UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
--- THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2004
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
--- THE SECURITIES EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM TO
--------- ---------
--------------------
COMMISSION FILE NUMBER 33-03094
--------------------
THE TRAVELERS INSURANCE COMPANY
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CONNECTICUT 06-0566090
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
ONE CITYPLACE, HARTFORD, CONNECTICUT 06103-3415
(Address of principal executive offices) (Zip Code)
(860) 308-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----------- -----------
Indicate by checkmark whether the registrant is an accelerated filer (as defined
in Exchange Act Rule 12b-2).
Yes No X
----------- -----------
As of the date hereof, there were outstanding 40,000,000 shares of common stock,
par value $2.50 per share, of the registrant, all of which were owned by
Citigroup Insurance Holding Corporation, an indirect wholly owned subsidiary of
Citigroup Inc.
REDUCED DISCLOSURE FORMAT
The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format.
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION Page
----
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Statements of Income for the
three and six months ended June 30, 2004 and 2003 (unaudited)......................................................... 3
Condensed Consolidated Balance Sheets as of June 30, 2004 (unaudited) and
December 31, 2003..................................................................................................... 4
Condensed Consolidated Statements of Changes in
Shareholder's Equity for the three and six months ended June 30, 2004 and 2003 (unaudited)............................ 5
Condensed Consolidated Statements of Cash Flows for the
six months ended June 30, 2004 and 2003 (unaudited)................................................................... 6
Notes to Condensed Consolidated Financial Statements (unaudited)...................................................... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS......................................................................... 14
ITEM 4. CONTROLS AND PROCEDURES...................................................................................... 20
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS............................................................................................ 21
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................................................................. 21
Signatures............................................................................................................ 22
Exhibit 31.01......................................................................................................... 23
Exhibit 31.02......................................................................................................... 24
Exhibit 32.01......................................................................................................... 25
2
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
($ in millions)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------- --------------------
2004 2003 2004 2003
------- ------- ------- -------
REVENUES
Premiums $ 494 $ 498 $ 974 $ 966
Net investment income 812 751 1,646 1,515
Realized investment gains (losses) (25) (1) (12) 2
Fee income 195 144 377 289
Other revenues 15 29 54 56
------- ------- ------- -------
Total Revenues 1,491 1,421 3,039 2,828
------- ------- ------- -------
BENEFITS AND EXPENSES
Current and future insurance benefits 415 439 845 854
Interest credited to contractholders 316 314 626 622
Amortization of deferred acquisition costs 153 121 295 245
General and administrative expenses 111 111 242 222
------- ------- ------- -------
Total Benefits and Expenses 995 985 2,008 1,943
------- ------- ------- -------
Income from operations before federal income taxes 496 436 1,031 885
------- ------- ------- -------
Federal income taxes 153 121 283 209
------- ------- ------- -------
Net Income $ 343 $ 315 $ 748 $ 676
======= ======= ======= =======
See Notes to Condensed Consolidated Financial Statements.
3
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
($ in millions)
JUNE 30, 2004 DECEMBER 31, 2003
(UNAUDITED)
------------- -----------------
ASSETS
Investments (including $2,736 and $2,170 subject to securities
lending agreements) $58,002 $56,204
Separate and variable accounts 28,487 26,972
Reinsurance recoverable 4,574 4,470
Deferred acquisition costs 4,658 4,395
Other assets 2,840 3,307
------- -------
Total Assets $98,561 $95,348
------- -------
LIABILITIES
Contractholder funds $32,202 $30,252
Future policy benefits and claims 16,191 15,964
Separate and variable accounts 28,487 26,972
Other liabilities 8,740 8,803
------- -------
Total Liabilities 85,620 81,991
------- -------
SHAREHOLDER'S EQUITY
Common stock, par value $2.50; 40 million shares authorized,
issued and outstanding 100 100
Additional paid-in capital 5,447 5,446
Retained earnings 6,579 6,451
Accumulated other changes in equity from nonowner sources 815 1,360
------- -------
Total Shareholder's Equity 12,941 13,357
------- -------
Total Liabilities and Shareholder's Equity $98,561 $95,348
======= =======
See Notes to Condensed Consolidated Financial Statements.
