                                      

  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
                  Pre-Effective Amendment No. 1 to the Registration Statement on
           Form N-3, File No. 333-116782, filed October 12, 2004.)

 13.         Consent of Independent Registered Public Accounting Firm.
Filed herein.                               

16(b).      Schedule for Computation of Total Return Calculations - 
              Standardized and Non-Standardized. (Incorporated herein by
                 reference to Exhibit 16(b) to Post-Effective Amendment No. 29
             to the Registration Statement on Form N-3 filed April 28,
1997.)                                      

     17.         Code of Ethics - (Incorporated herein by reference to Exhibit
             17 to Post-Effective Amendment No. 73 to the Registration
            Statement on Form N-3, File No. 2-27330, filed April 30,
2001.)                                      

      18.         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. 28 to the Registration Statement
on Form N-3 filed April 19, 1996.)          

                Powers of Attorney authorizing Ernest J. Wright and Kathleen
             A. McGah as signatory for George C. Kokulis, Katherine M.
                Sullivan and Glenn Lammey. (Incorporated herein by reference
           to Exhibit 18 to Post-Effective Amendment No. 33 to the
              Registration Statement on Form N-3, filed April 28, 2000.)

                Powers of Attorney authorizing Ernest J. Wright and Kathleen
                A. McGah as signatory for Glenn Lammey, Marla Berman Lewitus
                and William R. Hogan filed herewith. (Incorporated herein by
                 reference to Exhibit 18 to Post-Effective Amendment No. 34 to
      the Registration Statement, filed April 30, 2001.)

                  Power of Attorney authorizing Ernest J. Wright and Kathleen A.
             McGah as signatory for Kathleen A. Preston. (Incorporated
                 herein by reference to Exhibit 18 to Post-Effective Amendment
              No. 35 to the Registration Statement on Form N-3, File No.
2-76358, filed April 30, 2002.)             

                Powers of Attorney authorizing Ernest J. Wright and Kathleen
                 A. McGah as signatory for R. Jay Gerken, and David A. Golino.
              (Incorporated by reference to Exhibit 18 to Post-Effective
               Amendment No. 36 to the Registration Statement on Form N-3,
File No. 2-76358, filed April 29, 2003.)    

                  Powers of Attorney authorizing Kathleen A. McGah and Ernest J.
                Wright as signatory for Robert E. McGill III, Lewis Mandell,
                  Frances M. Hawk, Jay Gerken and David A. Golino. (Incorporated
         herein by reference to Exhibit 18 to the Registration
              Statement on Form N-3, File No. 333-117032, filed June 30,
2004.)                                      

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ITEM 29.      DIRECTORS AND OFFICERS OF THE TRAVELERS INSURANCE COMPANY         

NAME AND PRINCIPAL           POSITIONS AND OFFICES                              
BUSINESS ADDRESS             WITH INSURANCE COMPANY                             

George C. Kokulis*           Director, Chairman, President and Chief Executive  
Officer               

Glenn D. Lammey*             Director, Executive Vice President, Chief Financial
           Officer, Chief Accounting Officer

Kathleen L. Preston*         Director and Executive Vice President              

Edward W. Cassidy*           Senior Vice President                              

Marla Berman Lewitus*        Director, Senior Vice President and General Counsel

Brendan Lynch*               Senior Vice President                              

Laura A. Pantaleo***         Senior Vice President                              

David A. Tyson*              Senior Vice President                              

F. Denney Voss*              Senior Vice President                              

David A. Golino*             Vice President and Controller                      

Donald R. Munson, Jr.*       Vice President                                     

Mark Remington*              Vice President                                     

Tim W. Still*                Vice President                                     

Linn K. Richardson*          Second Vice President and Actuary                  

Paul Weissman*               Second Vice President and Actuary                  

Ernest J.Wright*             Vice President and Secretary                       

Kathleen A. McGah*           Assistant Secretary and Deputy General Counsel     

*  The Travelers Insurance Company                                              
One Cityplace                                                             
Hartford, CT  06103-3415                                                  

