1
Registration Statement No. 333-69793
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Post-Effective Amendment No. 2 to
FORM S-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
THE TRAVELERS INSURANCE COMPANY
(Exact name of registrant as specified in its charter)
CONNECTICUT
(State or other jurisdiction of incorporation or organization)
I.R.S. Employer Identification Number: 06-0566090
One Tower Square, Hartford, Connecticut 06183 (860) 277-0111
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(Address, including Zip Code, and Telephone Number, including Area Code,
of Registrant's Principal Executive Offices)
Ernest J. Wright, Secretary
The Travelers Insurance Company
One Tower Square
Hartford, Connecticut 06183
(860) 277-4345
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(Name, Address, including Zip Code, and Telephone Number,
including Area Code of Agent for Service)
Approximate date of commencement of proposed sale to the public: The investment
option interests covered by this registration statement are to be issued from
time to time after the effective date of this registration statement.
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933 check the following box. __X__
If the registrant elects to deliver its latest annual report to
security-holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this form, check the following box. _____
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. _____
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering _____.
If this form is a post-effective amendment filed pursuant to Rule 462(d) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering _____.
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. _____
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PART I
INFORMATION REQUIRED IN PROSPECTUS
THE TRAVELERS INSURANCE COMPANY
Cross Reference Sheet Pursuant to Regulation S-K, Item 501(b)
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Item
No. Form S-2 Caption Heading in Prospectus
- ---- ---------------- ---------------------
1. Forepart of the Registration Statement Outside Front Cover Page of Registration
and Outside Front Cover Page of Statement and Prospectus
Prospectus
2. Inside Front and Outside Back Cover Available Information, Incorporation of
Pages of Prospectus Certain Documents by Reference;
Table of Contents
3. Summary Information, Risk Factors Prospectus Summary; Outside Front
and Ratio of Earnings to Fixed Charges Cover Page
4. Use of Proceeds Investments by the Company
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Not Applicable
8. Plan of Distribution Distribution of the Contract
9. Description of Securities to be Outside Front Cover Page of Prospectus;
Registered Description of Contracts
10. Interests of Named Experts and Not Applicable
Counsel
11. Information with Respect to the Outside Front Cover Page; Incorporation
Registrant of Certain Documents by Reference to Form 10-K
12. Incorporation of Certain Incorporation of Certain Documents by
Information by Reference Reference
13. Disclosure of Commission Position Not Applicable
on Indemnification of Securities
Act Liabilities
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PROSPECTUS
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TRAVELERS RETIREMENT ACCOUNT ANNUITY PROSPECTUS:
THE TRAVELERS SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES
THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES
This prospectus describes TRAVELERS RETIREMENT ACCOUNT, a flexible premium
deferred variable annuity contract (the "Contract") issued by The Travelers
Insurance Company or The Travelers Life and Annuity Company, depending on the
state in which you purchased your Contract. The Contract is available in
connection with certain retirement plans that qualify for special federal income
tax treatment ("qualified Contracts"). We may issue it as an individual Contract
or as a group Contract. When we issue a group Contract, you will receive a
certificate summarizing the Contract's provisions. For convenience, we refer to
Contracts and certificates as "Contracts."
You can choose to have your premium ("purchase payments") and any applicable
purchase payment credits accumulate on a variable and/or fixed basis in one of
our funding options. Your contract value before the maturity date and the amount
of monthly income afterwards will vary daily to reflect the investment
experience of the variable funding options you select. You bear the investment
risk of investing in the variable funding options. The variable funding options
are:
Capital Appreciation Fund
Managed Assets Trust
High Yield Bond Trust
Money Market Portfolio
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Value Fund
CITISTREET FUNDS, INC.(1)
Diversified Bond Fund(2)
International Stock Fund(3)
Large Company Stock Fund(4)
Small Company Stock Fund(5)
CREDIT SUISSE WARBURG PINCUS TRUST
Emerging Markets Portfolio
DELAWARE GROUP PREMIUM FUND, INC.
REIT Series
Small Cap Value Series
DREYFUS VARIABLE INVESTMENT FUND
Appreciation Portfolio -- Initial Class
Small Cap Portfolio -- Initial Class
GREENWICH STREET SERIES FUND
Appreciation Portfolio
Equity Index Portfolio Class II
Fundamental Value Portfolio
JANUS ASPEN SERIES
Aggressive Growth Portfolio -- Service Shares
Balanced Portfolio -- Service Shares
Worldwide Growth Portfolio -- Service Shares
PIMCO VARIABLE INSURANCE TRUST
Total Return Bond Portfolio
PUTNAM VARIABLE TRUST
Putman VT International Growth Fund -- Class IB Shares
Putman VT Small Cap Value Fund -- Class IB Shares
Putman VT Voyager II Fund -- Class IB Shares
SALOMON BROTHERS VARIABLE SERIES FUNDS, INC.
Capital Fund
Investors Fund
Small Cap Growth Fund
Total Return Fund
SMITH BARNEY INVESTMENT SERIES
Smith Barney Large Cap Core Portfolio
Smith Barney Premier Selection All Cap Growth Portfolio
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Multi Cap Value Fund II(6)
TRAVELERS SERIES FUND, INC.
AIM Capital Appreciation Portfolio
Alliance Growth Portfolio
MFS Total Return Portfolio
Putnam Diversified Income Portfolio
Smith Barney Aggressive Growth Portfolio
Smith Barney High Income Portfolio
Smith Barney International All Cap Growth Portfolio(7)
Smith Barney Large Capitalization Growth Portfolio
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Portfolio
Equity Income Portfolio
Federated Stock Portfolio
Large Cap Portfolio
Lazard International Stock Portfolio
MFS Emerging Growth Portfolio
MFS Mid Cap Growth Portfolio
MFS Research Portfolio
Social Awareness Stock Portfolio
Travelers Quality Bond Portfolio
U.S. Government Securities Portfolio
Utilities Portfolio
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth Portfolio -- Class II Shares
Enterprise Portfolio -- Class II Shares
VARIABLE ANNUITY PORTFOLIOS
Smith Barney Small Cap Growth Opportunities Portfolio
VARIABLE INSURANCE PRODUCTS FUND II (FIDELITY)
Asset Manager Portfolio -- Service Class 2
Contrafund(R) Portfolio -- Service Class 2
VARIABLE INSURANCE PRODUCTS FUND III (FIDELITY)
Dynamic Capital Appreciation Portfolio -- Service Class 2
Mid Cap Portfolio -- Service Class 2
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(1) formerly American Odyssey Funds, Inc.
(2) formerly Long-Term Bond Fund
(3) formerly International Equity Fund
(4) formerly Core Equity Fund
(5) formerly Emerging Opportunities Fund
(6) formerly Strong Schafer Value Fund
(7) formerly Smith Barney International Equity Fund
We also offer variable annuity contracts that do not have purchase payment
credits, and therefore may have lower fees. Over time, the value of the purchase
payment credits could be more than offset by higher charges. You should
carefully consider whether or not this Contract is the most appropriate
investment for you.
The Contract, certain contract features and/or some of the funding options may
not be available in all states. The Fixed Account is described in a separate
prospectus. THE CURRENT PROSPECTUSES FOR THE UNDERLYING FUNDS THAT SUPPORT THE
VARIABLE FUNDING OPTIONS MUST ACCOMPANY THIS PROSPECTUS. READ AND RETAIN THEM
FOR FUTURE REFERENCE.
This prospectus provides the information that you should know before investing
in the Contract. You can receive additional information about your Contract by
requesting a copy of the Statement of Additional Information ("SAI") dated May
1, 2001. 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 Tower
Square, Hartford, Connecticut 06183, call 1-800-842-9406 or access the SEC's
website (http://www.sec.gov). See Appendix E for the SAI's table of contents.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS PASSED UPON THE ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS IS ACCOMPANIED BY A COPY
OF EACH OF THE TRAVELERS INSURANCE COMPANY'S AND THE TRAVELERS LIFE AND ANNUITY
COMPANY'S LATEST ANNUAL REPORTS FILED ON FORM 10-K FOR THE PERIOD ENDED DECEMBER
31, 2000. VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OF ANY BANK, AND ARE NOT
INSURED OR GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER
GOVERNMENT AGENCY.
PROSPECTUS DATED MAY 1, 2001
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TABLE OF CONTENTS
Index of Special Terms.................... 2
Summary................................... 3
Fee Table................................. 6
Condensed Financial Information........... 14
The Annuity Contract...................... 14
Contract Owner Inquiries................ 14
Purchase Payments....................... 14
Purchase Payment Credits................ 14
Conservation Credits.................... 15
Accumulation Units...................... 15
The Variable Funding Options............ 15
The Fixed Account......................... 21
Charges and Deductions.................... 21
General................................. 21
Withdrawal Charge....................... 22
Free Withdrawal Allowance............... 23
Transfer Charge......................... 23
Mortality and Expense Risk Charge....... 23
Variable Funding Option Expenses........ 23
Floor Benefit/Liquidity Benefit
Charges............................... 23
CHART Asset Allocation Program Charges.. 23
Premium Tax............................. 23
Changes in Taxes Based upon Premium or
Value................................. 24
Transfers................................. 24
Dollar Cost Averaging................... 24
Access to Your Money...................... 25
Systematic Withdrawals.................. 25
Managed Distribution Program............ 25
Ownership Provisions...................... 26
Types of Ownership...................... 26
Contract Owner........................ 26
Beneficiary........................... 26
Death Benefit............................. 26
Death Proceeds Before the Maturity
Date.................................. 26
Payment of Proceeds..................... 27
Death Proceeds After the Maturity
Date.................................. 29
The Annuity Period........................ 29
Maturity Date........................... 29
Liquidity Benefit....................... 30
Allocation of Annuity................... 30
Variable Annuity........................ 30
Fixed Annuity........................... 31
Payment Options........................... 31
Election of Options..................... 31
Annuity Options......................... 32
Miscellaneous Contract Provisions......... 33
Right to Return......................... 33
Termination............................. 33
Required Reports........................ 33
Suspension of Payments.................. 33
The Separate Accounts..................... 33
Performance Information................. 34
Federal Tax Considerations................ 35
General Taxation of Annuities........... 35
Qualified Annuity Contracts............. 35
Penalty Tax for Premature
Distributions......................... 35
Diversification Requirements for
Variable Annuities.................... 35
Ownership of the Investments............ 36
Mandatory Distributions for Qualified
Plans................................. 36
Taxation of Death Benefit Proceeds...... 36
Available Information..................... 36
Incorporation of Certain Documents By
Reference............................... 37
Other Information......................... 37
The Insurance Companies................. 37
Financial Statements.................... 37
Distribution of Variable Annuity
Contracts............................. 37
Conformity with State and Federal
Laws.................................. 38
Voting Rights........................... 38
Legal Proceedings and Opinions.......... 38
APPENDIX A: Condensed Financial
Information for The Travelers Insurance
Company: Separate Account Five.......... A-1
APPENDIX B: Condensed Financial
Information for The Travelers Life and
Annuity Company: Separate Account Six... B-1
APPENDIX C: Waiver of Withdrawal Charge
for Nursing Home Confinement............ C-1
APPENDIX D: Market Value Adjustment....... D-1
APPENDIX E: Contents of the Statement of
Additional Information.................. E-1
Financial Statements......................
INDEX OF SPECIAL TERMS
The following terms are italicized throughout the prospectus. Refer to the page
listed for an explanation of each term.
Accumulation unit......................... 15
Accumulation period....................... 15
Annuitant................................. 26
Annuitization credit...................... 30
Annuity payments.......................... 29
Annuity unit.............................. 15
Cash surrender value...................... 25
Conservation credit....................... 15
Contract date............................. 14
Contract owner (You, Your)................ 26
Contract value............................ 14
Contract year............................. 14
Death report date......................... 26
Fixed Account............................. 14
Funding Option(s)......................... 14
Maturity date............................. 29
Purchase payment.......................... 14
Purchase payment credit................... 14
Underlying fund........................... 15
Written request........................... 14
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SUMMARY:
TRAVELERS RETIREMENT ACCOUNT
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.
WHAT COMPANY WILL ISSUE MY CONTRACT? Your issuing company is either The
Travelers Insurance Company or The Travelers Life and Annuity Company, ("the
Company," "We" or "Us") depending on where you reside. Each company sponsors its
own segregated asset account ("Separate Account"). The Travelers Insurance
Company sponsors the Travelers Separate Account Five for Variable Annuities
("Separate Account Five"); The Travelers Life and Annuity Company sponsors the
Travelers Separate Account Six for Variable Annuities ("Separate Account Six").
When we refer to the Separate Account, we are referring to either Separate
Account Five or Separate Account Six, depending upon your issuing Company.
Your issuing Company is The Travelers Life and Annuity Company unless you reside
in one of the following locations. The Travelers Insurance Company issues
Contracts in the locations listed below:
Bahamas
British Virgin Islands
Guam
New Hampshire
New Jersey
New York
U.S. Virgin Islands
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 death benefit as well as guaranteed payout options. You direct your
payment(s) to one or more of the variable funding options and/or to the Fixed
Account 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 are designed to produce a higher rate of return than the Fixed
Account; however, this is not guaranteed. You can also lose money in the
variable funding options.
The Contract, like all deferred variable annuity contracts, has two phases: the
accumulation phase and the payout phase. During the accumulation phase
generally, under a qualified contract, your pre-tax contributions accumulate on
a tax-deferred basis and are taxed as income when you make a withdrawal,
presumably when you are in a lower tax bracket. During the accumulation phase,
under a nonqualified contract, earnings on your after-tax contributions
accumulate on a tax-deferred basis and are taxed as income when you make a
withdrawal. The payout phase occurs when you begin receiving payments from your
Contract. The amount of money you accumulate in your Contract determines the
amount of income (annuity payments) you receive during the payout phase.
During the payout phase, you may choose one of a number of annuity options. You
may receive income payments from the variable funding options and/or the Fixed
Account. If you elect variable income payments, the dollar amount or your
payments may increase or decrease. Once you choose one of the annuity options
and begin to receive payments, it cannot be changed.
WHO SHOULD PURCHASE THIS CONTRACT? The Contract is currently available for use
in connection with tax qualified retirement plans ("Plans"), which include
contracts qualifying under Section 401(a), 403(b), 408 or 457 of the Internal
Revenue Code of 1986, as amended. Purchase of this Contract through a Plan does
not provide any additional tax deferral benefits beyond those provided by the
Plan. Accordingly, you should consider purchasing this Contract for its Death
Benefit, Annuity Option Benefits, and other non-tax-related benefits.
You may purchase the Contract with an initial payment of at least $20,000. You
may make additional payments of at least $5,000 at any time during the
accumulation phase.
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WHO IS THE CONTRACT ISSUED TO? If you purchase an individual contract, you are
the contract owner. If a group contract is purchased, we issue certificates to
the individual participants. Where we refer to "you," we are referring to the
individual contract owner or the group participant, as applicable. We refer to
both contracts and certificates as "Contracts." If a group unallocated contract
is purchased, we issue only the Contract.
We issue group contracts in connection with retirement plans. Depending on your
Plan, certain features and/or variable funding options described in this
prospectus may not be available to you. Your Plan provisions supercede the
prospectus. If you have any questions about your specific Plan, contact your
Plan administrator.
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 longer 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, 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.
During the right to return period, you will not bear any contract fees
associated with the purchase payment credits. If you exercise your right to
return, you will be in the same position as if you had exercised the right to
return in a variable annuity contract with no purchase payment credit. You
would, however, receive any gains, and we would bear any losses attributable to
the purchase payment credits.
CAN YOU GIVE A GENERAL DESCRIPTION OF THE VARIABLE FUNDING OPTIONS AND HOW THEY
OPERATE? Through its subaccounts, the Separate Account uses your purchase
payments to purchase units, at your direction, of one or more of the variable
funding options. In turn, each variable funding option invests in an underlying
mutual fund ("underlying fund") 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 between the variable funding options as frequently as you wish
without any current tax implications. Currently there is no charge for
transfers, nor a limit to the number of transfers allowed. We may, in the
future, charge a fee for any transfer request, or limit the number of transfers
allowed. At a minimum, we would always allow one transfer every six months. We
reserve the right to restrict transfers that we determine will disadvantage
other contract owners.
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 risk ("M&E") charge daily from the amounts you allocate
to the Separate Account. We deduct the M&E at an annual rate of 0.80% for the
Standard Death Benefit, and 1.25% for the Optional Death Benefit. Each
underlying fund also charges for management costs and other expenses.
We will apply a withdrawal charge to withdrawals from the Contract, and will
calculate it as a percentage of the purchase payments and associated purchase
payment credits. The maximum percentage is 5%, gradually decreasing to 0% in
years six and later.
If you select the Variable Annuitization Floor Benefit, there is a Floor Benefit
charge assessed. This charge will vary based upon market conditions, and will be
set at the time you choose this option. Once established, this charge will
remain the same throughout the term of the annuitization.
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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,
purchase payment credits and on any earnings when you make a withdrawal or begin
receiving annuity payments. 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.
If you reach a certain age, you may be required by federal tax laws to begin
receiving payments from your annuity or risk paying a penalty tax. In those
cases, we can calculate and pay you the minimum required distribution amounts.
During the annuity period, if you have elected the Variable Annuity Floor
Benefit Option and take a surrender, there will be tax implications. Consult
your tax advisor.
HOW MAY I ACCESS MY MONEY? You can take withdrawals any time during the
accumulation phase, subject to certain Plan restrictions under federal tax law.
Withdrawal charges, income taxes, and/or a penalty tax may apply to taxable
amounts withdrawn.
WHAT IS THE DEATH BENEFIT UNDER THE CONTRACT? You may choose to purchase the
Standard or Optional Death Benefit. 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. The Optional Death Benefit may not be available in all
states. 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 or Appendix B 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:
- 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.
- 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.
- MANAGED DISTRIBUTION PROGRAM. This 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.
- ASSET ALLOCATION ADVICE. If allowed you may elect to enter into a
separate advisory agreement with CitiStreet Financial Services LLC
("CitiStreet") for the purpose of receiving asset allocation advice under
CitiStreet's CHART Program. The CHART Program allocates all purchase
payments among the American Odyssey Funds. The CHART Program and
applicable fees are fully described in a separate disclosure statement.
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FEE TABLE
- --------------------------------------------------------------------------------
The purpose of this Fee Table is to assist Contract owners in understanding the
various costs and expenses that you will bear, directly or indirectly, if you
purchase this Contract. See "Charges and Deductions" in this prospectus for
additional information. Expenses shown do not include premium taxes, which may
be applicable. "Other Expenses" include operating costs of each underlying fund.
Each fund reflects these expenses in its net asset value; the expenses are not
deducted from your contract value.
TRANSACTION EXPENSES
WITHDRAWAL CHARGE (as a percentage of the purchase payments and any applicable
purchase payment credits withdrawn)
YEARS SINCE PURCHASE WITHDRAWAL
PAYMENT MADE CHARGE
0-1 5%
2 4%
3 3%
4 2%
5 1%
6 and later 0%
During the annuity period, if you have elected the Liquidity Benefit, a
surrender charge of 5% of the amount withdrawn will be assessed. See "Liquidity
Benefit."
ANNUAL SEPARATE ACCOUNT CHARGES:
(as a percentage of the average daily net assets of the Separate Account)
STANDARD OPTIONAL
DEATH BENEFIT DEATH BENEFIT
Mortality and Expense Risk Charge.................. 0.80% 1.25%
Administrative Expense Charge...................... None None
----- -----
Total Separate Account Charges........... 0.80% 1.25%
VARIABLE FUNDING OPTION EXPENSES:
(as a percentage of average daily net assets of the funding option as of
December 31, 2000, unless otherwise noted)
Each of the CitiStreet Funds is listed twice, once with and once without the
optional CHART asset allocation fee of 0.80% reflected.
TOTAL
ANNUAL
OPERATING
MANAGEMENT FEE OTHER EXPENSES EXPENSES
(AFTER EXPENSE 12B-1 (AFTER EXPENSE (AFTER EXPENSE
FUNDING OPTIONS: REIMBURSEMENT) FEES REIMBURSEMENT) REIMBURSEMENT)
- ---------------------------------------------------------------------------------------------------------
Capital Appreciation Fund...................... 0.81% 0.02% 0.83%
High Yield Bond Trust.......................... 0.56% 0.27% 0.83%
Managed Assets Trust........................... 0.56% 0.03% 0.59%
Money Market Portfolio......................... 0.38% 0.02% 0.40%
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Value Fund........................ 0.61% 0.23% 0.84%
CITISTREET FUNDS, INC.