4
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
(UNAUDITED)
($ in millions)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------- ----------------------
COMMON STOCK 2004 2003 2004 2003
-------- -------- -------- --------
Balance, beginning of period $ 100 $ 100 $ 100 $ 100
Changes in common stock -- -- -- --
-------- -------- -------- --------
Balance, end of period $ 100 $ 100 $ 100 $ 100
======== ======== ======== ========
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period $ 5,448 $ 5,444 $ 5,446 $ 5,443
Stock option tax benefit (expense) (1) -- 1 1
-------- -------- -------- --------
Balance, end of period $ 5,447 $ 5,444 $ 5,447 $ 5,444
======== ======== ======== ========
RETAINED EARNINGS
Balance, beginning of period $ 6,389 $ 5,935 $ 6,451 $ 5,638
Net income 343 315 748 676
Dividends to parent (153) (99) (620) (163)
-------- -------- -------- --------
Balance, end of period $ 6,579 $ 6,151 $ 6,579 $ 6,151
======== ======== ======== ========
ACCUMULATED OTHER CHANGES
IN EQUITY FROM NONOWNER SOURCES
Balance, beginning of period $ 1,795 $ 835 $ 1,360 $ 454
Foreign currency translation, net of tax 1 -- 1 2
Unrealized gains (losses), net of tax (1,060) 763 (606) 1,112
Derivative instrument hedging activity gains,
net of tax 79 -- 60 30
-------- -------- -------- --------
Balance, end of period $ 815 $ 1,598 $ 815 $ 1,598
======== ======== ======== ========
SUMMARY OF CHANGES IN EQUITY
FROM NONOWNER SOURCES
Net income $ 343 $ 315 $ 748 $ 676
Other changes in equity from nonowner sources (980) 763 (545) 1,144
-------- -------- -------- --------
Total changes in equity from nonowner sources $ (637) $ 1,078 $ 203 $ 1,820
======== ======== ======== ========
TOTAL SHAREHOLDER'S EQUITY
Balance, beginning of period $ 13,732 $ 12,314 $ 13,357 $ 11,635
Changes in nonowner sources (637) 1,078 203 1,820
Dividends (153) (99) (620) (163)
Changes in additional paid-in capital (1) -- 1 1
-------- -------- -------- --------
Balance, end of period $ 12,941 $ 13,293 $ 12,941 $ 13,293
======== ======== ======== ========
See Notes to Condensed Consolidated Financial Statements.
5
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
INCREASE (DECREASE) IN CASH
(UNAUDITED)
($ in millions)
SIX MONTHS ENDED
JUNE 30,
----------------------
2004 2003
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 280 $ 274
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from maturities of investments
Fixed maturities 3,344 3,227
Equity securities 79 --
Mortgage loans 379 128
Proceeds from sales of investments
Fixed maturities 4,752 6,064
Equity securities 48 67
Real estate held for sale 41 5
Purchases of investments
Fixed maturities (10,105) (11,350)
Equity securities (72) (105)
Mortgage loans (439) (127)
Policy loans, net 2 15
Short-term securities purchases, net (104) (60)
Other investment sales, net 184 126
Securities transactions in course of settlement, net 684 24
-------- --------
Net cash used in investing activities (1,207) (1,986)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES
Contractholder fund deposits 4,557 4,186
Contractholder fund withdrawals (2,960) (2,334)
Dividends to parent company (620) (163)
-------- --------
Net cash provided by financing activities 977 1,689
-------- --------
Net increase (decrease) in cash 50 (23)
Cash at beginning of period 149 186
-------- --------
Cash at end of period $ 199 $ 163
======== ========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Income taxes paid $ 62 $ 305
======== ========
See Notes to Condensed Consolidated Financial Statements.
6
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The Travelers Insurance Company (TIC, together with its subsidiaries, the
Company), is a wholly owned subsidiary of Citigroup Insurance Holding
Corporation (CIHC), an indirect wholly owned subsidiary of Citigroup Inc.
(Citigroup). Citigroup is a diversified global financial services holding
company whose businesses provide a broad range of financial services to
consumer and corporate customers around the world. The condensed
consolidated financial statements and accompanying footnotes of the Company
are prepared in conformity with accounting principles generally accepted in
the United States of America (GAAP) and are unaudited. The preparation of
financial statements in conformity with GAAP requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements and the reported amounts of revenues and
benefits and expenses during the reporting period. Actual results could
differ from those estimates.
The Company's two reportable business segments are Travelers Life &
Annuity and Primerica. The primary insurance entities of the Company are
TIC and its subsidiary The Travelers Life and Annuity Company (TLAC),
included in the Travelers Life & Annuity segment, and Primerica Life
Insurance Company (Primerica Life) and its subsidiaries, Primerica Life
Insurance Company of Canada, CitiLife Financial Limited (CitiLife) and
National Benefit Life Insurance Company (NBL), included in the Primerica
segment. Significant intercompany transactions and balances have been
eliminated. The condensed consolidated financial statements include the
accounts of the insurance entities of the Company and Tribeca Citigroup
Investments Ltd., among others, on a fully consolidated basis.