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. 6
to the Registration Statement on Form N-4, File No. 333-82009, filed April 14,  
2004.                                                                           

ITEM 31.      NUMBER OF CONTRACT OWNERS                                         

As of September 30, 2004, 6,548 contract owners held qualified and non-qualified
contracts offered by the 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,                                              

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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.                                                                     

ITEM 33.      BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER              

Information as to Officers and Directors of Travelers Asset Management          
International Company LLC (TAMIC), the Investment Adviser for The Travelers     
Growth and Income Stock Account for Variable Annuities, is in included in its   
Form ADV (File No. 801-57536) filed with the Commission, which is incorporated  
herein by reference thereto.                                                    

ITEM 34.      PRINCIPAL UNDERWRITER                                             

(a)    Travelers Distribution LLC                                               
One Cityplace                                                     
Hartford, CT 06103-3415                                           

Travelers Distribution LLC also serves as principal underwriter and 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, 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 Quality Bond Account for Variable Annuities,  
Tactical Growth and Income Stock Account for Variable Annuities, Tactical       
Short-Term Bond Account for Variable Annuities, Tactical Aggressive Stock       
Account for Variable Annuities, Citicorp Life Variable Annuity Separate Account 
and First Citicorp Life Variable Annuity Separate Account, TIC Separate Account 
Eleven for Variable Annuities, TLAC Separate Account Twelve for Variable        
Annuities, TIC Separate                                                         

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Account Thirteen for Variable Annuities, TLAC Separate Account Fourteen for     
Variable Annuities, TIC Variable Annuity Separate Account 2002, and TLAC        
Variable Annuity Separate Account 2002.                                         

(b) NAME AND PRINCIPAL         POSITIONS AND OFFICES                            
BUSINESS ADDRESS           WITH UNDERWRITER                             

Kathleen L. Preston        Board of Manager                             

Glenn D. Lammey            Board of Manager                             

William F. Scully III      Board of Manager                             

Donald R. Munson, Jr.      Board of Manager, President, Chief Executive 
                 Officer and Chief Operating Officer

Tim W. Still               Vice President                               

Anthony Cocolla            Vice President                               

John M. Laverty            Treasurer and Chief Financial Officer        

Stephen E. Abbey           Chief Compliance Officer                     

    Alison K. George           Director and Chief Advertising Compliance Officer

Stephen T. Mullin          Chief Compliance Officer                     

Ernest J. Wright           Secretary                                    

Kathleen A. McGah          Assistant Secretary                          

William D. Wilcox          Assistant Secretary                          

* The business address for all the above is: One Cityplace, Hartford, CT        
06103-3415.                                                                 

(c)    Not Applicable                                                           

ITEM 35.      LOCATION OF ACCOUNTS AND RECORDS                                  

(1)    The Travelers Insurance Company                                          
One Cityplace                                                     
Hartford, Connecticut  06103-3415                                 

(2)    Chase Manhattan Bank, N. A. Chase MetroTech Center Brooklyn, New York    
11245                                                             

ITEM 36.      MANAGEMENT SERVICES                                               

Inapplicable.                                                                   

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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 Contract 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.    

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SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of     
1940, the Registrant has duly caused this Pre-Effective Amendment No. 1 to the  
registration statement to be signed on its behalf by the undersigned thereunto  
duly authorized, in the City of Hartford, State of Connecticut, on the 13th day 
of October 2004.                                                                

 THE TRAVELERS MONEY MARKET ACCOUNT FOR VARIABLE ANNUITIES
(Registrant)

By: * R. JAY GERKEN       
                               -------------------------------------------------
                               R. Jay Gerken, Chairman of the Board of Managers,
                   Chief Executive Officer and President

As required by the Securities Act of 1933, this registration statement has been 
signed by the following persons in the capacities indicated on the 13th day of  
October 2004.                                                                   

R. JAY GERKEN                                    Chairman of the                
----------------------------------------------   Board of Managers, Chief       
(R. Jay Gerken)                                  Executive Officer and President

*ROBERT E. MCGILL III                            Board of Managers              
----------------------------------------------                                  
(Robert E. McGill III)                                                          