CitiStreet Diversified Bond Fund........... 0.49% 0.13% 0.62%
CitiStreet International Stock Fund........ 0.58% 0.17% 0.75%
CitiStreet Large Company Stock Fund........ 0.55% 0.13% 0.68%
CitiStreet Small Company Stock Fund........ 0.66% 0.18% 0.84%
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TOTAL
ANNUAL
OPERATING
MANAGEMENT FEE OTHER EXPENSES EXPENSES
(AFTER EXPENSE 12B-1 (AFTER EXPENSE (AFTER EXPENSE
FUNDING OPTIONS: REIMBURSEMENT) FEES REIMBURSEMENT) REIMBURSEMENT)
- ---------------------------------------------------------------------------------------------------------
CITISTREET FUNDS, INC.*
CitiStreet Diversified Bond Fund*.......... 0.49% 0.93% 1.42%
CitiStreet International Stock Fund*....... 0.58% 0.97% 1.55%
CitiStreet Large Company Stock Fund*....... 0.55% 0.93% 1.48%
CitiStreet Small Company Stock Fund*....... 0.66% 0.98% 1.64%
CREDIT SUISSE WARBURG PINCUS TRUST
Emerging Markets Portfolio................. 1.09% 0.31% 1.40%(1)
DELAWARE GROUP PREMIUM FUND
REIT Series................................ 0.57% 0.28% 0.85%(2)
Small Cap Value Series..................... 0.71% 0.14% 0.85%(2)
DREYFUS VARIABLE INVESTMENT FUND
Appreciation Portfolio -- Initial Shares... 0.75% 0.03% 0.78%(3)
Small Cap Portfolio -- Initial Shares...... 0.75% 0.03% 0.78%(3)
GREENWICH STREET SERIES FUND
Appreciation Portfolio..................... 0.75% 0.03% 0.78%(4)
Equity Index Portfolio -- Class II
Shares**................................. 0.21% 0.25% 0.04% 0.50%(5)
Fundamental Value Portfolio................ 0.75% 0.04% 0.79%(4)
JANUS ASPEN SERIES
Aggressive Growth Portfolio -- Service
Shares**................................. 0.65% 0.25% 0.02% 0.92%
Balanced Portfolio -- Service Shares**..... 0.65% 0.25% 0.02% 0.92%
Worldwide Growth Portfolio -- Service
Shares**................................. 0.65% 0.25% 0.05% 0.95%
OCC ACCUMULATION TRUST
Equity Portfolio+.......................... 0.80% 0.15% 0.95%
PIMCO VARIABLE INSURANCE TRUST
Total Return Bond Portfolio................ 0.25% 0.40% 0.65%(6)
PUTNAM VARIABLE TRUST
Putnam VT International Growth Fund --
Class IB Shares**........................ 0.76% 0.25% 0.18% 1.19%
Putnam VT Small Cap Value Fund -- Class IB
Shares**................................. 0.80% 0.25% 0.30% 1.35%
Putnam VT Voyager II Fund -- Class IB
Shares**................................. 0.70% 0.25% 0.30% 1.25%(7)
SALOMON BROTHERS VARIABLE SERIES FUND INC.
Capital Fund............................... 0.58% 0.42% 1.00%(8)
Investors Fund............................. 0.70% 0.21% 0.91%
Small Cap Growth Fund...................... 0.00% 1.50% 1.50%(8)
Total Return Fund.......................... 0.46% 0.54% 1.00%(8)
SMITH BARNEY INVESTMENT SERIES
Smith Barney Large Cap Core Portfolio...... 0.75% 0.20% 0.95%(9)
Smith Barney Premier Selection All Cap
Growth Portfolio......................... 0.75% 0.20% 0.95%(9)
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Multi Cap Value Fund II............. 1.00% 0.20% 1.20%(10)
THE MONTGOMERY FUNDS III
Montgomery Variable Series: Growth Fund+... 0.82% 0.43% 1.25%(11)
7
11
TOTAL
ANNUAL
OPERATING
MANAGEMENT FEE OTHER EXPENSES EXPENSES
(AFTER EXPENSE 12B-1 (AFTER EXPENSE (AFTER EXPENSE
FUNDING OPTIONS: REIMBURSEMENT) FEES REIMBURSEMENT) REIMBURSEMENT)
- ---------------------------------------------------------------------------------------------------------
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Portfolio........ 0.76% 0.12% 0.88%
Disciplined Small Cap Stock Portfolio+..... 0.86% 0.14% 1.00%(12)
Equity Income Portfolio.................... 0.75% 0.07% 0.82%(13)
Federated Stock Portfolio.................. 0.69% 0.14% 0.82%
Large Cap Portfolio........................ 0.75% 0.07% 0.82%(13)
Lazard International Stock Portfolio....... 0.89% 0.14% 1.02%
MFS Emerging Growth Portfolio.............. 0.81% 0.05% 0.86%
MFS Mid Cap Growth Portfolio............... 0.86% 0.04% 0.90%
MFS Research Portfolio..................... 0.86% 0.06% 0.92%
Strategic Stock Portfolio+................. 0.66% 0.24% 0.90%(12)
Social Awareness Stock Portfolio........... 0.71% 0.04% 0.75%
Travelers Quality Bond Portfolio........... 0.38% 0.11% 0.49%
U.S. Government Securities Portfolio....... 0.39% 0.09% 0.48%
Utilities Portfolio........................ 0.71% 0.18% 0.89%
TRAVELERS SERIES FUND INC.
AIM Capital Appreciation Portfolio......... 0.80% 0.03% 0.83%(14)
Alliance Growth Portfolio.................. 0.80% 0.01% 0.81%(14)
MFS Total Return Portfolio................. 0.80% 0.04% 0.84%(14)
Putnam Diversified Income Portfolio........ 0.75% 0.12% 0.87%(14)
Smith Barney Aggressive Growth Portfolio... 0.80% 0.19% 0.99%(14)
Smith Barney High Income Portfolio......... 0.60% 0.06% 0.66%(14)
Smith Barney International All Cap Growth
Portfolio................................ 0.90% 0.08% 0.98%(14)
Smith Barney Large Capitalization Growth
Portfolio................................ 0.75% 0.02% 0.77%(14)
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth Portfolio Class II
Shares**................................. 0.70% 0.25% 0.05% 1.00%
Enterprise Portfolio Class II Shares**..... 0.50% 0.25% 0.10% 0.85%
VARIABLE ANNUITY PORTFOLIOS
Smith Barney Small Cap Growth Opportunities
Portfolio................................ 0.75% 0.15% 0.90%(15)
VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Portfolio -- Service Class
2**...................................... 0.53% 0.25% 0.10% 0.88%
Contrafund(R) Portfolio -- Service Class
2**...................................... 0.57% 0.25% 0.08% 0.90%(16)
VARIABLE INSURANCE PRODUCTS FUND III
Dynamic Capital Appreciation Portfolio --
Service Class 2**........................ 0.57% 0.25% 0.61% 1.43%(17)
Mid Cap Portfolio -- Service Class 2**..... 0.57% 0.25% 0.12% 0.94%(16)
FOOTNOTES:
+ No longer available to new contract owners.
* Includes CHART Asset Allocation Fee of 0.80%.
** 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 providers).
(1) Fee waivers, expense reimbursements, or expense credits reduced expenses
for the EMERGING MARKETS PORTFOLIO during 2000, but this may be
discontinued at any time. Without such arrangements, the Portfolio's
Management Fee, Other Expenses and Total Annual Operating Expenses would
equal 1.25%, 0.42% and 1.67%, respectively. The Portfolio's other expenses
are based on annualized estimates of expenses for the fiscal year ending
December 31, 2000, net of any fee waivers or expense reimbursements.
(2) The investment adviser for the REIT SERIES and the SMALL CAP VALUE SERIES
is Delaware Management Company ("DMC"). Effective through April 30, 2001,
DMC has voluntarily agreed to waive its management fee and reimburse the
Series for expenses to the extent that total expenses will not exceed
0.85%. Without such an arrangement, Total Annual Operating Expenses for the
funds would have been 1.03% and 0.89%, respectively.
(3) Total Annual Operating Expenses for the VIF SMALL CAP PORTFOLIO -- INITIAL
SHARES and the VIF APPRECIATION PORTFOLIO -- INITIAL SHARES do not include
interest expense, loan commitment fees, and dividends on securities sold
short. These figures are for the year ended December 31, 2000. Actual
expenses in future years may be higher or lower that the fees given.
(4) The Management Fee for the Portfolios includes 0.20% for fund
administration.
(5) The Management Fee includes 0.06% for fund administration.
8
12
(6) Other Expenses" reflects a 0.25% administrative fee and 0.01% representing
organizational expenses and pro rata Trustees' fees for the TOTAL RETURN
BOND PORTFOLIO. PIMCO has contractually agreed to reduce Total Annual
Operating Expenses to, the extent they would exceed, due to the payment of
organizational expenses and Trustees' fees, 0.65% of average daily net
assets for the TOTAL RETURN BOND PORTFOLIO. Without such reductions, Total
Annual Operating Expenses for the fiscal year ended December 31, 2000 would
have been 0.66%. 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.
(7) The Total Annual Operating Expenses for the VT VOYAGER FUND II -- CLASS IB
SHARES are based on estimated expenses. This fund commenced operations on
September 1, 2000.
(8) The Adviser has waived all or a portion of its Management Fees for the year
ended December 31, 2000. If such fees were not waived or expenses
reimbursed, the Management Fee, Other Expenses, and Total Annual Operating
Expenses would have been 0.85%, 0.42%, and 1.27%, respectively for the
CAPITAL FUND; 0.75%, 1.77%, and 2.52%, respectively for the SMALL CAP
GROWTH FUND; and 0.80%, 0.54%, and 1.34%, respectively for the TOTAL RETURN
FUND.
(9) The Adviser has agreed to waive all or a portion of its fees and reimburse
certain expenses for the year ended October 31, 2000 (the Fund's fiscal
year end). If such fees were not waived and expenses not reimbursed, Total
Annual Operating Expenses for the SMITH BARNEY PREMIER SELECTION ALL CAP
GROWTH PORTFOLIO and the SMITH BARNEY LARGE CAP CORE PORTFOLIO would have
been 2.14% and 1.55%, respectively. As a result of a voluntary expense
limitation, the expense ratios of these funds will not exceed 0.95%.
(10) The Adviser for STRONG MULTI CAP VALUE FUND II has voluntarily agreed to
cap the Total Annual Operating Expenses at 1.20%. The adviser has no
current intention to, but may in the future, discontinue or modify any
waiver of fees or absorption of expenses at its discretion without further
notification. Absent the waiver of fees, the Total Annual Operating
Expenses would be 1.41%.
(11) The investment manager of the MONTGOMERY VARIABLE SERIES: GROWTH FUND has
agreed to reduce some or all of its management fees if necessary to keep
Total Annual Operating Expenses, expressed on an annualized basis, at or
below one and one quarter percent (1.25%) of its average net assets. Absent
this waiver of fees, the Portfolio's Total Annual Operating Expenses would
equal 2.41%.
(12) Travelers Insurance Company has agreed to reimburse the STRATEGIC STOCK
PORTFOLIO and the DISCIPLINED SMALL CAP STOCK PORTFOLIO for expenses for
the period ended December 31, 2000 which exceeded 0.90% and 1.00%
respectively. Without such voluntary arrangements, the actual annualized
Total Annual Operating Expenses would have been 0.97% and 1.14%,
respectively.
(13) TAMIC or the fund has entered into varying arrangements with third parties
who either paid or reduced a portion of the fund's expenses. Without such
expense reductions, Total Annual Operating Expenses for the EQUITY INCOME
PORTFOLIO and the LARGE CAP PORTFOLIO would have been 0.87% and 0.84%,
respectively.
(14) Expenses are as of October 31, 2000 (the Fund's fiscal year end). There
were no fees waived or expenses reimbursed for these funds in 2000.
(15) The Advisor has agreed to reimburse SMITH BARNEY SMALL CAP GROWTH
OPPORTUNITIES PORTFOLIO for the period ended December 31, 2000. If such
expenses were not voluntarily reimbursed, the actual annualized Total
Annual Operating Expenses would have been 4.45%.
(16) Actual annual class operating expenses were lower because a portion of the
brokerage commissions that the fund paid was used to reduce the fund's
expenses, and/or because through arrangements with the fund's custodian,
credits realized as a result of uninvested cash balances were used to
reduce a portion of the fund's custodian expenses. Without such reduction,
Total Annual Operating Expenses for the CONTRAFUND(R) PORTFOLIO -- SERVICE
CLASS 2, and MID CAP PORTFOLIO -- SERVICE CLASS 2 would have been 0.92% and
0.99%, respectively.
(17) The Total Annual Operating Expenses for the DYNAMIC CAPITAL APPRECIATION
PORTFOLIO -- SERVICE CLASS 2 are based on estimated expenses.
9
13
EXAMPLES
These examples show what your costs would be under certain hypothetical
situations. The examples do not represent past or future expenses. Your actual
expenses may be more or less than those shown. We base examples on the annual
expenses of the underlying funds for the year ended December 31, 2000, and
assume that any fee waivers and expense reimbursements will continue. We cannot
guarantee that these fee waivers and expense reimbursements will continue. The
examples assume the application of a purchase payment credit of 2% when the
optional death benefit has been selected.
EXAMPLE: STANDARD DEATH BENEFIT
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return on assets, and the charges reflected in the expense table above
using the expenses for the Standard Death Benefit:
- ---------------------------------------------------------------------------------------------------------------------------------
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
- ---------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund......................... 67 81 99 193 17 51 89 193
High Yield Bond Trust............................. 67 81 99 193 17 51 89 193
Managed Assets Trust.............................. 64 74 86 167 14 44 76 167
Money Market Portfolio............................ 62 68 76 145 12 38 66 145
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Value Fund............................ 67 82 99 194 17 52 89 194
CITISTREET FUNDS, INC.
CitiStreet Diversified Bond Fund............... 64 75 88 170 14 45 78 170
CitiStreet International Stock Fund............ 66 79 94 185 16 49 84 185
CitiStreet Large Company Stock Fund............ 65 77 91 177 15 47 81 177
CitiStreet Small Company Stock Fund............ 67 82 99 194 17 52 89 194
CITISTREET FUNDS, INC.*
CitiStreet Diversified Bond Fund*.............. 73 99 129 255 23 69 119 255
CitiStreet International Stock Fund*........... 74 103 136 269 24 73 126 269
CitiStreet Large Company Stock Fund*........... 73 101 132 262 23 71 122 262
CitiStreet Small Company Stock Fund*........... 75 106 140 278 25 76 130 278
CREDIT SUISSE WARBURG PINCUS TRUST
Emerging Markets Portfolio..................... 72 99 128 253 22 69 118 253
DELAWARE GROUP PREMIUM FUND
REIT Series.................................... 67 82 100 195 17 52 90 195
Small Cap Value Series......................... 67 82 100 195 17 52 90 195
DREYFUS VARIABLE INVESTMENT FUND
Appreciation Portfolio -- Initial Shares....... 66 80 96 188 16 50 86 188
Small Cap Portfolio -- Initial Shares.......... 66 80 96 188 16 50 86 188
GREENWICH STREET SERIES FUND
Appreciation Portfolio......................... 66 80 96 188 16 50 86 188
Equity Index Portfolio -- Class II Shares...... 63 71 81 157 13 41 71 157
Fundamental Value Portfolio.................... 66 80 97 189 16 50 87 189
JANUS ASPEN SERIES
Aggressive Growth Portfolio -- Service
Shares....................................... 67 84 103 203 17 54 93 203
Balanced Portfolio -- Service Shares........... 67 84 103 203 17 54 93 203
Worldwide Growth Portfolio -- Service Shares... 68 85 105 206 18 55 95 206
OCC ACCUMULATION TRUST
Equity Portfolio+.............................. 68 85 105 206 18 55 95 206
PIMCO VARIABLE INSURANCE TRUST
Total Return Bond Portfolio.................... 65 76 89 174 15 46 79 174
PUTNAM VARIABLE TRUST
Putnam VT International Growth Fund -- Class IB
Shares....................................... 70 92 117 232 20 62 107 232
Putnam VT Small Cap Value Fund -- Class IB
Shares....................................... 72 97 125 248 22 67 115 248
Putnam VT Voyager II Fund -- Class IB Shares... 71 94 120 238 21 64 110 238
SALOMON BROTHERS VARIABLE SERIES FUND INC.
Capital Fund................................... 68 87 107 212 18 57 97 212
Investors Fund................................. 67 84 103 202 17 54 93 202
Small Cap Growth Fund.......................... 73 102 133 264 23 72 123 264
Total Return Fund.............................. 68 87 107 212 18 57 97 212
SMITH BARNEY INVESTMENT SERIES
Smith Barney Large Cap Core Portfolio.......... 68 85 105 206 18 55 95 206
Smith Barney Premier Selection All Cap Growth
Portfolio.................................... 68 85 105 206 18 55 95 206
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Multi Cap Value Fund II................. 70 93 118 233 20 63 108 233
THE MONTGOMERY FUNDS III
Montgomery Variable Series: Growth Fund+....... 71 94 120 238 21 64 110 238
10
14
- ---------------------------------------------------------------------------------------------------------------------------------
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
- ---------------------------------------------------------------------------------------------------------------------------------
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Portfolio............ 67 83 101 199 17 53 91 199
Disciplined Small Cap Stock Portfolio+......... 68 87 107 212 18 57 97 212
Equity Income Portfolio........................ 66 81 98 192 16 51 88 192
Federated Stock Portfolio...................... 66 81 98 192 16 51 88 192
Large Cap Portfolio............................ 66 81 98 192 16 51 88 192
Lazard International Stock Portfolio........... 68 87 109 214 18 57 99 214
MFS Emerging Growth Portfolio.................. 67 82 100 197 17 52 90 197
MFS Mid Cap Growth Portfolio................... 67 84 102 201 17 54 92 201
MFS Research Portfolio......................... 67 84 103 203 17 54 93 203
Strategic Stock Portfolio+..................... 67 84 102 201 17 54 92 201
Social Awareness Stock Portfolio............... 66 79 94 185 16 49 84 185
Travelers Quality Bond Portfolio............... 63 71 81 156 13 41 71 156
U.S. Government Securities Portfolio........... 63 71 80 155 13 41 70 155
Utilities Portfolio............................ 67 83 102 200 17 53 92 200
TRAVELERS SERIES FUND INC.
AIM Capital Appreciation Portfolio............. 67 81 99 193 17 51 89 193
Alliance Growth Portfolio...................... 66 81 98 191 16 51 88 191
MFS Total Return Portfolio..................... 67 82 99 194 17 52 89 194
Putnam Diversified Income Portfolio............ 67 83 101 198 17 53 91 198
Smith Barney Aggressive Growth Portfolio....... 68 86 107 211 18 56 97 211
Smith Barney High Income Portfolio............. 65 76 90 175 15 46 80 175
International All Cap Growth Portfolio......... 68 86 106 209 18 56 96 209
Smith Barney Large Capitalization Growth
Portfolio.................................... 66 80 96 187 16 50 86 187
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth Portfolio Class II Shares...... 68 87 107 212 18 57 97 212
Enterprise Portfolio Class II Shares........... 67 82 100 195 17 52 90 195
VARIABLE ANNUITY PORTFOLIOS
Smith Barney Small Cap Growth Opportunities
Portfolio.................................... 67 84 102 201 17 54 92 201
VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Portfolio -- Service Class 2..... 67 83 101 199 17 53 91 199
Contrafund(R) Portfolio -- Service Class 2..... 67 84 102 201 17 54 92 201
VARIABLE INSURANCE PRODUCTS FUND III
Dynamic Capital Appreciation Portfolio --
Service Class 2.............................. 73 100 129 256 23 70 119 256
Mid Cap Portfolio -- Service Class 2........... 68 85 104 205 18 55 94 205
* Reflects expenses that would be incurred for those contract owners who
participate in the CHART Asset Allocation program.
+ No longer available to new contract owners.