In the opinion of management, the interim financial statements reflect all
normal recurring adjustments necessary for a fair presentation of results
for the periods reported. The accompanying condensed consolidated financial
statements should be read in conjunction with the consolidated financial
statements and related notes included in the Company's Annual Report on
Form 10-K for the year ended December 31, 2003. The condensed consolidated
balance sheet as of December 31, 2003 was derived from the audited balance
sheet included in the Form 10-K. Certain financial information that is
normally included in annual financial statements prepared in accordance
with GAAP, but is not required for interim reporting purposes, has been
condensed or omitted. Certain prior year amounts have been reclassified to
conform to the 2004 presentation.
2. ACCOUNTING STANDARDS
CHANGES IN ACCOUNTING PRINCIPLES
ACCOUNTING AND REPORTING BY INSURANCE ENTERPRISES FOR CERTAIN
NONTRADITIONAL LONG-DURATION CONTRACTS AND FOR SEPARATE ACCOUNTS
On January 1, 2004, the Company adopted the Accounting Standards Executive
Committee of the American Institute of Certified Public Accountants
Statement of Position 03-1, "Accounting and Reporting by Insurance
Enterprises for Certain Nontraditional Long-Duration Contracts and for
Separate Accounts" (SOP 03-1). The main components of SOP 03-1 provide
guidance on accounting and reporting by insurance enterprises for separate
account presentation, accounting for an insurer's interest in a separate
account,
7
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
transfers to a separate account, valuation of certain liabilities,
contracts with death or other benefit features, contracts that provide
annuitization benefits, and sales inducements to contract holders.
The following summarizes the more significant aspects of the Company's
adoption of SOP 03-1:
Separate Account Presentation. SOP 03-1 requires separate account products
to meet certain criteria in order to be treated as separate account
products. For products not meeting the specified criteria, these assets and
liabilities are included in the reporting entities' general account.
The Company's adoption of SOP 03-1 resulted in the consolidation on the
Company's balance sheet of approximately $500 million of investments
previously held in separate and variable account assets and approximately
$500 million of contractholder funds previously held in separate and
variable account liabilities.
Variable Annuity Contracts with Guaranteed Minimum Death Benefit Features.
For variable annuity contracts with guaranteed minimum death benefit
features (GMDB), SOP 03-1 requires the reporting entity to categorize the
contract as either an insurance or investment contract based upon the
significance of mortality or morbidity risk. SOP 03-1 provides explicit
guidance for calculating a reserve for insurance contracts, and provides
that the reporting entity does not hold reserves for investment contracts
(i.e., there is no significant mortality risk).
The Company determined that the mortality risk on its GMDB features was not
a significant component of the overall variable annuity product, and
accordingly continued to classify these products as investment contracts.
Prior to the adoption of SOP 03-1, the Company held a reserve of
approximately $8 million to cover potential GMDB exposure. This reserve was
released during the first quarter of 2004 as part of the implementation of
SOP 03-1.
Reserving for Universal Life and Variable Universal Life Contracts. SOP
03-1 requires that a reserve, in addition to the account balance, be
established for certain insurance benefit features provided under universal
life (UL) and variable universal life (VUL) products if the amounts
assessed against the contract holder each period for the insurance benefit
feature are assessed in a manner that is expected to result in profits in
earlier years and losses in subsequent years from the insurance benefit
function.
The Company's UL and VUL products were reviewed to determine if an
additional reserve is required under SOP 03-1. The Company determined that
SOP 03-1 applied to some of its UL and VUL contracts with these features
and established an additional reserve of approximately $1 million.
Sales Inducements to Contract Holders. SOP 03-1 provides, prospectively,
that sales inducements provided to contract holders meeting certain
criteria are capitalized and amortized over the expected life of the
contract as a component of benefit expense. During the first six months of
2004, the Company capitalized sales inducements of approximately
$19.6 million in accordance with SOP 03-1. These inducements relate to
bonuses on certain products offered by the Company. For the three and six
months ended June 30, 2004, amortization of these capitalized amounts was
immaterial.
8
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
CONSOLIDATION OF VARIABLE INTEREST ENTITIES
On January 1, 2004, the Company adopted Financial Accounting Standards
Board (FASB) Interpretation No. 46, "Consolidation of Variable Interest
Entities (revised December 2003)," (FIN 46-R), which includes substantial
changes from the original FIN 46. Included in these changes, the
calculation of expected losses and expected residual returns has been
altered to reduce the impact of decision maker and guarantor fees in the
calculation of expected residual returns and expected losses. In addition,
the definition of a variable interest has been changed in the revised
guidance. The Company has evaluated the impact of applying FIN 46-R to
existing VIEs in which it has variable interests. The effect of adopting
FIN 46-R on the Company's consolidated balance sheet is immaterial. See
Note 3.