*LEWIS MANDELL                                   Board of Managers              
----------------------------------------------                                  
(Lewis Mandell)                                                                 

*FRANCES M. HAWK                                 Board of Managers              
----------------------------------------------                                  
(Frances M. Hawk)                                                               

*DAVID A. GOLINO                                 Principal Accounting Officer   
----------------------------------------------                                  
(David A. Golino)                                                               

*By:     /s/ Ernest J. Wright, Attorney-in-Fact                                 
Assistant Secretary, Board of Trustees                        

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SIGNATURES

As required by the Securities Act of 1933 and the Investment Company Act of     
1940, the Registrant has duly caused this Pre-Effective Amendment No. 1 to the  
registration statement to be signed on its behalf by the undersigned thereunto  
duly authorized, in the City of Hartford, State of Connecticut, on the 13th day 
of October 2004.                                                                

 THE TRAVELERS INSURANCE COMPANY
 (Insurance Company)

By: *GLENN D. LAMMEY    
                                ------------------------------------------------
                               Glenn D. Lammey, Chief Financial Officer, Chief
  Accounting Officer

As required by the Securities Act of 1933, this registration statement has been 
signed by the following persons in the capacities indicated on the 13th day of  
October 2004.                                                                   

*GEORGE C. KOKULIS                      Director, President and Chief Executive 
------------------------------------    Officer (Principal Executive Officer)   
(George C. Kokulis)                                                             

*GLENN D. LAMMEY                        Director, Chief Financial Officer, Chief
------------------------------------    Accounting Officer (Principal Financial 
(Glenn D. Lammey)                       Officer)                                

*MARLA BERMAN LEWITUS                   Director                                
------------------------------------                                            
(Marla Berman Lewitus)                                                          

*KATHLEEN L. PRESTON                    Director                                
-----------------------------------                                             
(Kathleen L. Preston)                                                           

*By:     /s/ Ernest J. Wright, Attorney-in-Fact                                 

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 EXHIBIT INDEX

EXHIBIT NO.    DESCRIPTION                                                  
13         Consent of Independent Registered Public Accounting Firm 

Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘N-3/A’ Filing		Date		First		Last			Other Filings
		2/27/22		201
		12/22/18		201
		4/30/05		14
		12/31/04		15					24F-2NT,  N-CSR,  NSAR-B
		10/25/04		3		107
Filed on:		10/13/04		212					N-3/A
		10/12/04		212
		9/30/04		213					N-Q
		6/30/04		212					N-3,  N-CSRS,  N-PX,  NSAR-A
		6/28/04		50
		5/1/04		14
		4/30/04		14		211			485BPOS
		4/14/04		213
		3/12/04		161
		2/26/04		162		207
		1/28/04		15
		1/1/04		14
		12/31/03		12		211			24F-2NT,  N-CSR,  NSAR-B
		12/15/03		168		170
		10/31/03		15
		7/1/03		168
		6/30/03		168					N-CSRS,  NSAR-A
		4/29/03		212					485BPOS
		4/15/03		211
		2/1/03		168		190
		1/1/03		168		169
		12/31/02		88		211			24F-2NT,  N-30D,  NSAR-B
		8/20/02		167		205
		5/1/02		14
		4/30/02		212					485BPOS
		3/27/02		167		205			24F-2NT
		2/4/02		167
		1/1/02		169		192
		12/31/01		88		211			24F-2NT,  N-30D,  NSAR-B
		4/30/01		211		212			485BPOS
		4/1/01		191
		1/1/01		169		197
		7/1/00		190
		4/28/00		212					485BPOS
		3/9/99		211					DEF 14A
		12/31/98		99					24F-2NT,  N-30D,  NSAR-B
		5/1/98		92
		4/27/98		90					DEF 14A,  PRE 14A
		1/1/98		98
		4/28/97		212					485BPOS,  DEF 14A
		1/1/97		98
		4/19/96		211		212			DEF 14A
		4/26/95		211					486BPOS
		4/18/95		212
		1/3/95		190
		10/20/94		212
		10/19/94		212
		4/23/93		90
									List all Filings