11
15
EXAMPLE: OPTIONAL DEATH BENEFIT
You would pay the following expenses on a $1,000 investment, assuming a 5%
annual return on assets, purchase payment credits of 2%, and the charges
reflected in the expense table above using the expenses for the Optional Death
Benefit:
- ---------------------------------------------------------------------------------------------------------------------------------
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
- ---------------------------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund......................... 71 95 122 241 21 65 112 241
High Yield Bond Trust............................. 71 95 122 241 21 65 112 241
Managed Assets Trust.............................. 69 88 110 216 19 58 100 216
Money Market Portfolio............................ 67 82 100 195 17 52 90 195
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Value Fund............................ 71 95 122 242 21 65 112 242
CITISTREET FUNDS, INC.
CitiStreet Diversified Bond Fund............... 69 89 111 219 19 59 101 219
CitiStreet International Stock Fund............ 70 93 118 233 20 63 108 233
CitiStreet Large Company Stock Fund............ 70 91 114 225 20 61 104 225
CitiStreet Small Company Stock Fund............ 71 95 122 242 21 65 112 242
CITISTREET FUNDS, INC.*
CitiStreet Diversified Bond Fund*.............. 77 113 151 300 27 83 141 300
CitiStreet International Stock Fund*........... 78 117 158 313 28 87 148 313
CitiStreet Large Company Stock Fund*........... 78 115 154 306 28 85 144 306
CitiStreet Small Company Stock Fund*........... 79 119 162 321 29 89 152 321
CREDIT SUISSE WARBURG PINCUS TRUST
Emerging Markets Portfolio..................... 77 112 151 298 27 82 141 298
DELAWARE GROUP PREMIUM FUND
REIT Series.................................... 71 96 123 243 21 66 113 243
Small Cap Value Series......................... 71 96 123 243 21 66 113 243
DREYFUS VARIABLE INVESTMENT FUND
Appreciation Portfolio -- Initial Shares....... 71 94 119 236 21 64 109 236
Small Cap Portfolio -- Initial Shares.......... 71 94 119 236 21 64 109 236
GREENWICH STREET SERIES FUND
Appreciation Portfolio......................... 71 94 119 236 21 64 109 236
Equity Index Portfolio -- Class II Shares...... 68 85 105 206 18 55 95 206
Fundamental Value Portfolio.................... 71 94 120 237 21 64 110 237
JANUS ASPEN SERIES
Aggressive Growth Portfolio -- Service
Shares....................................... 72 98 126 250 22 68 116 250
Balanced Portfolio -- Service Shares........... 72 98 126 250 22 68 116 250
Worldwide Growth Portfolio -- Service Shares... 72 99 128 253 22 69 118 253
OCC ACCUMULATION TRUST
Equity Portfolio+.............................. 72 99 128 253 22 69 118 253
PIMCO VARIABLE INSURANCE TRUST
Total Return Bond Portfolio.................... 69 90 113 222 19 60 103 222
PUTNAM VARIABLE TRUST
Putnam VT International Growth Fund -- Class IB
Shares....................................... 75 106 140 278 25 76 130 278
Putnam VT Small Cap Value Fund -- Class IB
Shares....................................... 76 111 148 293 26 81 138 293
Putnam VT Voyager II Fund -- Class IB Shares... 75 108 143 284 25 78 133 284
SALOMON BROTHERS VARIABLE SERIES FUND INC.
Capital Fund................................... 73 100 130 258 23 70 120 258
Investors Fund................................. 72 98 126 249 22 68 116 249
Small Cap Growth Fund.......................... 78 115 155 308 28 85 145 308
Total Return Fund.............................. 73 100 130 258 23 70 120 258
SMITH BARNEY INVESTMENT SERIES
Smith Barney Large Cap Core Portfolio.......... 72 99 128 253 22 69 118 253
Smith Barney Premier Selection All Cap Growth
Portfolio.................................... 72 99 128 253 22 69 118 253
STRONG VARIABLE INSURANCE FUNDS, INC.
Strong Multi Cap Value Fund II................. 75 106 141 279 25 76 131 279
THE MONTGOMERY FUNDS III
Montgomery Variable Series: Growth Fund+....... 75 108 143 284 25 78 133 284
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Portfolio............ 72 97 124 246 22 67 114 246
Disciplined Small Cap Stock Portfolio+......... 73 100 130 258 23 70 120 258
Equity Income Portfolio........................ 71 95 121 240 21 65 111 240
Federated Stock Portfolio...................... 71 95 121 240 21 65 111 240
Large Cap Portfolio............................ 71 95 121 240 21 65 111 240
Lazard International Stock Portfolio........... 73 101 132 261 23 71 122 261
MFS Emerging Growth Portfolio.................. 71 96 123 244 21 66 113 244
MFS Mid Cap Growth Portfolio................... 72 97 125 248 22 67 115 248
MFS Research Portfolio......................... 72 98 126 250 22 68 116 250
Strategic Stock Portfolio+..................... 72 97 125 248 22 67 115 248
Social Awareness Stock Portfolio............... 70 93 118 233 20 63 108 233
Travelers Quality Bond Portfolio............... 68 85 104 205 18 55 94 205
U.S. Government Securities Portfolio........... 68 84 104 204 18 54 94 204
Utilities Portfolio............................ 72 97 125 247 22 67 115 247
12
16
- ---------------------------------------------------------------------------------------------------------------------------------
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
- ---------------------------------------------------------------------------------------------------------------------------------
TRAVELERS SERIES FUND INC.
AIM Capital Appreciation Portfolio............. 71 95 122 241 21 65 112 241
Alliance Growth Portfolio...................... 71 95 121 239 21 65 111 239
MFS Total Return Portfolio..................... 71 95 122 242 21 65 112 242
Putnam Diversified Income Portfolio............ 72 96 124 245 22 66 114 245
Smith Barney Aggressive Growth Portfolio....... 73 100 130 257 23 70 120 257
Smith Barney High Income Portfolio............. 69 90 113 223 19 60 103 223
International All Cap Growth Portfolio......... 73 100 129 256 23 70 119 256
Smith Barney Large Capitalization Growth
Portfolio.................................... 71 93 119 235 21 63 109 235
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth Portfolio Class II Shares...... 73 100 130 258 23 70 120 258
Enterprise Portfolio Class II Shares........... 71 96 123 243 21 66 113 243
VARIABLE ANNUITY PORTFOLIOS
Smith Barney Small Cap Growth Opportunities
Portfolio.................................... 72 97 125 248 22 67 115 248
VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Portfolio -- Service Class 2..... 72 97 124 246 22 67 114 246
Contrafund(R) Portfolio -- Service Class 2..... 72 97 125 248 22 67 115 248
VARIABLE INSURANCE PRODUCTS FUND III
Dynamic Capital Appreciation Portfolio --
Service Class 2.............................. 77 113 152 301 27 83 142 301
Mid Cap Portfolio -- Service Class 2........... 72 99 127 252 22 69 117 252
* Reflects expenses that would be incurred for those contract owners who
participate in the CHART Asset Allocation program.
+ No longer available to new contract owners.
13
17
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
See Appendices A and B.
THE ANNUITY CONTRACT
- --------------------------------------------------------------------------------
Travelers Retirement Account is a contract between the contract owner ("you")
and the Company. We describe your rights and benefits in this prospectus and in
the Contract. There may be differences in your Contract because of the
requirements of the state where we issued your Contract. We will include any
such differences in your Contract.
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, and one Fixed Account option. The contract owner assumes the
risk of gain or loss according to the performance of the variable funding
options. The contract value is the amount of purchase payments and any
applicable purchase payment credits, 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.
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. The initial purchase payment must be at least $20,000. You may make
additional payments of at least $5,000 at any time. Under certain circumstances,
we may waive the minimum purchase payment requirement. Purchase payments over
$1,000,000 may be made only with our prior consent.
We will apply the initial purchase payment less any applicable premium tax (net
purchase payment) 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).
Purchase payments allocated to the Fixed Account are not eligible for purchase
payment credits.
PURCHASE PAYMENT CREDITS
If, for an additional charge, you select the Optional Death Benefit, we will add
a credit to your Contract with each purchase payment. Each credit is added to
the contract value when the corresponding purchase payment is applied, and will
equal 2% of each purchase payment. These credits are applied pro rata to the
same funding options to which your purchase payment was applied. Purchase
payments allocated to the Fixed Account are not eligible for purchase payment
credits.
14
18
You should know that over time and under certain circumstances (such as a period
of poor market performance) the costs associated with the purchase payment
credits may exceed the sum of the purchase payment credits and related earnings.
You should consider this possibility before purchasing the Contract.
CONSERVATION CREDIT
If you are purchasing this Contract with funds from another Contract issued by
us or our affiliates, you may receive a conservation credit to your purchase
payments. If applied, we will determine the amount of such credit.
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. An accumulation unit works like a share of a
mutual fund. Each funding option has a corresponding accumulation unit value.
The accumulation units are valued each business day and their values may
increase or decrease from day to day. The number of accumulation units we will
credit to your Contract once we receive a purchase payment is determined by
dividing the amount directed to each funding option by the value of its
accumulation unit. We calculate the value of an accumulation unit for each
funding option each day the New York Stock Exchange is open. The values are
calculated as of 4:00 p.m. Eastern time. After the value is calculated, we
credit your Contract. During the annuity period (i.e., after the maturity date),
you are credited with annuity units.
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. You will find detailed information about the
funds and their inherent risks in the current fund prospectuses for the
underlying funds that must accompany this prospectus. Since each option has
varying degrees of risk, please read the prospectuses carefully before
investing. 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 additional copies of the prospectuses.
The Company has entered into agreements with either the investment adviser or
distributor of certain of the underlying funds in which the adviser or
distributor pays us a fee for providing administrative services, which fee may
vary. The fee is ordinarily based upon an annual percentage of the average
aggregate net amount invested in the underlying funds on behalf of the Separate
Account. In addition, an affiliated broker-dealer will receive 12b-1 fees
deducted from certain underlying fund assets for providing distribution,
shareholder support and administrative services to some of the underlying funds.
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.
15
19
The current variable funding options are listed below, along with their
investment advisers and any subadviser.
FUNDING OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
- -------------------------------------------------------------------------------------------------------------------
Capital Appreciation Fund Seeks growth of capital through the use of Travelers Asset Management
common stocks. Income is not an objective. International Company LLC
The Fund invests principally in common stocks ("TAMIC")
of small to large companies which are Subadviser: Janus Capital Corp.
expected to experience wide fluctuations in
price both in rising and declining markets.
High Yield Bond Trust* Seeks generous income. The assets of the High TAMIC
Yield Bond Trust will be invested in bonds
which, as a class, sell at discounts from par
value and are typically high risk securities.
Managed Assets Trust** Seeks high total investment return through a TAMIC
fully managed investment policy in a Subadviser: Travelers
portfolio of equity, debt and convertible Investment Management Company
securities. ("TIMCO")
Money Market Portfolio* Seeks high current income from short-term TAMIC
money market instruments while preserving
capital and maintaining a high degree of
liquidity.
AIM VARIABLE INSURANCE FUNDS, INC.
AIM V.I. Value Fund Seeks to achieve long-term growth of capital AIM Advisers, Inc. ("AIM")
by investing primarily in equity securities
of undervalued companies. Income is a
secondary objective.
CITISTREET FUNDS, INC.
Diversified Bond Fund* Seeks maximum long-term total return (capital CitiStreet Funds Management,
appreciation and income) by investing Inc. ("CitiStreet")
primarily in fixed income securities. Subadviser: Western Asset
Management Company; Salomon
Brothers Asset Management
("SBAM"); and SSgA Funds
Management, Inc. ("SSgA")
International Stock Fund Seeks maximum long-term total return (capital CitiStreet
appreciation and income) by investing Subadviser: Bank of Ireland
primarily in common stocks of established Asset Management (U.S.)
non-U.S. companies. Limited; Smith Barney Fund
Management Inc. ("SBFM") and
SSgA
Large Company Stock Fund Seeks maximum long-term total return (capital CitiStreet
appreciation and income) by investing Subadvisers Equinox Capital
primarily in common stocks of Management, L.L.C.; Putnam
well-established companies. Investment Management Ind.; and
SSgA
Small Company Stock Fund Seeks maximum long-term total return (capital CitiStreet
appreciation and income) by investing Subadviser: Cowen Asset
primarily in common stocks of small Management; SBAM and SSgA
companies.
DELAWARE GROUP PREMIUM FUND
REIT Series** Seeks maximum long-term total return by Delaware Management Company,
investing in securities of companies Inc.
primarily engaged in the real estate Subadviser: Lincoln Investment
industry. Capital appreciation is a secondary Management, Inc.
objective.
Small Cap Value Series Seeks capital appreciation by investing in Delaware Management Company,
small to mid-cap common stocks whose market Inc.
value appears low relative to their Subadviser: Lincoln Investment
underlying value or future earnings and Management, Inc.
growth potential. Emphasis will also be
placed on securities of companies that may be
temporarily out of favor or whose value is
not yet recognized by the market.
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FUNDING OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
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DREYFUS VARIABLE INVESTMENT FUND
Appreciation Portfolio -- Seeks primarily to provide long-term capital The Dreyfus Corporation
Initial Class growth consistent with the preservation of Subadviser: Fayez Sarofim & Co.
capital; current income is a secondary
investment objective. The portfolio invests
primarily in the common stocks of domestic
and foreign insurers.
Small Cap Portfolio -- Initial Seeks to maximize capital appreciation. The Dreyfus Corporation
Class
GREENWICH STREET SERIES FUND
Appreciation Portfolio Seeks long term appreciation of capital by SBFM
investing primarily in equity securities.
Equity Index Portfolio Class II Seeks to replicate, before deduction of TIMCO
Shares expenses, the total return performance of the
S&P 500 Index.
Fundamental Value Portfolio** SBFM
JANUS ASPEN SERIES
Aggressive Growth Portfolio -- Seeks long-term capital growth by investing Janus Capital
Service Shares primarily in common stocks selected for their
growth potential, normally investing at least
50% in the equity assets of medium-sized
companies.
Balanced Portfolio -- Service Seeks long-term capital growth, consistent Janus Capital
Shares with preservation of capital and balanced by
current income.
Worldwide Growth Portfolio -- Seeks growth of capital in a manner Janus Capital
Service Shares consistent with preservation of capital by
investing primarily in common stocks of
companies of any size throughout the world.
PIMCO VARIABLE INSURANCE TRUST
Total Return Bond Portfolio Seeks maximum total return, consistent with Pacific Investment Management
preservation of capital and prudent Company
investment management, by investing primarily
in investment-grade debt securities.
PUTNAM VARIABLE TRUST
Putnam VT International Growth Seeks capital appreciation by investing Putnam Management ("Putnam")
Fund -- Class IB Shares mostly in common stocks of companies outside
the United States.
Putnam VT Small Cap Value Seeks capital appreciation by investing Putnam
Fund -- Class IB Shares mainly in common stocks of U.S. companies
with a focus on value stocks.
Putnam VT Voyager II Fund -- Seeks capital appreciation by investing Putnam
Class IB Shares mainly in common stocks of U.S. companies
with a focus on growth stocks.
SALOMON BROTHERS VARIABLE SERIES
FUND, INC.
Capital Fund Seeks capital appreciation, primarily through SBAM
investments in common stocks which are
believed to have above-average price
appreciation potential and which may involve
above average risk.
Investors Fund Seeks long-term growth of capital, and, SBAM
secondarily, current income, through
investments in common stocks of well-known
companies.
Small Cap Growth Fund Seeks long-term growth of capital by SBAM
investing primarily in equity securities of
companies with market capitalizations similar
to that of companies included in the Russell
2000 Index.
Total Return Fund** Seeks above-average income (compared to a SBAM
portfolio invested entirely in equity
securities). Secondarily, seeks opportunities
for growth of capital and income.
SMITH BARNEY INVESTMENT SERIES
Large Cap Core Portfolio Seeks long term growth of capital by Travelers Investment Advisers
investing in a select group of mutual funds. ("TIA")
Premier Selection All Cap SBFM
Portfolio
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FUNDING OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
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STRONG VARIABLE INSURANCE FUNDS,
INC.
Strong Multi Cap Value Fund II Seeks long-term capital appreciation. Current Strong Capital Management Inc.
income is a secondary objective when Subadviser: Schafer Capital
selecting investments The goal is to identify Management, Inc.
stocks that provide above-average earnings
growth prospects at a price-to-earnings ratio
lower than that of the S&P 500.
TRAVELERS SERIES FUND INC.
AIM Capital Appreciation Seeks capital appreciation by investing TIA
Portfolio principally in common stock, with emphasis on Subadviser: AIM Capital
medium-sized and smaller emerging growth Management, Inc.
companies.
Alliance Growth Portfolio Seeks long-term growth of capital. Current TIA
income is only an incidental consideration. Subadviser: Alliance Capital
The Portfolio invests predominantly in equity Management L.P.
securities of companies with a favorable
outlook for earnings and whose rate of growth
is expected to exceed that of the U.S.
economy over time.
MFS Total Return Portfolio** (a balanced portfolio) Seeks to obtain above- TIA
average income (compared to a portfolio Subadviser: Massachusetts
entirely invested in equity securities) Financial Services ("MFS")
consistent with the prudent employment of
capital. Generally, at least 40% of the
Portfolio's assets are invested in equity
securities.
Putnam Diversified Income Seeks high current income consistent with TIA
Portfolio* preservation of capital. The Portfolio will Subadviser: Putnam Investment
allocate its investments among the U.S. Management, Inc.
Government Sector, the High Yield Sector, and
the International Sector of the fixed income
securities markets.
Smith Barney Aggressive Growth Seeks capital appreciation by investing SBFM
Portfolio primarily in common stocks of companies that
are experiencing, or have the potential to
experience, growth of earnings, or that
exceed the average earnings growth rate of
companies whose securities are included in
the S&P 500.
Smith Barney High Income Seeks high current income. Capital SBFM
Portfolio* appreciation is a secondary objective. The
Portfolio will invest at least 65% of its
assets in high-yielding corporate debt
obligations and preferred stock.
Smith Barney International All Seeks total return on assets from growth of SBFM
Cap Growth Portfolio capital and income by investing at least 65%
of its assets in a diversified portfolio of
equity securities of established non-U.S.
issuers.
Smith Barney Large Capitalization Seeks long-term growth of capital by SBFM
Growth Portfolio investing in equity securities of companies
with large market capitalizations.
THE TRAVELERS SERIES TRUST
Disciplined Mid Cap Stock Seeks growth of capital by investing TAMIC
Portfolio primarily in a broadly diversified portfolio Subadviser: TIMCO
of U.S. common stocks.
Disciplined Small Cap Stock Seeks long term capital appreciation by TAMIC Subadviser: TIMCO
Portfolio+ investing primarily (at least 65% of its
total assets) in the common stocks of U.S.
companies with relatively small market
capitalizations at the time of investments.
Equity Income Portfolio Seeks reasonable income by investing at least TAMIC
65% in income-producing equity securities. Subadviser: Fidelity Management
The balance may be invested in all types of & Research Co ("FMR")
domestic and foreign securities, including
bonds. The Portfolio seeks to achieve a yield
that exceeds that of the securities
comprising the S&P 500. The Subadviser also
considers the potential for capital
appreciation.
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FUNDING OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
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THE TRAVELERS SERIES TRUST
(CONT.)
Federated Stock Portfolio Seeks growth of income and capital by TAMIC
investing principally in a professionally Subadviser: Federated
managed and diversified portfolio of common Investment Counseling, Inc.
stock of high-quality companies (i.e.,
leaders in their industries and characterized
by sound management and the ability to
finance expected growth).
Large Cap Portfolio Seeks long-term growth of capital by TAMIC
investing primarily in equity securities of Subadviser: FMR
companies with large market capitalizations.
Lazard International Stock Seeks capital appreciation by investing TAMIC
Portfolio primarily in the equity securities of Subadviser: Lazard Asset
non-United States companies (i.e., Management
incorporated or organized outside the United
States).
MFS Emerging Growth Portfolio Seeks to provide long-term growth of capital. TAMIC
Dividend and interest income from portfolio Subadviser: MFS
securities, if any, is incidental to the MFS
Portfolio's investment objective.
MFS Mid Cap Growth Portfolio Seeks to obtain long-term growth of capital TAMIC
by investing, under normal market conditions, Subadviser: MFS
at least 65% of its total assets in equity
securities of companies with medium market
capitalization which the investment adviser
believes have above-average growth potential.
MFS Research Portfolio Seeks to provide long-term growth of capital TAMIC
and future income. Subadviser: MFS
Social Awareness Stock Portfolio Seeks long-term capital appreciation and SBFM
retention of net investment income by
selecting investments, primarily common
stocks, which meet the social criteria
established for the Portfolio. Social
criteria currently excludes companies that
derive a significant portion of their
revenues from the production of tobacco,
tobacco products, alcohol, or military
defense systems, or in the provision of
military defense related services or gambling
services.
Strategic Stock Portfolio+ Seeks to provide an above-average total TAMIC Subadviser: TIMCO
return through a combination of potential
capital appreciation and dividend income by
investing primarily in high dividend-yielding
stocks periodically selected from the
companies included in (i) the Dow Jones
Industrial Average and (ii) a subset of the
S&P Industrial Index.
Travelers Quality Bond Portfolio* Seeks current income, moderate capital TAMIC
volatility and total return.
U.S. Government Securities Seeks to select investments from the point of TAMIC
Portfolio* view of an investor concerned primarily with
the highest credit quality, current income
and total return. The assets of the Portfolio
will be invested in direct obligations of the
United States, its agencies and
instrumentalities.
Utilities Portfolio** Seeks to provide current income by investing SBFM
in equity and debt securities of companies in
the utilities industries.
VAN KAMPEN LIFE INVESTMENT TRUST
Emerging Growth Portfolio -- Seeks capital appreciation by investing Van Kampen Asset Management,
Class II Shares primarily in common stocks of companies Inc.
considered to be emerging growth companies. ("VKAM")
Enterprise Portfolio -- Class II Seeks capital appreciation through VKAM
Shares investments believed by the Adviser to have
above-average potential for capital
appreciation.
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FUNDING OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
- -------------------------------------------------------------------------------------------------------------------
VARIABLE ANNUITY PORTFOLIOS
Smith Barney Small Cap Growth Seeks high total return with reduced risk Citi Mutual Fund Management,
Opportunities Portfolio over the long-term by allocating its assets Inc.
among stocks, bonds and short-term
fixed-income instruments.
VARIABLE INSURANCE PRODUCTS FUND II
Asset Manager Seeks high total return with reduced risk FMR
Portfolio -- Service Class 2** over the long-term by allocating its assets
among stocks, bonds and short-term
fixed-income instruments.
Contrafund(R) Seeks long-term capital appreciation by FMR
Portfolio -- Service Class 2 investing primarily in common stocks of
companies whose value the adviser believes is
not fully recognized by the public.
VARIABLE INSURANCE PRODUCTS III
Dynamic Capital Appreciation Seeks capital appreciation by investing FMR
Portfolio -- Service Class 2 primarily in common stocks of both domestic
and foreign issuers.
Mid Cap Portfolio -- Service Seeks long-term growth of capital and income FMR
Class 2 by investing primarily in income-producing
equity securities, including common stocks
and convertible securities.
CREDIT SUISSE WARBURG PINCUS TRUST
Emerging Markets Portfolio Seeks long-term growth of capital by Credit Suisse Asset Management,
investing primarily in equity securities of LLC
non-U.S. issuers consisting of companies in
emerging securities markets.
Before the end of 2001, we anticipate substituting shares of a new portfolio for
the following portfolios currently available in your Contract. You should know,
however, that we cannot proceed with the proposed substitutions until we receive
certain regulatory approvals, and that details of the substitutions, including
the new portfolio to be offered, may change. We will notify you of the final
details, including the approximate date, before the substitution occurs, and
notify you after the substitution has happened. Also, we will send you the
current prospectus for the new funding option before the substitution occurs.
FUNDING OPTION INVESTMENT OBJECTIVE INVESTMENT ADVISER/SUBADVISER
- -------------------------------------------------------------------------------------------------------------------
MONTGOMERY FUNDS III
Montgomery Variable Series: Seeks capital appreciation by investing Montgomery Asset Management
Growth Fund+ primarily in equity securities, usually
common stock, of domestic companies of all
sizes, and emphasizes companies having market
capitalizations of $1 billion or more.
OCC ACCUMULATION TRUST
Equity Portfolio+ Seeks long-term capital appreciation through OP Cap Advisors
investment in securities (primarily equity
securities) of companies that are believed by
the adviser to be undervalued in the
marketplace in relation to factors such as
the companies' assets or earnings.
* The funding options marked with an asterisk (*) are considered competing
funds, and may be subject to transfer restrictions. Those marked with two
asterisks (**) are not currently considered competing funds, but may be so in
the future because of an allowable change in the funding option's investment
strategy. Please refer to the contract for transfer restrictions.
+ Not available to new contract owners as of May 1, 2001.
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FIXED ACCOUNT
- --------------------------------------------------------------------------------
We offer a Fixed Account as a funding option. Please see separate prospectus 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:
- the ability for you to make withdrawals and surrenders under the
Contracts;
- the death benefit paid on the death of the contract owner, annuitant, or
first of the joint owners,
- the available funding options and related programs (including dollar-cost
averaging, portfolio rebalancing, and systematic withdrawal programs);
- administration of the annuity options available under the Contracts; and
- the distribution of various reports to contract owners.
Costs and expenses we incur include:
- losses associated with various overhead and other expenses associated
with providing the services and benefits provided by the Contracts,
- sales and marketing expenses including commission payments to your sales
agent, and
- other costs of doing business.
Risks we assume include:
- that annuitants may live longer than estimated when the annuity factors
under the Contracts were established;
- that the amount of the death benefit will be greater than the contract
value or the maximum of all Step-Up values under the Optional Death
Benefit, and
- that the costs of providing the services and benefits under the Contracts
will exceed the charges deducted.
We may also deduct a charge for taxes.
Unless otherwise specified, charges are deducted proportionately from all
funding options in which you are invested.
We may reduce or eliminate the withdrawal charge, the administrative charges
and/or the mortality and expense risk charge under the Contract when certain
sales or administration of the Contract result in savings or reduced expenses
and/or risks. For certain trusts, we may change the order in which purchase
payments and earnings are withdrawn in order to determine the withdrawal charge.
We will not reduce or eliminate the withdrawal charge or the administrative
charge where such reduction or elimination would be unfairly discriminatory to
any person.
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.) 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 will apply if purchase payments and any
applicable purchase payment credits are withdrawn before they have been in the
Contract for ten years. We will assess the charge as a percentage of the
purchase payment and any applicable purchase payment credits withdrawn as
follows:
YEARS SINCE PURCHASE WITHDRAWAL
PAYMENT MADE CHARGE
0-1 5%
2 4%
3 3%
4 2%
5 1%
6 or more 0%
For purposes of the withdrawal charge calculation, withdrawals are deemed to be
taken first from:
(a) any purchase payment and any applicable purchase payment credits to
which no withdrawal charge applies, then
(b) any remaining free withdrawal allowance (as described below) (after
being reduced by (a)), then
(c) any purchase payment and any applicable purchase payment credits to
which a withdrawal charge applies (on a first-in, first-out basis),
then
(d) any Contract earnings.
Unless you instruct us otherwise, we will deduct the withdrawal charge from the
amount requested.
IF YOU DID NOT PURCHASE YOUR CONTRACT UNDER A 457 OR 403(B) QUALIFIED PLAN, we
will not deduct a withdrawal charge:
- from payments we make due to the death of the annuitant;
- if a life annuity payout has begun, other than the Liquidity Benefit
Option (See "Liquidity Benefit");
- if an income option of at least ten years' duration is elected;
- from amounts withdrawn which are deposited to other contracts issued by
us or our affiliate, subject to our approval;
- if withdrawals are taken under our Managed Distribution Program, if
elected by you (see "Access to Your Contract Values"); or
- if you are confined to an Eligible Nursing Home, as described in Appendix
C.
IF YOU PURCHASED YOUR CONTRACT UNDER A 457 OR 403(B) QUALIFIED PLAN, we will not
deduct a withdrawal charge:
- from payments we make due to the death of the annuitant;
- if a life annuity payout has begun;
- if payments for a period of at least five years have begun;
- from amounts withdrawn which are deposited to other contracts issued by
us or our affiliate, subject to our approval;
- if withdrawals are taken as a minium distribution, as defined under The
Code;
- if withdrawals are taken due to a hardship, as defined under The Code;
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- if withdrawals are taken due to a disability, as defined under The Code,
of the annuitant;
- (403(b) PLANS ONLY) if you are confined to an Eligible Nursing Home, as
described in Appendix C.
FREE WITHDRAWAL ALLOWANCE
Subject to the provisions of the Internal Revenue code, you may withdraw up to
20% 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.
TRANSFER CHARGE
We reserve the right to assess a transfer charge of up to $10.00 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.
MORTALITY AND EXPENSE RISK CHARGE
Each business day, we deduct a mortality and expense risk ("M&E") charge from
amounts we hold in the variable funding options. We reflect the deduction in our
calculation of accumulation and annuity unit values. The charges stated are the
maximum for this product. We reserve the right to lower this charge at any time.
If you choose the Standard Death Benefit, the M&E charge is 0.80% annually. If
you choose the Optional Death Benefit, the M&E charge is 1.25% annually. This
charge compensates us for risks assumed, benefits provided and expenses
incurred, including the payment of commissions to your sales agent.
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.
FLOOR BENEFIT/LIQUIDITY BENEFIT CHARGES
If you select the Variable Annuitization Floor Benefit, we deduct a charge upon
election of this benefit. This charge compensates us for guaranteeing a minimum
variable annuity payment regardless of the performance of the variable funding
options you selected. This charge will vary based upon market conditions, but
will never increase your annual separate account charge by more than 3%. The
charge will be set at the time of election, and will remain level throughout the
term of annuitization. If the Liquidity Benefit is selected, there is a
surrender charge of 5% of the amounts withdrawn. Please refer to "The Annuity
Period" for a description of these benefits.
CHART ASSET ALLOCATION PROGRAM CHARGES
Under the CHART Program, purchase payments and cash values are allocated among
the specified asset allocation funds. The charge for this advisory service is
equal to a maximum of 0.80% of the assets subject to the CHART Program. The
CHART Program fee will be paid by quarterly withdrawals from the cash values
allocated to the asset allocation funds. We will not treat these withdrawals as
taxable distributions. Please refer to "Miscellaneous Contract Provisions" for
further information.
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.
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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.
TRANSFERS
- --------------------------------------------------------------------------------
Up to 30 days before the maturity date, you may transfer all or part of the
contract value between variable funding options. We will make transfers at the
value(s) next determined after we receive your request at our Home Office. There
are no charges or restrictions on the amount or frequency of transfers
currently; however, we reserve the right to charge a fee for any transfer
request, and to limit the number of transfers to one in any six-month period. We
also reserve the right to restrict transfers by any market timing firm or any
other third party authorized to initiate transfers on behalf of multiple
contract owners. We may, among other things, not accept: 1) the transfer
instructions of any agent acting under a power of attorney on behalf of more
than one owner, or 2) the transfer or exchange instructions of individual owners
who have executed pre-authorized transfer forms which are submitted by market
timing firms or other third parties on behalf of more than one owner. We further
reserve the right to limit transfers that we determine will disadvantage other
contract owners.
Since different underlying funds have different 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, you should
consider the inherent risks involved in making transfers. Frequent transfers
based on short-term expectations may increase the risk that you will make a
transfer at an inopportune time.
After the maturity date, you may make transfers between funding options only
with our consent.
Please refer to your Contract for restrictions on transfers to and from the
Fixed Account.
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.
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, 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 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
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months on funds 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 Travelers. If
complete Program enrollment instructions are not received by the Company within
15 days of receipt of the initial Program purchase payment, the entire balance
in the Program will be credited with the non-Program interest rate then in
effect for the Fixed Account.
You may start or stop participation in the DCA Program at any time, but you must
give the Company at least 30 days' notice to change any automated transfer
instructions that are currently in place. If you stop the Special DCA Program
and elect to remain in the Fixed Account, 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 otherwise direct.
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. We reserve the right to suspend or modify transfer privileges at any
time and to assess a processing fee for this service.
ACCESS TO YOUR MONEY
- --------------------------------------------------------------------------------
Any time before the maturity date, you may redeem all or any portion of the cash
surrender value, that is, the contract value less any withdrawal charge and any
premium tax not previously deducted. Unless you submit a written request
specifying the fixed or variable funding option(s) from which we are to withdraw
amounts, we will make the withdrawal on a pro rata basis. We will determine the
cash surrender value as of the close of business after we receive your surrender
request at our Home Office. The cash surrender value may be more or less than
the purchase payments you made. You may not make withdrawals during the annuity
period.
We may defer payment of any cash surrender value for a period of up to seven
days after the written request is received, but it is our intent to pay as soon
as possible. We cannot process requests for 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.
SYSTEMATIC WITHDRAWALS
Before the maturity date, you may choose to withdraw a specified dollar amount
(at least $100) on a monthly, quarterly, semiannual or annual basis. We will
deduct any applicable premium taxes and withdrawal charge. To elect systematic
withdrawals, you must have a contract value of at least $15,000 and you must
make the election on the form we provide . We will surrender accumulation units
pro rata from all investment 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
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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.
OWNERSHIP PROVISIONS
- --------------------------------------------------------------------------------
TYPES OF OWNERSHIP
Contract Owner (you). The Contract belongs to the contract owner named in the
Contract (on the Specifications page). The annuitant is the individual upon
whose life the maturity date and the amount of monthly annuity payments depend.
Because this is a qualified contract, the owner and the annuitant must always be
the same person, and there can be only one contract owner. You have sole power
to exercise any rights and to receive all benefits given in the Contract
provided you have not named an irrevocable beneficiary.
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.
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.
DEATH BENEFIT
- --------------------------------------------------------------------------------
Before the maturity date, a death benefit is payable when you die. At purchase,
you elect either the Standard Death Benefit or the Optional 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
("death report date").
For both the Standard and Optional Death Benefit, we must be notified of your
death no later than six months from the date of death in order to pay the death
proceeds as described under "Death Proceeds Before the Maturity Date." If we are
notified more than six months after the death, we will pay death proceeds equal
to the contract value on the death report date, less any applicable premium tax.
DEATH PROCEEDS BEFORE THE MATURITY DATE
STANDARD DEATH BENEFIT
- ----------------------------------------------------------------------------------------------
ANNUITANT'S AGE DEATH BENEFIT PAYABLE
ON THE CONTRACT DATE (CALCULATED AS OF THE DEATH REPORT DATE)
- ----------------------------------------------------------------------------------------------
Before Age 80 Greater of:
1. Contract value, or
2. Total purchase payments less any withdrawals (and related
charges).
- ----------------------------------------------------------------------------------------------
On or after Age 80 Contract value.
- ----------------------------------------------------------------------------------------------
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OPTIONAL DEATH BENEFIT AND CREDIT
The Optional Death Benefit and Credit varies depending on the annuitant's age on
the contract date:
- ----------------------------------------------------------------------------------------------
ANNUITANT'S AGE DEATH BENEFIT PAYABLE
ON THE CONTRACT DATE (CALCULATED AS OF THE DEATH REPORT DATE)
- ----------------------------------------------------------------------------------------------
Under Age 70 Greater of:
1. Contract value, or
2. Total purchase payments less any withdrawals (and related
charges); or
3. Maximum Step-Up death benefit value (described below)
associated with contract date anniversaries beginning with
the 5(th), and ending with the last before the
annuitant's 76(th) birthday.
- ----------------------------------------------------------------------------------------------
Age 70-75 Greater of:
1. Contract value, or
2. Total purchase payments less any withdrawals (and related
charges); or
3. Step-Up death benefit value (described below) associated
with the 5(th) contract date anniversary
- ----------------------------------------------------------------------------------------------
Age 76-80 Greater of (1) or (2) above.
- ----------------------------------------------------------------------------------------------
Age over 80 Contract value.
- ----------------------------------------------------------------------------------------------
STEP-UP DEATH BENEFIT VALUE
We will establish a separate Step-Up death benefit value on the fifth contract
date anniversary and on each subsequent contract date anniversary on or before
the death report date and will initially equal the contract value on that
anniversary. After a Step-Up death benefit value has been established, we will
recalculate it each time a purchase payment is made or a withdrawal is taken
until the death report date. We will recalculate Step-Up death benefit values by
increasing them by the amount of each applicable purchase payment and by
reducing them by a partial surrender reduction (as described below) for each
applicable withdrawal. Recalculations of Step-Up death benefit values related to
any purchase payments or any withdrawals will be made in the order that such
purchase payments or partial surrender reductions occur.
PARTIAL SURRENDER REDUCTION. If you make a withdrawal, we will reduce the
Step-Up value by a partial surrender reduction which equals: (1) the step-up
value, multiplied by (2) the amount of the withdrawal, divided by (3) the
contract value before the withdrawal.
For example, assume your current contract value is $55,000. If your original
step-up value is $50,000, and you decide to make a withdrawal of $10,000, we
would reduce the step-up value as follows:
50,000 x (10,000/55,000) = 9,090
Your new step-up value would be 50,000-9,090, or $40,910.
The following example shows what would happen in a declining market. Assume your
current contract value is $30,000. If your original step-up value is $50,000,
and you decide to make a withdrawal of $10,000, we would reduce the step-up
value as follows:
50,000 X (10,000/30,000) = 16,666
Your new step-up value would be 50,000-16,666, or $33,334.
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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NONQUALIFIED CONTRACTS
BEFORE THE MATURITY DATE, UPON THE COMPANY WILL PAY THE UNLESS... MANDATORY PAYOUT
THE DEATH OF THE PROCEEDS TO: RULES
APPLY*
- --------------------------------------------------------------------------------------------------------------
OWNER (WHO IS NOT THE The beneficiary(ies), or Unless the beneficiary is the Yes
ANNUITANT) (WITH NO JOINT if none, to the contract contract owner's spouse and
OWNER) owner's estate. the spouse elects to continue
the contract as the new owner
rather than receive the
distribution.
- --------------------------------------------------------------------------------------------------------------
OWNER (WHO IS THE ANNUITANT) The beneficiary(ies), or Unless the beneficiary is the Yes
(WITH NO JOINT OWNER) if none, to the contract contract owner's spouse and
owner's estate. the spouse elects to continue
the contract as the new owner
rather than receive the
distribution.
- --------------------------------------------------------------------------------------------------------------
JOINT OWNER (WHO IS NOT THE The surviving joint Unless the surviving joint Yes
ANNUITANT) owner. owner is the spouse and
elects to continue the
contract.
- --------------------------------------------------------------------------------------------------------------
JOINT OWNER (WHO IS THE The beneficiary(ies), or Unless the beneficiary is the Yes
ANNUITANT) if none, to the contract contract owner's spouse and
owner's estate. the spouse elects to continue
the contract.
Or, unless there is a
contingent annuitant the
contingent annuitant becomes
the annuitant and the
proceeds will be paid to the
surviving joint owner. If the
surviving joint owner is the
spouse, the spouse may elect
to continue the contract.
- --------------------------------------------------------------------------------------------------------------
ANNUITANT (WHO IS NOT THE The beneficiary(ies). Unless there is a contingent No
CONTRACT OWNER) annuitant. Then, the
contingent annuitant becomes
the annuitant and the
Contract continues in effect
(generally using the original
maturity date). The proceeds
will then be paid upon the
death of the contingent
annuitant or owner.
- --------------------------------------------------------------------------------------------------------------
ANNUITANT (WHO IS THE CONTRACT See death of "owner who N/A
OWNER) is the annuitant" above.
- --------------------------------------------------------------------------------------------------------------
ANNUITANT (WHERE OWNER IS A The beneficiary(ies) Yes (Death of
NONNATURAL PERSON/TRUST) (e.g. the trust). annuitant is
treated as death
of the owner in
these
circumstances.)
- --------------------------------------------------------------------------------------------------------------
CONTINGENT ANNUITANT (ASSUMING No death proceeds are N/A
ANNUITANT IS STILL ALIVE) payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
BENEFICIARY No death proceeds are N/A
payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
CONTINGENT BENEFICIARY No death proceeds are N/A
payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
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* 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.
QUALIFIED CONTRACTS
- --------------------------------------------------------------------------------------------------------------
BEFORE THE MATURITY DATE, UPON THE COMPANY WILL PAY THE UNLESS... MANDATORY PAYOUT
THE DEATH OF THE PROCEEDS TO: RULES APPLY
(SEE * ABOVE)
- --------------------------------------------------------------------------------------------------------------
OWNER/ANNUITANT The beneficiary(ies), or Yes
if none, to the contract
owner's estate.
- --------------------------------------------------------------------------------------------------------------
BENEFICIARY No death proceeds are N/A
payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
CONTINGENT BENEFICIARY No death proceeds are N/A
payable; contract
continues.
- --------------------------------------------------------------------------------------------------------------
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 or income option then in effect.
THE ANNUITY PERIOD
- --------------------------------------------------------------------------------
MATURITY DATE
Under the Contract, you can receive regular income payments (annuity payments).
You can choose the month and the year in which those payments begin (maturity
date). You can also choose among income payouts (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 either a minimum number of payments or a specific
amount assured; or (c) for the joint lifetime of the annuitant and another
person, and thereafter during the lifetime of the survivor. 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 you purchase your Contract. Unless
you elect otherwise, the maturity date will be your 90th birthday or ten years
after the effective date of the contract, if later. (For Contracts issued in
Florida and New York, the maturity date you elect may not be later than your
90th birthday.)
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.
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LIQUIDITY BENEFIT (BENEFIT NOT AVAILABLE UNDER 457 PLANS)
If you select any annuity option which guarantees you payments for a minimum
period of time ("period certain"), you may take a lump sum payment (equal to a
portion or all of the value of the remaining payments) any time after the first
contract year. There is a surrender charge of 5% of the amount withdrawn under
this option.
For variable annuity payments, we use the Assumed Net Investment Factor,
("ANIF") as the interest rate to determine the lump sum amount. If you request
only a percentage of the amount available, we will reduce the amount of each
payment during the rest of the period certain by that percentage. After the
period expires, your payments will increase to the level they would have been
had no liquidation has taken place.
For fixed annuity payments, we calculate the present value of the remaining
period certain payments using a current interest rate. The current interest rate
used depends on the amount of time left in the annuity option you elected. The
current rate will be the same rate we would give someone electing an annuity
option for that same amount of time. If you request a percentage of the amount
available during the period certain, we will reduce the amount of each payment
during the rest of the period certain by that percentage. After the period
certain expires, your payments will increase to the level they would have been
had no liquidation taken place.
The market value adjustment formula for calculating the present value described
above for fixed annuity payments is as follows:
Present Value =LOGO[Payment(s) X (1/1 + iC)(t/365)]
Where
iC = the interest rate described above
n = the number of payments remaining in the contract owner's
period certain at the time of request for this benefit
t = the number of days remaining until that payment is made,
adjusting for leap years.
See Appendix E for examples of this market value adjustment.
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 contract value
to provide an annuity funded by the same investment options as you have selected
during the accumulation period. At least 30 days before the maturity 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.")
ANNUITIZATION CREDIT. This credit is applied to the contract value used to
purchase one of the annuity options described below. The credit equals 0.5% of
your contract value if you annuitize during contract years 2-5, 1% during
contract years 6-10, and 2% after contract year 10. There is no credit applied
to contracts held less than 1 year.
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.
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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 (or, if they would produce a larger payment, the tables then in effect on
the maturity date) by the number of thousands of dollars of contract value you
apply to that annuity option. and factors in an assumed daily net investment
factor. We call this your net investment rate. Your net investment rate
corresponds to an annual interest rate of 3%. This means that if the annualized
investment performance, after expenses, of your variable funding options is less
than 3%, then the dollar amount of your variable annuity payment will decrease.
However, if the annualized investment performance, after expenses, of your
variable funding options is greater than 3%, 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 which do not vary during
the annuity period. We will calculate the dollar amount of the first fixed
annuity payment as described under "Variable Annuity," except that the amount we
apply to begin the annuity will be your contract value as of the date annuity
payments begin. The payout rates we use will always at least equal but not
exceed those we show in your Contract.
If you have elected the Increasing Benefit Option, the payments will be
calculated as above. However, the initial payment will be less than that
reflected in the table and the subsequent payments will be increased by the
percentage you elected.
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.
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 4 (Joint and Last
Survivor Life Annuity -- Annuity Reduced on Death of Primary Payee) will be the
automatic option as described in the Contract.
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, the Company reserves 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.
VARIABLE ANNUITIZATION FLOOR BENEFIT. (BENEFIT NOT AVAILABLE UNDER 457
PLANS) This benefit may not be available, or may only be available under
certain annuity options, if we determine market conditions so dictate. If
available, we will guarantee that, regardless of the performance of the funding
options selected by you, your annuity payments will never be less than a certain
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35
percentage of your first annuity payment. This percentage will vary depending on
market conditions, but will never be less than 50%. You may not elect this
benefit if you are over age 80. Additionally, you must select from certain funds
available under this guarantee. Currently, these funds are the Equity Index
Portfolio Class II, the Travelers Quality Bond Portfolio, and the U.S.
Government Securities Portfolio. We may, at our discretion, increase or decrease
the number of funds available under this benefit. This benefit is not currently
available under Annuity Option 5. The benefit is not available with the 5% ANIF
under any Option. If you select this benefit, you may not elect to liquidate any
portion of your Contract.
There is a charge for this guarantee, which will begin upon election of this
benefit. This charge will vary based upon market conditions, and will be
established at the time the benefit is elected. Once established, the charge
will remain level throughout the remainder of the annuitization, and will never
increase your annual separate account charge by more than 3% per year.
We reserve the right to restrict the amount of contract value to be annuitized
under this benefit.
ANNUITY OPTIONS
Subject to the conditions described in "Election of Options" above, we may pay
all or any part of the cash surrender value under one or more of the following
annuity options. Payments under the annuity options are generally made on a
monthly basis. We may offer additional options. Options 1 through 4 are
available for both fixed and/or variable annuities. Option 5 is only available
for fixed annuities.
INCREASING BENEFIT OPTION. For Fixed Annuities, the annuity payment you receive
may be either level (except after death of Primary Payee in Option 4) or
increasing. If increasing payments are selected, the initial payment will be
less than the corresponding level payment for the same annuity option, but your
payments will increase on each contract date anniversary by a percentage chosen
by you. You may choose a whole number percentage from one to four.
Option 1 -- Life Annuity -- No Refund. The Company will make annuity payments
during the lifetime of the annuitant ending with the last payment before death.
This option offers the maximum periodic payment, since there is no assurance of
a minimum number of payments or 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 elected, we will continue making
payments to the beneficiary during the remainder of the period.
Option 3 -- Joint and Last Survivor Life Annuity -- No Refund. The Company will
make regular annuity payments during the lifetime of the annuitant and a second
person. When either person dies, we will continue making payments to the
survivor. No further payments will be made following the death of the survivor.
Option 4 -- Joint and Last Survivor Life Annuity -- Annuity Reduced on Death of
Primary Payee. The Company will make annuity payments during the lifetimes of
the annuitant and a second person. You will designate one as primary payee, and
the other will be designated as secondary payee. On the death of the secondary
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, the Company will continue
to make annuity payments to the secondary payee in an amount equal to 50% of the
payments which would have been made during the lifetime of the primary payee. No
further payments will be made once both payees have died.
Option 5 -- Payments for a Fixed Period. We will make periodic payments for the
period selected.
Option 6 -- Income Option. We will make a certain number of payments which are
not based on the annuitant's lifetime.
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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, 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 contract 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 longer 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
You do not need to make any purchase payments after the first to keep the
Contract in effect. However, we reserve the right to terminate the Contract on
any business day if your 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 we terminate the Contract, we will pay you the cash surrender value
less any applicable taxes.
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.
SUSPENSION OF PAYMENTS
The Company reserves the right to suspend or postpone the date of any payment or
determination of values on any business day (1) when the New York Stock Exchange
("the Exchange") is closed; (2) when trading on the Exchange is restricted; (3)
when an emergency exists as determined by the SEC so that the sale of securities
held in the Separate Account may not reasonably occur or so that the Company may
not reasonably determine the value the Separate Account's net assets; or (4)
during any other period when the SEC, by order, so permits for the protection of
security holders. Payments from the Fixed Account may be delayed up to 6 months.
THE SEPARATE ACCOUNTS
- --------------------------------------------------------------------------------
The Travelers Insurance Company and the Travelers Life and Annuity Company each
sponsor separate accounts: Separate Account Five and Separate Account Six,
respectively. Both Separate Account Five and Separate Account Six were
established on June 8, 1998 and are registered with the SEC as unit investment
trusts (separate account) under the Investment Company Act of 1940, as amended.
We will invest Separate Account assets attributable to the Contracts exclusively
in the shares of the variable funding options.
We hold the assets of Separate Account Five and Separate Account Six for the
exclusive and separate benefit of the owners of each separate account, according
to the laws of Connecticut.
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Income, gains and losses, whether or not realized, from assets allocated to the
Separate Account are, in accordance with the Contracts, credited to or charged
against the Separate Account without regard to other income, gains and losses of
the Company. The assets held by the Separate Account are not chargeable with
liabilities arising out of any other business which we may conduct. Obligations
under the Contract are obligations of the Company.
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
funding options are currently sold only to life insurance company separate
accounts to fund variable annuity and variable life insurance contracts.
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
From time to time, we may advertise several types of historical performance for
the Contract's variable funding options. We may advertise the "standardized
average annual total returns" of the variable funding option, calculated in a
manner prescribed by the SEC, and the "nonstandardized total return," as
described below. Specific examples of the performance information appear in the
SAI.
STANDARDIZED METHOD. We compute quotations of average annual total returns
according to a formula in which a hypothetical initial investment of $1,000 is
applied to the variable funding option, and then related to ending redeemable
values over one-, five-, and ten-year periods, or for a period covering the time
during which the funding option has been in existence, if less. Purchase payment
credits are not included in these calculations. These quotations reflect the
deduction of all recurring charges during each period (on a pro rata basis in
the case of fractional periods). We convert the deduction for the annual
contract administrative charge to a percentage of assets based on the actual fee
collected, divided by the average net assets for Contracts sold. Each quotation
assumes a total redemption at the end of each period with the applicable
withdrawal charge deducted at that time.
NONSTANDARDIZED METHOD. We calculate nonstandardized "total returns" in a
similar manner based on the performance of the funding options over a period of
time, usually for the calendar year-to-date, and for the past one-, three-,
five- and ten-year periods. Nonstandardized total returns will not reflect the
deduction of the annual contract administrative charge, which, if reflected,
would decrease the level of performance shown. Purchase payment credits are not
included in these calculations. These returns also do not reflect the withdrawal
charge because we designed the Contract for long-term investment.
For underlying funds that were in existence before they became available as a
funding option, the nonstandardized average annual total return quotations
reflects the investment performance that such funding options would have
achieved (reduced by the applicable charges) had the underlying fund been held
under the Contract for the period quoted. The total return quotations are based
upon historical earnings and are not necessarily representative of future
performance.
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GENERAL. Within the guidelines prescribed by the SEC and the National
Association of Securities Dealers, Inc. ("NASD"), performance information may be
quoted numerically or may be presented in a table, graph or other illustration.
Advertisements may include data comparing performance to well-known indices of
market performance (including, but not limited to, the Dow Jones Industrial
Average, the Standard & Poor's (S&P) 500 Index, the S&P 400 Index, the Lehman
Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value
Line Index, and the Morgan Stanley Capital International's EAFE Index).
Advertisements may also include published editorial comments and performance
rankings compiled by independent organizations (including, but not limited to,
Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that
monitor the performance of the Separate Account and the variable funding
options.
FEDERAL TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
The following general discussion of the federal income tax consequences under
this Contract is not intended to cover all situations, and is not meant to
provide tax advice. Because of the complexity of the law and the fact that the
tax results will vary depending on many factors, you should consult your tax
adviser regarding your personal situation. For your information, a more detailed
tax discussion is contained in the SAI.
GENERAL TAXATION OF ANNUITIES
Congress has recognized the value of saving for retirement by providing certain
tax benefits, in the form of tax deferral, for money put into an annuity. The
Internal Revenue Code (Code) governs how this money is ultimately taxed,
depending upon the type of contract, qualified or non-qualified, and the manner
in which the money is distributed, as briefly described below.
TAX-FREE EXCHANGES: The Internal Revenue Code provides that, generally, no gain
or loss is recognized when an annuity contract is received in exchange for a
life, endowment, or annuity contract. Since different annuity contracts have
different expenses, fees and benefits, a tax-free exchange could result in your
investment becoming subject to higher or lower fees and/or expenses.
QUALIFIED ANNUITY CONTRACTS
Under a qualified annuity, since amounts paid into the contract have generally
not yet been taxed, the full amount of all distributions, including lump-sum
withdrawals and 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 contracts, including withdrawal restrictions, requirements for
mandatory distributions, and contribution limits. We have provided a more
complete discussion in the SAI.
PENALTY TAX FOR PREMATURE DISTRIBUTIONS
Taxable distributions taken before the contract owner has reached the age of
59 1/2 will be subject to a 10% additional tax penalty unless the distribution
is taken in a series of periodic distributions, for life or life expectancy, or
unless the distribution follows the death or disability of the contract owner.
Other exceptions may be available in certain qualified plans.
DIVERSIFICATION REQUIREMENTS FOR VARIABLE ANNUITIES
The Code requires that any nonqualified variable annuity contracts based on a
separate account shall not be treated as an annuity for any period if
investments made in the account are not adequately diversified. Final tax
regulations define how separate accounts must be diversified. The Company
monitors the diversification of investments constantly and believes that its
accounts are adequately diversified. The consequence of any failure to diversify
is essentially the loss to the
35
39
contract owner of tax deferred treatment. The Company intends to administer all
contracts subject to this provision of law in a manner that will maintain
adequate diversification.
OWNERSHIP OF THE INVESTMENTS
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 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.
MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS
Federal tax law requires that minimum annual distributions begin by April 1st of
the calendar year following the calendar year in which an IRA owner attains age
70 1/2. Participants in qualified plans and 403(b) annuities may defer minimum
distributions until the later of April 1st of the calendar year following the
calendar year in which they attain age 70 1/2 or the year of retirement.
Distributions must begin or be continued according to required patterns
following the death of the contract owner or annuitant of both qualified and
nonqualified annuities.
TAXATION OF DEATH BENEFIT PROCEEDS
Amounts may be distributed from a Contract because of the death of an owner or
annuitant. Generally, such amounts are includible in the income of the recipient
as follows: (i) if distributed in a lump sum, they are taxed in the same manner
as a full surrender of the contract; of (ii) if distributed under a payment
option, they are taxed in the same way as annuity payments.
AVAILABLE INFORMATION
- --------------------------------------------------------------------------------
The Companies are both subject to the information requirements of the Securities
and Exchange Act of 1934 ("the 1934 Act"), as amended, and file reports, proxy
statements and other information with the Securities and Exchange Commission
("Commission"). You may read and copy this information and other information at
the following locations:
- public reference facilities of the Commission at Room 1024, 450 Fifth
Street, N.W., Washington, D.C.
- the Commission's Regional Offices located at Seven World Trade Center,
New York, New York 10048,
- the Commission's Regional Offices located at Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Under the Securities Act of 1933, the Companies have each filed with the
Commission registration statements (the "Registration Statement") relating to
the Contracts offered by this Prospectus. This Prospectus has been filed as a
part of the Registration Statement and does not contain all of the information
set forth in the Registration Statement and the exhibits. Reference is hereby
made to such Registration Statement and exhibits for further information about
the Companies and the Contracts. The Registration Statement and the exhibits may
be inspected and copied as described above. Although the Companies each furnish
the Annual Reports on Form 10-K for the year ended December 31, 2000 to owners
of contracts or certificates, we do not plan to furnish subsequent annual
reports containing financial information to the owners of contracts or
certificates described in this Prospectus.
36
40
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- --------------------------------------------------------------------------------
Each Company's latest Annual Report on Form 10-K has been filed with the
Commission. They are both incorporated by reference into this Prospectus and
copies must accompany this Prospectus.
The Forms 10-K for the fiscal year ended December 31, 2000 contain additional
information about each Company including audited financial statements for the
latest fiscal year. The Travelers Insurance Company filed its Form 10-K on March
14, 2001 via Edgar, File No. 33-33691. The Travelers Life and Annuity Company
filed its Form 10-K on March 14, 2001 via Edgar; File No. 33-58677.
If requested, we will furnish, without charge, a copy of any and all of the
documents incorporated by reference, other than exhibits to those documents
(unless such exhibits are specifically incorporated by reference in those
documents). You may direct your requests to: The Travelers Insurance Company,
One Tower Square, Hartford, Connecticut 06183-5030, Attention: Annuity Services.
The telephone number is (860) 422-3985. You may also obtain copies of any
documents, incorporated by reference into this prospectus by accessing the SEC's
website (http://www.sec.gov).
OTHER INFORMATION
- --------------------------------------------------------------------------------
THE INSURANCE COMPANIES
Please refer to your Contract or the first page of the Summary of this
prospectus to determine which Company issued your Contract.
The Travelers Insurance Company is a stock insurance company chartered in 1864
in Connecticut and continuously engaged in the insurance business since that
time. It is licensed to conduct life insurance business in all states of the
United States, the District of Columbia, Puerto Rico, Guam, the U.S. and British
Virgin Islands and the Bahamas. The Company is an indirect wholly owned
subsidiary of Citigroup Inc. The Company's Home Office is located at One Tower
Square, Hartford, Connecticut 06183.
The Travelers Life and Annuity Company is a stock insurance company chartered in
1973 in Connecticut and continuously engaged in the insurance business since
that time. It is licensed to conduct life insurance business in a majority of
the states of the United States, the District of Columbia and Puerto Rico, and
intends to seek licensure in the remaining states, except New York. The Company
is an indirect wholly owned subsidiary of Citigroup Inc. The Company's Home
Office is located at One Tower Square, Hartford, Connecticut 06183.
FINANCIAL STATEMENTS
The financial statements for the Company and its separate account are located in
the Statement of Additional Information.
DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS
We intend to sell the Contracts in all jurisdictions where we are licensed to do
business and where the Contract is approved. Any registered representative of
affiliated or independent broker-dealers who sell the Contracts will be
qualified to sell variable annuities under applicable federal and state laws.
Each broker-dealer is registered with the SEC under the Securities Exchange Act
of 1934, and all are members of the NASD. The principal underwriter of the
Contracts is our affiliate, Travelers Distribution LLC, One Tower Square,
Hartford, CT.
Up-front compensation paid to sales representatives will not exceed 7% of the
purchase payments made under the Contracts. If asset based compensation is paid,
it will not exceed 2% of the average account value annually. From time to time,
we may pay or permit other promotional incentives, in cash, credit or other
compensation.
37
41
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.
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. When we receive those instructions, we
will vote all of the shares we own in proportion to those instructions. This
will also include any shares we own on our own behalf. Should we determine that
we are no longer required to comply with the above, we will vote on the shares
in our own right.
LEGAL PROCEEDINGS AND OPINIONS
Legal matters in connection with the federal laws and regulations affecting the
issue and sale of the contract described in this prospectus, as well as the
organization of the Companies, their authority to issue variable annuity
contracts under Connecticut law and the validity of the forms of the variable
annuity contracts under Connecticut law, have been passed on by the General
Counsel of the Companies.
THE TRAVELERS INSURANCE COMPANY
In March 1997, a purported class action entitled Patterman v. The Travelers,
Inc., et al. was commenced in the Superior Court of Richmond County, Georgia,
alleging, among other things, violations of the Georgia RICO statute and other
state laws by an affiliate of the Company, Primerica Financial Services, Inc.
and certain of its affiliates. Plaintiffs seek unspecified compensatory and
punitive damages and other relief. From February 1998 through April 2000,
various motions for transfer of the lawsuit were heard and appealed. In April
2000, the matter was remanded to the Superior Court of Richmond County by the
Georgia Supreme Court. Also, in April 2000 defendants moved for summary
judgement on all counts of the complaint. Discovery commenced in May 2000.
Defendants intend to vigorously contest the litigation.
THE TRAVELERS LIFE AND ANNUITY COMPANY
There are no pending material legal proceedings affecting the Separate Account,
the principal underwriter or the Company.
38
THIS PAGE INTENTIONALLY LEFT BLANK.
42
APPENDIX A
CONDENSED FINANCIAL INFORMATION (1999)
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES
AIR = ASSUMED INVESTMENT RATE
FC = FLOOR BENEFIT CHARGE
STANDARD = STANDARD DEATH BENEFIT
OPTIONAL = OPTIONAL DEATH BENEFIT
PERIOD FROM JUNE 9, 1999* TO DECEMBER 31, 1999
STANDARD STANDARD OPTIONAL OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%AIR, 3%AIR, 3%AIR, 3%AIR,
3%AIR 5%AIR 3%AIR 5%AIR .62FC 1.1%FC .83FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
HIGH YIELD BOND TRUST (9/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 0.980 0.980 0.977 0.977 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 93,082 -- -- -- -- --
MANAGED ASSETS TRUST (6/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.102 1.102 1.098 1.098 -- -- -- --
Number of units outstanding at end
of year......................... 13,609 -- 899,389 -- -- -- -- --
MONEY MARKET PORTFOLIO (9/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.032 1.032 1.028 1.028 -- -- -- --
Number of units outstanding at end
of year......................... 36,453 -- 134,132 -- -- -- -- --
AMERICAN ODYSSEY FUNDS, INC.*
CORE EQUITY FUND (9/99)*
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 0.995 0.995 0.992 0.992 -- -- -- --
Number of units outstanding at end
of year......................... 21,459 -- 68,472 -- -- -- -- --
EMERGING OPPORTUNITIES FUND
(9/99)*
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.465 1.465 1.460 1.460 -- -- -- --
Number of units outstanding at end
of year......................... 6,201 -- 29,981 -- -- -- -- --
GLOBAL HIGH-YIELD BOND FUND
(12/99)++
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.070 1.070 1.066 1.066 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 18,317 -- -- -- -- --
INTERMEDIATE-TERM BOND FUND
(8/99)++
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.005 1.005 1.002 1.002 -- -- -- --
Number of units outstanding at end
of year......................... 73,160 -- 44,935 -- -- -- -- --
INTERNATIONAL EQUITY FUND (7/99)*
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.272 1.272 1.267 1.267 -- -- -- --
Number of units outstanding at end
of year......................... 6,933 -- 91,971 -- -- -- -- --
LONG-TERM BOND FUND (9/99)*
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 0.979 0.979 0.976 0.976 -- -- -- --
Number of units outstanding at end
of year......................... 37,502 -- 49,414 -- -- -- -- --
DELAWARE GROUP PREMIUM FUND
REIT SERIES
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
SMALL CAP VALUE SERIES (10/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 0.991 0.991 0.988 0.988 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 3,413 -- -- -- -- --
A-1
43
APPENDIX A
CONDENSED FINANCIAL INFORMATION (1999)
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES (CONTINUED)
PERIOD FROM JUNE 9, 1999* TO DECEMBER 31, 1999
STANDARD STANDARD OPTIONAL OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%AIR, 3%AIR, 3%AIR, 3%AIR,
3%AIR 5%AIR 3%AIR 5%AIR .62FC 1.1%FC .83FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND
CAPITAL APPRECIATION PORTFOLIO**
(7/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.081 1.081 1.077 1.077 -- -- -- --
Number of units outstanding at end
of year......................... 24,552 -- 320,468 -- -- -- -- --
SMALL CAP PORTFOLIO (10/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.240 1.240 1.236 1.236 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 37,863 -- -- -- -- --
GREENWICH STREET SERIES FUND
EQUITY INDEX PORTFOLIO II (7/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Unit Value at end of year......... 1.133 1.133 1.129 1.129 1.127 1.123 1.122 1.117
Number of units outstanding at end
of year......................... 13,350 -- 317,090 -- -- -- -- --
THE MONTGOMERY FUNDS III
MONTGOMERY VARIABLE SERIES; GROWTH
FUND (10/99)+
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.208 1.208 1.204 1.204 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 22,857 -- -- -- -- --
OCC ACCUMULATION TRUST
EQUITY PORTFOLIO+
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
SALOMON BROTHERS VARIABLE SERIES
FUNDS, INC.
CAPITAL FUND (7/98)
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
INVESTORS FUND (10/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.088 1.088 1.084 1.084 -- -- -- --
Number of units outstanding at end
of year......................... 13,535 -- 6,020 -- -- -- -- --
TOTAL RETURN FUND
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
STRONG VARIABLE INSURANCE FUNDS,
INC.
STRONG SCHAFER VALUE FUND II
(7/98)*
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
TRAVELERS SERIES FUND INC.
ALLIANCE GROWTH PORTFOLIO (7/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.303 1.303 1.298 1.298 -- -- -- --
Number of units outstanding at end
of year......................... 17,222 -- 226,122 -- -- -- -- --
MFS TOTAL RETURN PORTFOLIO (7/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 0.994 0.994 0.991 0.991 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 114,042 -- -- -- -- --
A-2
44
APPENDIX A
CONDENSED FINANCIAL INFORMATION (1999)
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES (CONTINUED)
PERIOD FROM JUNE 9, 1999* TO DECEMBER 31, 1999
STANDARD STANDARD OPTIONAL OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%AIR, 3%AIR, 3%AIR, 3%AIR,
3%AIR 5%AIR 3%AIR 5%AIR .62FC 1.1%FC .83FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
<->TRAVELERS SERIES FUND
INC. (CONT.)
PUTNAM DIVERSIFIED INCOME
PORTFOLIO ()
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
SMITH BARNEY HIGH INCOME PORTFOLIO
(8/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.007 1.007 1.004 1.004 -- -- -- --
Number of units outstanding at end
of year......................... 20,231 -- -- -- -- -- -- --
SMITH BARNEY INTERNATIONAL EQUITY
PORTFOLIO (12/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.569 1.569 1.563 1.563 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 53,669 -- -- -- -- --
SMITH BARNEY LARGE CAPITALIZATION
GROWTH PORTFOLIO (10/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.132 1.132 1.128 1.128 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 77,927 -- -- -- -- --
THE TRAVELERS SERIES TRUST
DISCIPLINED MID CAP STOCK
PORTFOLIO (8/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.132 1.132 1.129 1.129 -- -- -- --
Number of units outstanding at end
of year......................... 4,950 -- 13,503 -- -- -- -- --
DISCIPLINED SMALL CAP STOCK
PORTFOLIO ()+
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
EQUITY INCOME PORTFOLIO (7/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.021 1.021 1.017 1.017 -- -- -- --
Number of units outstanding at end
of year......................... 12,381 -- 255,091 -- -- -- -- --
FEDERATED STOCK PORTFOLIO ()
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
LARGE CAP PORTFOLIO (7/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.224 1.224 1.219 1.219 -- -- -- --
Number of units outstanding at end
of year......................... 12,719 -- 89,328 -- -- -- -- --
LAZARD INTERNATIONAL STOCK
PORTFOLIO (8/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.194 1.194 1.190 1.190 -- -- -- --
Number of units outstanding at end
of year......................... 4,591 -- -- -- -- -- -- --
MFS MID CAP GROWTH PORTFOLIO
(10/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.603 1.603 1.598 1.598 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 91,838 -- -- -- -- --
MFS RESEARCH PORTFOLIO ()
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
A-3
45
APPENDIX A
CONDENSED FINANCIAL INFORMATION (1999)
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES (CONTINUED)
PERIOD FROM JUNE 9, 1999* TO DECEMBER 31, 1999
STANDARD STANDARD OPTIONAL OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%AIR, 3%AIR, 3%AIR, 3%AIR,
3%AIR 5%AIR 3%AIR 5%AIR .62FC 1.1%FC .83FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
<->THE TRAVELERS SERIES
TRUST (CONT.)
SOCIAL AWARENESS PORTFOLIO (7/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.115 1.115 1.111 1.111 -- -- -- --
Number of units outstanding at end
of year......................... 14,167 -- 57,036 -- -- -- -- --
STRATEGIC STOCK PORTFOLIO+
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
TRAVELERS QUALITY BOND PORTFOLIO
(8/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Unit Value at end of year......... 1.002 1.002 0.998 0.998 1.000 0.999 0.996 0.994
Number of units outstanding at end
of year......................... 19,941 -- 8,527 -- -- -- -- --
U.S. GOVERNMENT SECURITIES
PORTFOLIO (8/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Unit Value at end of year......... 0.968 0.968 0.965 0.965 0.966 0.965 0.962 0.961
Number of units outstanding at end
of year......................... 20,423 -- 75,867 -- -- -- -- --
UTILITIES PORTFOLIO (8/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 0.959 0.959 0.956 0.956 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 2,049 -- -- -- -- --
WARBURG PINCUS TRUST*
EMERGING MARKETS PORTFOLIO (10/99)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.506 1.506 1.502 1.502 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 42,199 -- -- -- -- --
A-4
46
APPENDIX A
CONDENSED FINANCIAL INFORMATION (2000)
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES
YEAR ENDED DECEMBER 31, 2000
STANDARD STANDARD OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%, 3%, OPTIONAL 3%,
3% 5% 3% 5% .62FC 1.1%FC 3%, .83FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND (5/00)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 0.745 0.745 0.743 0.743 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 978,236 -- -- -- -- --
HIGH YIELD BOND TRUST (9/99)
Unit Value at beginning of year... 0.980 0.980 0.977 0.977 -- -- -- --
Unit Value at end of year......... 0.982 0.982 0.974 0.974 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 311,004 -- -- -- -- --
MANAGED ASSETS TRUST (6/99)
Unit Value at beginning of year... 1.102 1.102 1.098 1.098 -- -- -- --
Unit Value at end of year......... 1.076 1.076 1.067 1.067 -- -- -- --
Number of units outstanding at end
of year......................... 20,767 -- 1,799,521 -- -- -- -- --
MONEY MARKET PORTFOLIO (9/99)
Unit Value at beginning of year... 1.032 1.032 1.028 1.028 -- -- -- --
Unit Value at end of year......... 1.087 1.087 1.078 1.078 -- -- -- --
Number of units outstanding at end
of year......................... 76,073 -- 911,055 -- -- -- -- --
AMERICAN ODYSSEY FUNDS, INC.*
CORE EQUITY FUND (9/99)*
Unit Value at beginning of year... 0.995 0.995 0.992 0.992 -- -- -- --
Unit Value at end of year......... 0.840 0.840 0.833 0.833 -- -- -- --
Number of units outstanding at end
of year......................... 10,384 -- 626,483 -- -- -- -- --
EMERGING OPPORTUNITIES FUND
(9/99)*
Unit Value at beginning of year... 1.465 1.465 1.460 1.460 -- -- -- --
Unit Value at end of year......... 1.600 1.600 1.587 1.587 -- -- -- --
Number of units outstanding at end
of year......................... 1,472 -- 235,839 -- -- -- -- --
GLOBAL HIGH-YIELD BOND FUND
(12/99)++
Unit Value at beginning of year... 1.070 1.070 1.066 1.066 -- -- -- --
Unit Value at end of year......... 1.021 1.021 1.012 1.012 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 95,298 -- -- -- -- --
INTERMEDIATE-TERM BOND FUND
(8/99)++
Unit Value at beginning of year... 1.005 1.005 1.002 1.002 -- -- -- --
Unit Value at end of year......... 1.063 1.063 1.054 1.054 -- -- -- --
Number of units outstanding at end
of year......................... 16,410 -- 369,677 -- -- -- -- --
INTERNATIONAL EQUITY FUND (7/99)*
Unit Value at beginning of year... 1.272 1.272 1.267 1.267 -- -- -- --
Unit Value at end of year......... 1.160 1.160 1.151 1.151 -- -- -- --
Number of units outstanding at end
of year......................... 1,916 -- 347,387 -- -- -- -- --
LONG-TERM BOND FUND (9/99)*
Unit Value at beginning of year... 0.979 0.979 0.976 0.976 -- -- -- --
Unit Value at end of year......... 1.092 1.092 1.083 1.083 -- -- -- --
Number of units outstanding at end
of year......................... 12,041 -- 409,109 -- -- -- -- --
DELAWARE GROUP PREMIUM FUND, INC.
REIT SERIES (9/00)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.221 1.221 1.213 1.213 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 50,532 -- -- -- -- --
SMALL CAP VALUE SERIES (10/99)
Unit Value at beginning of year... 0.991 0.991 0.988 0.988 -- -- -- --
Unit Value at end of year......... 1.162 1.162 1.153 1.153 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 39,689 -- -- -- -- --
A-5
47
APPENDIX A
CONDENSED FINANCIAL INFORMATION (2000)
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES (CONTINUED)
YEAR ENDED DECEMBER 31, 2000
STANDARD STANDARD OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%, 3%, OPTIONAL 3%,
3% 5% 3% 5% .62FC 1.1%FC 3%, .83FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND
CAPITAL APPRECIATION PORTFOLIO
(7/99)
Unit Value at beginning of year... 1.081 1.081 1.077 1.077 -- -- -- --
Unit Value at end of year......... 1.065 1.065 1.057 1.057 -- -- -- --
Number of units outstanding at end
of year......................... 24,552 -- 509,909 -- -- -- -- --
SMALL CAP PORTFOLIO (10/99)
Unit Value at beginning of year... 1.240 1.240 1.236 1.236 -- -- -- --
Unit Value at end of year......... 1.394 1.394 1.383 1.383 -- -- -- --
Number of units outstanding at end
of year......................... 3,246 -- 349,550 -- -- -- -- --
GREENWICH STREET SERIES FUND
EQUITY INDEX PORTFOLIO II (7/99)
Unit Value at beginning of year... 1.133 1.133 1.129 1.129 1.127 1.123 1.122 1.117
Unit Value at end of year......... 1.019 1.019 1.011 1.011 1.008 0.999 0.996 0.986
Number of units outstanding at end
of year......................... 14,389 -- 613,182 -- -- -- -- --
JANUS ASPEN SERIES
WORLDWIDE GROWTH PORTFOLIO (5/00)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 0.801 0.801 0.799 0.799 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 409,725 -- -- -- -- --
THE MONTGOMERY FUNDS III
MONTGOMERY VARIABLE SERIES; GROWTH
FUND (10/99)+
Unit Value at beginning of year... 1.208 1.208 1.204 1.204 -- -- -- --
Unit Value at end of year......... 1.090 1.090 1.082 1.082 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 78,405 -- -- -- -- --
OCC ACCUMULATION TRUST
EQUITY PORTFOLIO (1/00)+
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.014 1.014 1.007 1.007 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 8,202 -- -- -- -- --
SALOMON BROTHERS VARIABLE SERIES
FUNDS, INC.
CAPITAL FUND (4/00)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.072 1.072 1.064 1.064 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 62,150 -- -- -- -- --
INVESTORS FUND (10/99)
Unit Value at beginning of year... 1.088 1.088 1.084 1.084 -- -- -- --
Unit Value at end of year......... 1.244 1.244 1.234 1.234 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 55,437 -- -- -- -- --
TOTAL RETURN FUND (9/00)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.072 1.072 1.064 1.064 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 9,945 -- -- -- -- --
STRONG VARIABLE INSURANCE FUNDS,
INC.
STRONG SCHAFER VALUE FUND II
(3/00)*
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 0.938 0.938 0.932 0.932 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 24,959 -- -- -- -- --
TRAVELERS SERIES FUND, INC.
ALLIANCE GROWTH PORTFOLIO (7/99)
Unit Value at beginning of year... 1.303 1.303 1.298 1.298 -- -- -- --
Unit Value at end of year......... 1.057 1.057 1.048 1.048 -- -- -- --
Number of units outstanding at end
of year......................... 56,806 -- 987,185 -- -- -- -- --
A-6
48
APPENDIX A
CONDENSED FINANCIAL INFORMATION (2000)
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES (CONTINUED)
YEAR ENDED DECEMBER 31, 2000
STANDARD STANDARD OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%, 3%, OPTIONAL 3%,
3% 5% 3% 5% .62FC 1.1%FC 3%, .83FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
<->TRAVELERS SERIES FUND,
INC. (CONT.)
MFS TOTAL RETURN PORTFOLIO (7/99)
Unit Value at beginning of year... 0.994 0.994 0.991 0.991 -- -- -- --
Unit Value at end of year......... 1.150 1.150 1.142 1.142 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 487,322 -- -- -- -- --
PUTNAM DIVERSIFIED INCOME
PORTFOLIO
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
SMITH BARNEY HIGH INCOME PORTFOLIO
(8/99)
Unit Value at beginning of year... 1.007 1.007 1.004 1.004 -- -- -- --
Unit Value at end of year......... 0.918 0.918 0.912 0.912 -- -- -- --
Number of units outstanding at end
of year......................... 20,231 -- 52,398 -- -- -- -- --
SMITH BARNEY INTERNATIONAL EQUITY
PORTFOLIO (12/99)*
Unit Value at beginning of year... 1.569 1.569 1.563 1.563 -- -- -- --
Unit Value at end of year......... 1.186 1.186 1.177 1.177 -- -- -- --
Number of units outstanding at end
of year......................... 3,291 -- 247,679 -- -- -- -- --
SMITH BARNEY LARGE CAPITALIZATION
GROWTH PORTFOLIO (10/99)
Unit Value at beginning of year... 1.132 1.132 1.128 1.128 -- -- -- --
Unit Value at end of year......... 1.045 1.045 1.037 1.037 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 178,384 -- -- -- -- --
THE TRAVELERS SERIES TRUST
DISCIPLINED MID CAP STOCK
PORTFOLIO (8/99)
Unit Value at beginning of year... 1.132 1.132 1.129 1.129 -- -- -- --
Unit Value at end of year......... 1.310 1.310 1.301 1.301 -- -- -- --
Number of units outstanding at end
of year......................... 4,950 -- 88,564 -- -- -- -- --
DISCIPLINED SMALL CAP STOCK
PORTFOLIO+
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
EQUITY INCOME PORTFOLIO (7/99)
Unit Value at beginning of year... 1.021 1.021 1.017 1.017 -- -- -- --
Unit Value at end of year......... 1.105 1.105 1.096 1.096 -- -- -- --
Number of units outstanding at end
of year......................... 12,381 -- 437,309 -- -- -- -- --
FEDERATED STOCK PORTFOLIO
Unit Value at beginning of year... -- -- -- -- -- -- -- --
Unit Value at end of year......... -- -- -- -- -- -- -- --
Number of units outstanding at end
of year......................... -- -- -- -- -- -- -- --
LARGE CAP PORTFOLIO (7/99)
Unit Value at beginning of year... 1.224 1.224 1.219 1.219 -- -- -- --
Unit Value at end of year......... 1.038 1.038 1.030 1.030 -- -- -- --
Number of units outstanding at end
of year......................... 52,127 -- 804,274 -- -- -- -- --
LAZARD INTERNATIONAL STOCK
PORTFOLIO (8/99)
Unit Value at beginning of year... 1.194 1.194 1.190 1.190 -- -- -- --
Unit Value at end of year......... 1.049 1.049 1.041 1.041 -- -- -- --
Number of units outstanding at end
of year......................... 4,591 -- 17,988 -- -- -- -- --
MFS MID CAP GROWTH PORTFOLIO
(10/99)
Unit Value at beginning of year... 1.603 1.603 1.598 1.598 -- -- -- --
Unit Value at end of year......... 1.739 1.739 1.726 1.726 -- -- -- --
Number of units outstanding at end
of year......................... 30,494 -- 504,511 -- -- -- -- --
A-7
49
APPENDIX A
CONDENSED FINANCIAL INFORMATION (2000)
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES (CONTINUED)
YEAR ENDED DECEMBER 31, 2000
STANDARD STANDARD OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%, 3%, OPTIONAL 3%,
3% 5% 3% 5% .62FC 1.1%FC 3%, .83FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
<->THE TRAVELERS SERIES
TRUST (CONT.)
MFS RESEARCH PORTFOLIO (6/00)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.136 1.136 1.127 1.127 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 7,875 -- -- -- -- --
SOCIAL AWARENESS PORTFOLIO (7/99)
Unit Value at beginning of year... 1.115 1.115 1.111 1.111 -- -- -- --
Unit Value at end of year......... 1.100 1.100 1.092 1.092 -- -- -- --
Number of units outstanding at end
of year......................... 14,167 -- 141,652 -- -- -- -- --
STRATEGIC STOCK PORTFOLIO (4/00)+
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 1.030 1.030 1.023 1.023 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 19,858 -- -- -- -- --
TRAVELERS QUALITY BOND PORTFOLIO
(8/99)
Unit Value at beginning of year... 1.002 1.002 0.998 0.998 1.000 0.999 0.996 0.994
Unit Value at end of year......... 1.063 1.063 1.055 1.055 1.058 1.055 1.049 1.045
Number of units outstanding at end
of year......................... 19,941 -- 54,601 -- -- -- -- --
U.S. GOVERNMENT SECURITIES
PORTFOLIO (8/99)
Unit Value at beginning of year... 0.968 0.968 0.965 0.965 0.966 0.965 0.962 0.961
Unit Value at end of year......... 1.099 1.099 1.091 1.091 1.094 1.091 1.084 1.080
Number of units outstanding at end
of year......................... 20,423 -- 141,994 -- -- -- -- --
UTILITIES PORTFOLIO (8/99)
Unit Value at beginning of year... 0.959 0.959 0.956 0.956 -- -- -- --
Unit Value at end of year......... 1.183 1.183 1.174 1.174 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 135,986 -- -- -- -- --
VARIABLE INSURANCE PRODUCTS FUND II
ASSETS MANAGER
PORTFOLIO -- SERVICE CLASS 2
(5/00)
Unit Value at beginning of year... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year......... 0.949 0.949 0.947 0.947 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 173,343 -- -- -- -- --
WARBURG PINCUS TRUST
EMERGING MARKETS PORTFOLIO (10/99)
Unit Value at beginning of year... 1.506 1.506 1.502 1.502 -- -- -- --
Unit Value at end of year......... 1.022 1.022 1.015 1.015 -- -- -- --
Number of units outstanding at end
of year......................... -- -- 122,227 -- -- -- -- --
The date next to each funding option's name reflects the date money first came
into the funding option through the Separate Account. The financial statements
for Separate Account Five and the consolidated financial statements for The
Travelers Insurance Company and subsidiaries are contained in the SAI. Those
funding options not listed above were not available as of December 31, 2000.
* Fund's name has changed. Refer to prospectus for new name.
+ No longer available to new contract owners.
++ Fund is closed.
A-8
50
THIS PAGE INTENTIONALLY LEFT BLANK.
51
APPENDIX B
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES (1999)
AIR = ASSUMED INVESTMENT RATE
FC = FLOOR BENEFIT CHARGE
STANDARD = STANDARD DEATH BENEFIT
OPTIONAL = OPTIONAL DEATH BENEFIT
PERIOD FROM MARCH 22* TO DECEMBER 31, 1999
STANDARD STANDARD OPTIONAL OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%AIR, 3%AIR, 3%AIR, 3%AIR,
3%AIR 5%AIR 3%AIR 5%AIR .62FC 1.1%FC .83%FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
HIGH YIELD BOND TRUST (5/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 0.980 0.980 0.977 0.977 -- -- -- --
Number of units outstanding at
end of year.................... 92,789 -- 879,832 -- -- -- -- --
MANAGED ASSETS TRUST (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.102 1.102 1.098 1.098 -- -- -- --
Number of units outstanding at
end of year.................... 232,345 -- 5,360,035 -- -- -- -- --
MONEY MARKET PORTFOLIO (4/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.032 1.032 1.028 1.028 -- -- -- --
Number of units outstanding at
end of year.................... 239,890 -- 5,359,933 -- -- -- -- --
AMERICAN ODYSSEY FUNDS, INC.*
CORE EQUITY FUND (3/99)*
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 0.995 0.995 0.992 0.992 -- -- -- --
Number of units outstanding at
end of year.................... 228,230 -- 5,697,520 -- -- -- -- --
EMERGING OPPORTUNITIES FUND
(3/99)*
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.465 1.465 1.460 1.460 -- -- -- --
Number of units outstanding at
end of year.................... 113,574 -- 2,542,636 -- -- -- -- --
GLOBAL HIGH-YIELD BOND FUND
(3/99)++
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.070 1.070 1.066 1.066 -- -- -- --
Number of units outstanding at
end of year.................... 48,457 -- 1,363,227 -- -- -- -- --
INTERMEDIATE-TERM BOND FUND
(3/99)++
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.005 1.005 1.002 1.002 -- -- -- --
Number of units outstanding at
end of year.................... 187,387 -- 2,889,162 -- -- -- -- --
INTERNATIONAL EQUITY FUND (3/99)*
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.272 1.272 1.267 1.267 -- -- -- --
Number of units outstanding at
end of year.................... 90,221 -- 3,413,512 -- -- -- -- --
LONG-TERM BOND FUND (3/99)*
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 0.979 0.979 0.976 0.976 -- -- -- --
Number of units outstanding at
end of year.................... 139,623 -- 3,629,750 -- -- -- -- --
DELAWARE GROUP PREMIUM FUND
REIT SERIES (7/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 0.937 0.937 0.935 0.935 -- -- -- --
Number of units outstanding at
end of year.................... -- -- 22,639 -- -- -- -- --
SMALL CAP VALUE SERIES (4/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 0.991 0.991 0.988 0.988 -- -- -- --
Number of units outstanding at
end of year.................... -- -- 184,589 -- -- -- -- --
B-1
52
APPENDIX B
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES (1999) (CONTINUED)
PERIOD FROM MARCH 22* TO DECEMBER 31, 1999
STANDARD STANDARD OPTIONAL OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%AIR, 3%AIR, 3%AIR, 3%AIR,
3%AIR 5%AIR 3%AIR 5%AIR .62FC 1.1%FC .83%FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND
CAPITAL APPRECIATION PORTFOLIO
(3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.081 1.081 1.077 1.077 -- -- -- --
Number of units outstanding at
end of year.................... 244,529 -- 2,447,252 -- -- -- -- --
SMALL CAP PORTFOLIO (4/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.240 1.240 1.236 1.236 -- -- -- --
Number of units outstanding at
end of year.................... 45,091 -- 1,060,068 -- -- -- -- --
GREENWICH STREET SERIES FUND
EQUITY INDEX PORTFOLIO II (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Unit Value at end of year........ 1.133 1.133 1.129 1.129 1.127 1.123 1.122 1.117
Number of units outstanding at
end of year.................... 207,054 -- 5,953,238 -- -- -- -- --
THE MONTGOMERY FUNDS III
MONTGOMERY VARIABLE SERIES;
GROWTH FUND (3/99)+
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.208 1.208 1.204 1.204 -- -- -- --
Number of units outstanding at
end of year.................... 16,056 -- 573,739 -- -- -- -- --
OCC ACCUMULATION TRUST
EQUITY PORTFOLIO (3/99)+
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 0.930 0.930 0.927 0.927 -- -- -- --
Number of units outstanding at
end of year.................... -- -- 150,291 -- -- -- -- --
SALOMON BROTHERS VARIABLE SERIES
FUNDS, INC.
CAPITAL FUND (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.222 1.222 1.218 1.218 -- -- -- --
Number of units outstanding at
end of year.................... 13,279 -- 1,398,956 -- -- -- -- --
INVESTORS FUND (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.088 1.088 1.084 1.084 -- -- -- --
Number of units outstanding at
end of year.................... 5,119 -- 665,635 -- -- -- -- --
TOTAL RETURN FUND (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.002 1.002 0.998 0.998 -- -- -- --
Number of units outstanding at
end of year.................... -- -- 163,763 -- -- -- -- --
STRONG VARIABLE INSURANCE FUNDS,
INC.
STRONG SCHAFER VALUE FUND II
(7/99)*
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 0.877 0.877 0.875 0.875 -- -- -- --
Number of units outstanding at
end of year.................... 6,351 -- 114,839 -- -- -- -- --
TRAVELERS SERIES FUND INC.
ALLIANCE GROWTH PORTFOLIO (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.303 1.303 1.298 1.298 -- -- -- --
Number of units outstanding at
end of year.................... 274,568 -- 4,867,877 -- -- -- -- --
MFS TOTAL RETURN PORTFOLIO (4/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 0.994 0.994 0.991 0.991 -- -- -- --
Number of units outstanding at
end of year.................... 56,338 -- 822,665 -- -- -- -- --
B-2
53
APPENDIX B
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES (1999) (CONTINUED)
PERIOD FROM MARCH 22* TO DECEMBER 31, 1999
STANDARD STANDARD OPTIONAL OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%AIR, 3%AIR, 3%AIR, 3%AIR,
3%AIR 5%AIR 3%AIR 5%AIR .62FC 1.1%FC .83%FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
TRAVELERS SERIES FUND INC. (CONT.)
PUTNAM DIVERSIFIED INCOME
PORTFOLIO (6/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.010 1.010 1.007 1.007 -- -- -- --
Number of units outstanding at
end of year.................... -- -- 188,752 -- -- -- -- --
SMITH BARNEY HIGH INCOME
PORTFOLIO (5/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.007 1.007 1.004 1.004 -- -- -- --
Number of units outstanding at
end of year.................... -- -- 174,517 -- -- -- -- --
SMITH BARNEY INTERNATIONAL EQUITY
PORTFOLIO (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.569 1.569 1.563 1.563 -- -- -- --
Number of units outstanding at
end of year.................... 33,821 -- 942,437 -- -- -- -- --
SMITH BARNEY LARGE CAPITALIZATION
GROWTH PORTFOLIO (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.132 1.132 1.132 1.128 -- -- -- --
Number of units outstanding at
end of year.................... 100,647 -- 2,808,440 -- -- -- -- --
THE TRAVELERS SERIES TRUST
DISCIPLINED MID CAP STOCK
PORTFOLIO (6/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.132 1.132 1.129 1.129 -- -- -- --
Number of units outstanding at
end of year.................... -- -- 131,236 -- -- -- -- --
DISCIPLINED SMALL CAP STOCK
PORTFOLIO+ (5/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.150 1.150 1.147 1.147 -- -- -- --
Number of units outstanding at
end of year.................... -- -- 41,709 -- -- -- -- --
EQUITY INCOME PORTFOLIO (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.021 1.021 1.017 1.017 -- -- -- --
Number of units outstanding at
end of year.................... 216,322 -- 2,462,986 -- -- -- -- --
FEDERATED STOCK PORTFOLIO (4/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 0.965 0.965 0.962 0.962 -- -- -- --
Number of units outstanding at
end of year.................... -- -- 342,000 -- -- -- -- --
LARGE CAP PORTFOLIO (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.224 1.224 1.219 1.219 -- -- -- --
Number of units outstanding at
end of year.................... 247,021 -- 2,827,437 -- -- -- -- --
LAZARD INTERNATIONAL STOCK
PORTFOLIO (4/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.194 1.194 1.190 1.190 -- -- -- --
Number of units outstanding at
end of year.................... 13,922 -- 118,109 -- -- -- -- --
MFS MID CAP GROWTH PORTFOLIO
(5/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.603 1.603 1.598 1.598 -- -- -- --
Number of units outstanding at
end of year.................... 22,378 -- 519,757 -- -- -- -- --
B-3
54
APPENDIX B
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES (1999) (CONTINUED)
PERIOD FROM MARCH 22* TO DECEMBER 31, 1999
STANDARD STANDARD OPTIONAL OPTIONAL
STANDARD STANDARD OPTIONAL OPTIONAL 3%AIR, 3%AIR, 3%AIR, 3%AIR,
3%AIR 5%AIR 3%AIR 5%AIR .62FC 1.1%FC .83%FC 1.40%FC
- ---------------------------------------------------------------------------------------------------------------------------------
THE TRAVELERS SERIES TRUST (CONT.)
MFS RESEARCH PORTFOLIO (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.213 1.213 1.209 1.209 -- -- -- --
Number of units outstanding at
end of year.................... -- -- 169,528 -- -- -- -- --
SOCIAL AWARENESS PORTFOLIO (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.115 1.115 1.111 1.111 -- -- -- --
Number of units outstanding at
end of year.................... 204,232 -- 1,692,027 -- -- -- -- --
STRATEGIC STOCK PORTFOLIO (9/99)+
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 0.942 0.942 0.940 0.940 -- -- -- --
Number of units outstanding at
end of year.................... -- -- 75,116 -- -- -- -- --
TRAVELERS QUALITY BOND PORTFOLIO
(3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Unit Value at end of year........ 1.002 1.002 0.998 0.998 1.000 0.999 0.996 0.994
Number of units outstanding at
end of year.................... 30,445 -- 1,489,904 -- -- -- -- --
U.S. GOVERNMENT SECURITIES
PORTFOLIO (3/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000
Unit Value at end of year........ 0.968 0.968 0.965 0.965 0.966 0.965 0.962 0.961
Number of units outstanding at
end of year.................... 81,239 -- 1,134,380 -- -- -- -- --
UTILITIES PORTFOLIO (5/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 0.959 0.959 0.956 0.956 -- -- -- --
Number of units outstanding at
end of year.................... 52,624 -- 426,556 -- -- -- -- --
WARBURG PINCUS TRUST*
EMERGING MARKETS PORTFOLIO (5/99)
Unit Value at beginning of
year........................... 1.000 1.000 1.000 1.000 -- -- -- --
Unit Value at end of year........ 1.506 1.506 1.502 1.502 -- -- -- --
Number of units outstanding at
end of year.................... 54,662 -- 563,587 -- -- -- -- --
B-4
55
APPENDIX B
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES (2000)
YEAR ENDED DECEMBER 31, 2000
----------------------------------------------------------------------------------------------
STANDARD STANDARD OPTIONAL OPTIONAL STANDARD STANDARD OPTIONAL OPTIONAL
3% 5% 3% 5% 3%,.62FC 3%,1.1%FC 3%,.83FC 3%,1.40%FC
--------- --------- --------- --------- ---------- --------- -------- ----------
- ---------------------------------------------------------------------------------------------------------------------------------
CAPITAL APPRECIATION FUND (5/00)
Unit Value at beginning of
year......................... 1.000 1.000 1.000 1.000
Unit Value at end of year...... 0.745 0.745 0.743 0.743
Number of units outstanding at
end of year.................. 1,006,482 -- 18,629,244 --
HIGH YIELD BOND TRUST (5/99)
Unit Value at beginning of
year......................... 0.980 0.980 0.977 0.977
Unit Value at end of year...... 0.982 0.982 0.974 0.974
Number of units outstanding at
end of year.................. 101,749 -- 2,504,886 23,249
MANAGED ASSETS TRUST (3/99)
Unit Value at beginning of
year......................... 1.102 1.102 1.098 1.098
Unit Value at end of year...... 1.076 1.076 1.067 1.067
Number of units outstanding at
end of year.................. 913,007 -- 17,098,984 --
MONEY MARKET PORTFOLIO (4/99)
Unit Value at beginning of
year......................... 1.032 1.032 1.028 1.028
Unit Value at end of year...... 1.087 1.087 1.078 1.078
Number of units outstanding at
end of year.................. 700,403 -- 12,443,637 --
AMERICAN ODYSSEY FUNDS, INC.*
CORE EQUITY FUND (3/99)*
Unit Value at beginning of
year......................... 0.995 0.995 0.992 0.992
Unit Value at end of year...... 0.840 0.840 0.833 0.833
Number of units outstanding at
end of year.................. 959,029 -- 22,805,101 18,600
EMERGING OPPORTUNITIES FUND
(3/99)*
Unit Value at beginning of
year......................... 1.465 1.465 1.460 1.460
Unit Value at end of year...... 1.600 1.600 1.587 1.587
Number of units outstanding at
end of year.................. 462,418 -- 9,235,726 7,256
GLOBAL HIGH-YIELD BOND FUND
(3/99)++
Unit Value at beginning of
year......................... 1.070 1.070 1.066 1.066
Unit Value at end of year...... 1.021 1.021 1.012 1.012
Number of units outstanding at
end of year.................. 160,574 1,616 4,237,855 --
INTERMEDIATE-TERM BOND FUND
(3/99)++
Unit Value at beginning of
year......................... 1.005 1.005 1.002 1.002
Unit Value at end of year...... 1.063 1.063 1.054 1.054
Number of units outstanding at
end of year.................. 399,235 -- 9,735,911 22,453
INTERNATIONAL EQUITY FUND
(3/99)*
Unit Value at beginning of
year......................... 1.272 1.272 1.267 1.267
Unit Value at end of year...... 1.160 1.160 1.151 1.151
Number of units outstanding at
end of year.................. 474,746 -- 12,244,917 9,004
LONG-TERM BOND FUND (3/99)*
Unit Value at beginning of
year......................... 0.979 0.979 0.976 0.976
Unit Value at end of year...... 1.092 1.092 1.083 1.083
Number of units outstanding at
end of year.................. 601,543 -- 13,300,852 22,686
DELAWARE GROUP PREMIUM FUND, INC.
REIT SERIES (7/99)
Unit Value at beginning of
year......................... 0.937 0.937 0.935 0.935
Unit Value at end of year...... 1.221 1.221 1.213 1.213
Number of units outstanding at
end of year.................. 102,023 -- 284,819 --
SMALL CAP VALUE SERIES (4/99)
Unit Value at beginning of
year......................... 0.991 0.991 0.988 0.988
Unit Value at end of year...... 1.162 1.162 1.153 1.153
Number of units outstanding at
end of year.................. 5,110 -- 319,706 --
B-5
56
APPENDIX B
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES (2000) (CONTINUED)
YEAR ENDED DECEMBER 31, 2000
----------------------------------------------------------------------------------------------
STANDARD STANDARD OPTIONAL OPTIONAL STANDARD STANDARD OPTIONAL OPTIONAL
3% 5% 3% 5% 3%,.62FC 3%,1.1%FC 3%,.83FC 3%,1.40%FC
--------- --------- --------- --------- ---------- --------- -------- ----------
- ---------------------------------------------------------------------------------------------------------------------------------
DREYFUS VARIABLE INVESTMENT FUND
APPRECIATION PORTFOLIO (3/99)
Unit Value at beginning of
year......................... 1.081 1.081 1.077 1.077
Unit Value at end of year...... 1.065 1.065 1.057 1.057
Number of units outstanding at
end of year.................. 311,873 -- 4,996,243 --
SMALL CAP PORTFOLIO (4/99)
Unit Value at beginning of
year......................... 1.240 1.240 1.236 1.236
Unit Value at end of year...... 1.394 1.394 1.383 1.383
Number of units outstanding at
end of year.................. 305,761 -- 5,489,701 --
GREENWICH STREET SERIES FUND
EQUITY INDEX PORTFOLIO II
(3/99)
Unit Value at beginning of
year......................... 1.133 1.133 1.129 1.129 1.127 1.123 1.122 1.117
Unit Value at end of year...... 1.019 1.019 1.011 1.011 1.008 0.999 0.996 0.986
Number of units outstanding at
end of year.................. 842,129 -- 15,906,549 65,654 22,462 -- -- --
JANUS ASPEN SERIES
WORLDWIDE GROWTH PORTFOLIO --
SERVICE SHARES (5/00)
Unit Value at beginning of
year......................... 1.000 1.000 1.000 1.000
Unit Value at end of year...... 0.801 0.801 0.799 0.799
Number of units outstanding at
end of year.................. 424,750 -- 8,681,668 --
THE MONTGOMERY FUNDS III
MONTGOMERY VARIABLE SERIES;
GROWTH FUND (3/99)+
Unit Value at beginning of
year......................... 1.208 1.208 1.204 1.204
Unit Value at end of year...... 1.090 1.090 1.082 1.082
Number of units outstanding at
end of year.................. 40,161 -- 755,544 --
OCC ACCUMULATION TRUST
EQUITY PORTFOLIO (6/99)+
Unit Value at beginning of
year......................... 0.930 0.930 0.927 0.927
Unit Value at end of year...... 1.014 1.014 1.007 1.007
Number of units outstanding at
end of year.................. -- -- 210,914 --
SALOMON BROTHERS VARIABLE SERIES
FUNDS, INC.
CAPITAL FUND (3/99)
Unit Value at beginning of
year......................... 1.222 1.222 1.218 1.218
Unit Value at end of year...... 1.433 1.433 1.422 1.422
Number of units outstanding at
end of year.................. 70,934 -- 3,944,667 37,311
INVESTORS FUND (3/99)
Unit Value at beginning of
year......................... 1.088 1.088 1.084 1.084
Unit Value at end of year...... 1.244 1.244 1.234 1.234
Number of units outstanding at
end of year.................. 20,655 -- 1,626,667 --
TOTAL RETURN FUND (3/99)
Unit Value at beginning of
year......................... 1.002 1.002 0.998 0.998
Unit Value at end of year...... 1.072 1.072 1.064 1.064
Number of units outstanding at
end of year.................. 5,470 -- 216,675 --
STRONG VARIABLE INSURANCE FUNDS,
INC.
STRONG SCHAFER VALUE FUND II
(7/99)*
Unit Value at beginning of
year......................... 0.877 0.877 0.875 0.875
Unit Value at end of year...... 0.938 0.938 0.932 0.932
Number of units outstanding at
end of year.................. 6,351 -- 255,460 --
B-6
57
APPENDIX B
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES (2000) (CONTINUED)
YEAR ENDED DECEMBER 31, 2000
----------------------------------------------------------------------------------------------
STANDARD STANDARD OPTIONAL OPTIONAL STANDARD STANDARD OPTIONAL OPTIONAL
3% 5% 3% 5% 3%,.62FC 3%,1.1%FC 3%,.83FC 3%,1.40%FC
--------- --------- --------- --------- ---------- --------- -------- ----------
- ---------------------------------------------------------------------------------------------------------------------------------
TRAVELERS SERIES FUND, INC.
ALLIANCE GROWTH PORTFOLIO
(3/99)
Unit Value at beginning of
year......................... 1.303 1.303 1.298 1.298
Unit Value at end of year...... 1.057 1.057 1.048 1.048
Number of units outstanding at
end of year.................. 787,876 -- 14,295,924 36,239
MFS TOTAL RETURN PORTFOLIO
(4/99)
Unit Value at beginning of
year......................... 0.994 0.994 0.991 0.991
Unit Value at end of year...... 1.150 1.150 1.142 1.142
Number of units outstanding at
end of year.................. 177,102 -- 3,061,099 --
PUTNAM DIVERSIFIED INCOME
PORTFOLIO (6/99)
Unit Value at beginning of
year......................... 1.010 1.010 1.007 1.007
Unit Value at end of year...... 0.998 0.998 0.991 0.991
Number of units outstanding at
end of year.................. -- -- 316,519 --
SMITH BARNEY HIGH INCOME
PORTFOLIO (5/99)
Unit Value at beginning of
year......................... 1.007 1.007 1.004 1.004
Unit Value at end of year...... 0.918 0.918 0.912 0.912
Number of units outstanding at
end of year.................. 12,407 -- 283,760 --
SMITH BARNEY INTERNATIONAL
EQUITY PORTFOLIO (3/99)
Unit Value at beginning of
year......................... 1.569 1.569 1.563 1.563
Unit Value at end of year...... 1.186 1.186 1.177 1.177
Number of units outstanding at
end of year.................. 76,324 -- 3,218,634 --
SMITH BARNEY LARGE
CAPITALIZATION GROWTH
PORTFOLIO (3/99)
Unit Value at beginning of
year......................... 1.132 1.132 1.128 1.128
Unit Value at end of year...... 1.045 1.045 1.037 1.037
Number of units outstanding at
end of year.................. 265,016 -- 6,508,869 14,436
THE TRAVELERS SERIES TRUST
DISCIPLINED MID CAP STOCK
PORTFOLIO (6/99)
Unit Value at beginning of
year......................... 1.132 1.132 1.129 1.129
Unit Value at end of year...... 1.310 1.310 1.301 1.301
Number of units outstanding at
end of year.................. 87,378 -- 1,801,861 --
DISCIPLINED SMALL CAP STOCK
PORTFOLIO (5/99)+
Unit Value at beginning of
year......................... 1.150 1.150 1.147 1.147
Unit Value at end of year...... 1.165 1.165 1.156 1.156
Number of units outstanding at
end of year.................. 23,123 -- 328,710 --
EQUITY INCOME PORTFOLIO (3/99)
Unit Value at beginning of
year......................... 1.021 1.021 1.017 1.017
Unit Value at end of year...... 1.105 1.105 1.096 1.096
Number of units outstanding at
end of year.................. 212,588 -- 4,760,672 --
FEDERATED STOCK PORTFOLIO
(4/99)
Unit Value at beginning of
year......................... 0.965 0.965 0.962 0.962
Unit Value at end of year...... 0.993 0.993 0.986 0.986
Number of units outstanding at
end of year.................. 4,126 -- 500,956 --
LARGE CAP PORTFOLIO (3/99)
Unit Value at beginning of
year......................... 1.224 1.224 1.219 1.219
Unit Value at end of year...... 1.038 1.038 1.030 1.030
Number of units outstanding at
end of year.................. 334,348 -- 8,737,631 --
B-7
58
APPENDIX B
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES (2000) (CONTINUED)
YEAR ENDED DECEMBER 31, 2000
----------------------------------------------------------------------------------------------
STANDARD STANDARD OPTIONAL OPTIONAL STANDARD STANDARD OPTIONAL OPTIONAL
3% 5% 3% 5% 3%,.62FC 3%,1.1%FC 3%,.83FC 3%,1.40%FC
--------- --------- --------- --------- ---------- --------- -------- ----------
- ---------------------------------------------------------------------------------------------------------------------------------
THE TRAVELERS SERIES TRUST (CONT.)
LAZARD INTERNATIONAL STOCK
PORTFOLIO (4/99)
Unit Value at beginning of
year......................... 1.194 1.194 1.190 1.190
Unit Value at end of year...... 1.049 1.049 1.041 1.041
Number of units outstanding at
end of year.................. 43,159 -- 325,277 --
MFS MID CAP GROWTH PORTFOLIO
(5/99)
Unit Value at beginning of
year......................... 1.603 1.603 1.598 1.598
Unit Value at end of year...... 1.739 1.739 1.726 1.726
Number of units outstanding at
end of year.................. 201,277 -- 4,877,373 14,037
MFS RESEARCH PORTFOLIO (3/99)
Unit Value at beginning of
year......................... 1.213 1.213 1.209 1.209
Unit Value at end of year...... 1.136 1.136 1.127 1.127
Number of units outstanding at
end of year.................. 80,150 -- 1,184,412 --
SOCIAL AWARENESS PORTFOLIO
(3/99)
Unit Value at beginning of
year......................... 1.115 1.115 1.111 1.111
Unit Value at end of year...... 1.100 1.100 1.092 1.092
Number of units outstanding at
end of year.................. 338,770 -- 3,740,424 --
STRATEGIC STOCK PORTFOLIO
(9/99)+
Unit Value at beginning of
year......................... 0.942 0.942 0.940 0.940
Unit Value at end of year...... 1.030 1.030 1.023 1.023
Number of units outstanding at
end of year.................. -- -- 195,578 --
TRAVELERS QUALITY BOND
PORTFOLIO (3/99)
Unit Value at beginning of
year......................... 1.002 1.002 0.998 0.998 1.000 0.999 0.996 0.994
Unit Value at end of year...... 1.063 1.063 1.055 1.055 1.058 1.055 1.049 1.045
Number of units outstanding at
end of year.................. 89,190 -- 2,776,420 22,724 -- -- -- --
U.S. GOVERNMENT SECURITIES
PORTFOLIO (3/99)
Unit Value at beginning of
year......................... 0.968 0.968 0.965 0.965 0.966 0.965 0.962 0.961
Unit Value at end of year...... 1.099 1.099 1.091 1.091 1.094 1.091 1.084 1.080
Number of units outstanding at
end of year.................. 147,364 -- 2,991,693 -- -- -- -- --
UTILITIES PORTFOLIO (5/99)
Unit Value at beginning of
year......................... 0.959 0.959 0.956 0.956
Unit Value at end of year...... 1.183 1.183 1.174 1.174
Number of units outstanding at
end of year.................. 136,065 -- 2,495,494 --
VARIABLE INSURANCE PRODUCTS FUND
II (FIDELITY)
ASSET MANAGER
PORTFOLIO -- SERVICE SHARES
(6/00)
Unit Value at beginning of
year......................... 1.000 1.000 1.000 1.000
Unit Value at end of year...... 0.949 0.949 0.947 0.947
Number of units outstanding at
end of year.................. 133,640 -- 1,309,194 --
WARBURG PINCUS TRUST*
EMERGING MARKETS PORTFOLIO
(5/99)
Unit Value at beginning of
year......................... 1.506 1.506 1.502 1.502
Unit Value at end of year...... 1.022 1.022 1.015 1.015
Number of units outstanding at
end of year.................. 71,391 -- 1,387,952 --
The date next to each funding option's name reflects the date money first came
into the funding option through the Separate Account. The financial statements
for Separate Account Five and the financial statements for The Travelers Life
and Annuity Company are contained in the SAI. Funding options not listed above
had no amounts allocated to them or were not available as of December 31, 2000.
* Fund's name has changed. Refer to prospectus for new fund name.
+ No longer available to new contract owners.
++ Fund is closed.
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APPENDIX C
- --------------------------------------------------------------------------------
WAIVER OF WITHDRAWAL CHARGE FOR NURSING HOME CONFINEMENT
(Not Available under Section 457 Plans.
Not available if Owner is age 71 or older on the Contract Date.
Please refer to your Contract for state variations of this waiver.)
If, after the first contract year and before the maturity date, the annuitant
begins confinement in an eligible nursing home, you may surrender or make
withdrawal, subject to the maximum withdrawal amount described below, without
incurring a withdrawal charge. In order for the Company to waive the withdrawal
charge, the withdrawal must be made during continued confinement in an eligible
nursing home after the qualifying period has been satisfied, or within sixty
(60) days after such confinement ends. The qualifying period is confinement in
an eligible nursing home for ninety (90) consecutive days. We will require proof
of confinement in a form satisfactory to us, which may include certification by
a licensed physician that such confinement is medically necessary.
We define an eligible nursing home is defined as an institution or special
nursing unit of a hospital which:
(a) is Medicare approved as a provider of skilled nursing care services; and
(b) is not, other than in name only, an acute care hospital, a home for the
aged, a retirement home, a rest home, a community living center, or a place
mainly for the treatment of alcoholism, mental illness or drug abuse.
OR
Meets all of the following standards:
(a) is licensed as a nursing care facility by the state in which it is licensed;
(b) is either a freestanding facility or a distinct part of another facility
such as a ward, wing, unit or swing-bed of a hospital or other facility;
(c) provides nursing care to individuals who are not able to care for themselves
and who require nursing care;
(d) provides, as a primary function, nursing care and room and board; and
charges for these services;
(e) provides care under the supervision of a licensed physician, registered
nurse (RN) or licensed practical nurse (LPN);
(f) may provide care by a licensed physical, respiratory, occupational or speech
therapist; and
(g) is not, other than in name only, an acute care hospital, a home for the
aged, a retirement home, a rest home, a community living center, or a place
mainly for the treatment of alcoholism, mental illness or drug abuse.
FILING A CLAIM: You must provide the Company with written notice of a claim
during continued confinement after the 90-day qualifying period, or within sixty
days after such confinement ends.
The maximum withdrawal amount for which we will waive the withdrawal charge is
the contract value on the next valuation date following written proof of claim,
less any purchase payments made within a one-year period before confinement in
an eligible nursing home begins, less any purchase payments made on or after the
annuitant's 71st birthday.
We will pay any withdrawal requested under the scope of this waiver as soon as
we receive proper written proof of your claim, and we will pay the withdrawal in
a lump sum. You should consult with your personal tax adviser regarding the tax
impact of any withdrawals taken from your Contract.
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APPENDIX D
- --------------------------------------------------------------------------------
MARKET VALUE ADJUSTMENT
If you (the Annuitant) have selected any period certain option, you may elect to
surrender a payment equal to a portion or all of the present value of the
remaining period certain payments any time after the first contract year. There
is a surrender charge of 5% of the amount withdrawn under this option.
For fixed annuity payments, we calculate the present value of the remaining
period certain payments using a current interest rate. The current interest rate
is the then current annual rate of return offered by Us on new Fixed Annuity
period certain only annuitizations for the amount of time remaining in the
certain period. If the period of time remaining is less than the minimum length
of time for which we offer a new Fixed Annuity Period Certain Only
Annuitization, then the interest rate will be the rate of return for that
minimum length of time.
The formula for calculating the Present Value is as follows:
Present Value =LOGO[Payment(s) X (1/1 + iC)(t/365)]
Where
iC =the interest rate described above
n =the number of payments remaining in the contract owner's certain
period at the time of request for this benefit
t = number of days remaining until that payment is made, adjusting for
leap years.
If you request a percentage of the total amount available, the remaining period
certain payments will be reduced by that percentage for the remainder of the
certain period. After the certain period expires, any remaining payments will
increase to the level they would have been had no liquidation taken place.
Illustration:
Amount Annuitized: $12,589.80
Annuity Option: Life w/10 Year Certain
$1,000 Annually--first payment
Annuity Payments: immediately
For the purposes of this illustration, assume after two years (immediately
preceding the third payment), you choose to receive full liquidity, and the
current rate of return which we are then crediting for 8 year fixed Period
Certain Only Annuitizations is 4.00%. The total amount available for liquidity
is calculated as follows:
1000 + (1000/1.04) + (1000/1.04)( 7/8)2 + (1000/1.04)( 7/8)3 + (1000/1.04)
( 7/8)4 + (1000/1.04)( 7/8)5 + (1000/1.04)( 7/8)6 + (1000/1.04)( 7/8)7 =
$7002.06
The surrender penalty is calculated as 5% of $7,002.06, or $350.10.
The net result to you after subtraction of the surrender penalty of $350.10
would be $6,651.96.
You would receive no more payments for 8 years. After 8 years, if you are still
living, you will receive $1000 annually until your death.
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64
APPENDIX E
- --------------------------------------------------------------------------------
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information and
financial statements relating to The Travelers Insurance Company or The
Travelers Life and Annuity Company. A list of the contents of the Statement of
Additional Information is set forth below:
The Insurance Company
Principal Underwriter
Distribution and Principal Underwriting Agreement
Valuation of Assets
Performance Information
Federal Tax Considerations
Independent Accountants
Financial Statements
- --------------------------------------------------------------------------------
Copies of the Statement of Additional Information dated May 1, 2001 are
available without charge. To request a copy, please clip this coupon on the
dotted line above, enter your name and address in the spaces provided below, and
mail to: The Travelers Insurance Company, Annuity Investor Services, One Tower
Square, Hartford, Connecticut 06183. The Travelers Insurance Company Statement
of Additional Information is printed on Form L-21256, and The Travelers Life and
Annuity Statement of Additional Information is printed on Form L-21257.
Name:
- ------------------------------------------------
Address:
- ------------------------------------------------
---------------------------------------------------------
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L-21256 May 1, 2001
68
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Registration Fees: $2,780.00 for $10,000,000 in interests of Fixed Account
Annuitization Options with a Market Value Adjustment Cash Out Feature.
Estimate of Printing Costs: $10,000
Cost of Independent Auditors: $5,000
Item 15. Indemnification of Directors and Officers
Sections 33-770 et seq inclusive of the Connecticut General Statutes ("C.G.S.")
regarding indemnification of directors and officers of Connecticut corporations
provides in general that Connecticut corporations shall indemnify their
officers, directors and certain other defined individuals against judgments,
fines, penalties, amounts paid in settlement and reasonable expenses actually
incurred in connection with proceedings against the corporation. The
corporation's obligation to provide such indemnification generally does not
apply unless (1) the individual is wholly successful on the merits in the
defense of any such proceeding; or (2) a determination is made (by persons
specified in the statute) that the individual acted in good faith and in the
best interests of the corporation and in all other cases, his conduct was at
least not opposed to the best interests of the corporation, and in a criminal
case he had no reasonable cause to believe his conduct was unlawful; or (3) the
court, upon application by the individual, determines in view of all of the
circumstances that such person is fairly and reasonably entitled to be
indemnified, and then for such amount as the court shall determine. With respect
to proceedings brought by or in the right of the corporation, the statute
provides that the corporation shall indemnify its officers, directors and
certain other defined individuals, against reasonable expenses actually incurred
by them in connection with such proceedings, subject to certain limitations.
Citigroup Inc. also provides liability insurance for its directors and officers
and the directors and officers of its subsidiaries, including the Registrant.
This insurance provides for coverage against loss from claims made against
directors and officers in their capacity as such, including, subject to certain
exceptions, liabilities under the federal securities laws.
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.
69
Item 16. Exhibits
(a) Exhibits
1. Distribution and Principal Underwriting Agreement.
(Incorporated herein by reference to Exhibit 1 to the
Registration Statement on Form S-2, File No. 333-51804 filed
December 14, 2000.)
2. None
3(i). Charter of The Travelers Insurance Company, as amended on
October 19, 1994. (Incorporated herein by reference to
Exhibit 3(a) to the Registration Statement on Form N-4, File
No. 333-40193 filed November 17, 1997).
3(ii). By-Laws of The Travelers Insurance Company, as amended on
October 20, 1994. (Incorporated herein by reference to
Exhibit 3(b) to the Registration Statement on Form N-4, File
No. 333-40193 filed November 17, 1997.)
4. Contracts. (Incorporated herein by reference to Exhibit 4 to
the Registration Statement on Form N-4, File No. 333-58783
filed November 3, 1998.)
5. Opinion Re: Legality, Including Consent. (Incorporated herein
by reference to Exhibit 5 to the Registration Statement on
Form S-2 filed December 29, 1998.)
8. None.
10. None.
11. None
12. None
13. Incorporated by reference to the text of the Prospectus.
15. None
23(a). Consent of KPMG LLP, Independent Certified Public Accountants.
23(b). Consent of Counsel (see Exhibit 5).
24(a). Power of Attorney authorising Ernest J. Wright or Kathleen A.
McGah as signatory for J. Eric Daniels, George C. Kokulis,
Katherine M. Sullivan and Glenn Lammey. (Incorporated herein
by reference to Exhibit 24(b) to Post-Effective Amendment No.
1 to the Registration Statement on Form S-2 filed April 3,
2000.)
24(b). Power of Attorney authorising Ernest J. Wright or Kathleen A.
McGah as signatory for George C. Kokulis, Glenn Lammey, Marla
Berman Lewitus and William R. Hogan.
70
Item 17. Undertakings
The undersigned registrant hereby undertakes as follows, pursuant to Item 512(a)
of Regulation S-K:
(a) Rule 415 Offerings:
1. To file, during any period in which offers or sales of the
registered securities are being made, a post-effective
amendment to this registration statement:
i. to include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
ii. to reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the
information set forth in the registration statement;
Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the
total dollar value of securities offered would not
exceed that which was registered) and any deviation
from the low or high end of the estimated maximum
offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume
and price set represent no more than 20 percent
change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table
in the effective registration statement, and
iii. to include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment
shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona
fide offering thereof.
3. To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes as follows, pursuant to Item 512(h)
of Regulation S-K:
(h) Request for Acceleration of Effective Date:
Insofar as indemnification for liabilities 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.
71
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-2 and has duly caused this amendment to this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Hartford, State of Connecticut, on April 4,
2001.
THE TRAVELERS INSURANCE COMPANY
(Registrant)
By:*GLENN D. LAMMEY
------------------------------------------
Glenn D. Lammey, Chief Financial Officer,
Chief Accounting Officer and Controller
Pursuant to the requirements of the Securities Act of 1933, this registration
statement has been signed by the following persons in the capacities indicated
on April 4, 2001.
*GEORGE C. KOKULIS Director, President and
- ---------------------- Chief Executive Officer
(George C. Kokulis) (Principal Executive Officer)
*GLENN D. LAMMEY Director, Chief Financial Officer,
- ---------------------- Chief Accounting Officer and Controller
(Glenn D. Lammey) (Principal Financial Officer)
*MARLA BERMAN LEWITUS Director
- ----------------------
(Marla Berman Lewitus)
*WILLIAM R. HOGAN Director
- ----------------------
(William R. Hogan)
*By: /s/Ernest J. Wright, Attorney-in-Fact
72
EXHIBIT INDEX
-------------
Exhibit
No. Description Method of Filing
--- ----------- ----------------
23(a). Consent of KPMG LLP, Independent Certified Public Electronically
Accountants.
24(b). Power of Attorney authorizing Ernest J. Wright or Electronically
Kathleen A. McGah as signatory for George C. Kokulis,
Glenn Lammey, Marla Berman Lewitus and William R. Hogan