FIN 46 and FIN 46-R change the method of determining whether certain
entities, including securitization entities, should be included in the
Company's condensed consolidated financial statements. An entity is subject
to FIN 46 and FIN 46-R and is called a variable interest entity (VIE) if it
has (1) equity that is insufficient to permit the entity to finance its
activities without additional subordinated financial support from other
parties, or (2) equity investors that cannot make significant decisions
about the entity's operations or that do not absorb the expected losses or
receive the expected returns of the entity. All other entities are
evaluated for consolidation under Statement of Financial Accounting
Standards (SFAS) No. 94, "Consolidation of All Majority-Owned Subsidiaries"
(SFAS 94). A VIE is consolidated by its primary beneficiary, which is the
party involved with the VIE that has a majority of the expected losses or a
majority of the expected residual returns or both.
For any VIEs that must be consolidated under FIN 46 that were created
before February 1, 2003, the assets, liabilities, and noncontrolling
interests of the VIE are initially measured at their carrying amounts with
any difference between the net amount added to the balance sheet and any
previously recognized interest being recognized as the cumulative effect of
an accounting change. If determining the carrying amounts is not
practicable, fair value at the date FIN 46 first applies may be used to
measure the assets, liabilities, and noncontrolling interests of the VIE.
In October 2003, FASB announced that the effective date of FIN 46 was
deferred from July 1, 2003 to periods ending after December 15, 2003 for
VIEs created prior to February 1, 2003. TIC elected to implement the
provisions of FIN 46 in the 2003 third quarter, resulting in the
consolidation of VIEs increasing both total assets and total liabilities by
approximately $407 million. The implementation of FIN 46 encompassed a
review of numerous entities to determine the impact of adoption and
considerable judgment was used in evaluating whether or not a VIE should be
consolidated.
STOCK BASED COMPENSATION
On January 1, 2003, the Company adopted the fair value recognition
provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" (SFAS
123), prospectively for all awards granted, modified, or settled after
December 31, 2002. The prospective method is one of the adoption methods
provided for under SFAS No. 148, "Accounting for Stock-Based Compensation -
Transition and Disclosure," issued in December 2002. SFAS 123 requires that
compensation cost for all stock awards be calculated and recognized over
the service period (generally equal to the vesting period). This
compensation cost is determined using option pricing models, intended to
estimate the fair value of the awards at the grant date. Similar to
Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," the alternative method of accounting, an offsetting increase to
stockholders' equity under SFAS 123 is recorded equal to the amount of
compensation expense charged. During the 2004 first quarter, the Company
changed its option valuation from the Black-Scholes model to the Binomial
Method. The impact of this change was
9
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
immaterial. Compensation expense and proforma compensation expense had the
Company applied SFAS 123 to stock awards granted prior to 2003 was
insignificant for the three and six month periods ended June 30, 2004 and
2003.
FUTURE APPLICATION OF ACCOUNTING STANDARDS
OTHER-THAN-TEMPORARY IMPAIRMENTS OF CERTAIN INVESTMENTS
On March 31, 2004, the FASB ratified EITF Issue No. 03-1, "The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain
Investments," (EITF 03-1) which provides guidance on recognizing
other-than-temporary impairments on certain investments. The Issue is
effective for other-than-temporary impairment evaluations for investments
accounted for under SFAS No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," as well as non-marketable equity securities
accounted for under the cost method for reporting periods beginning after
June 15, 2004. The Company is evaluating the impact of adopting EITF 03-1
and has not yet completed this analysis.
3. INVESTMENTS
VARIABLE INTEREST ENTITIES
The following table represents the carrying amounts and classification of
consolidated assets that are collateral for VIE obligations.
$ in millions JUNE 30, 2004 DECEMBER 31, 2003
------------- ------------- -----------------
Investments $387 $400
Cash 14 11
Other 4 4
---- ----
Total assets of consolidated VIEs $405 $415
==== ====
The debt holders of these VIEs have no recourse to the Company. The
Company's maximum exposure to loss is limited to its investment of
approximately $8 million.
The Company regularly becomes involved with VIEs through its investment
activities. This involvement is generally restricted to small passive debt
and equity investments.
4. OPERATING SEGMENTS
The Company has two reportable business segments that are separately
managed due to differences in products, services, marketing strategy and
resource management. The business of each segment is maintained and
reported through separate legal entities within the Company. The management
groups of each segment report separately to the Company's ultimate parent,
Citigroup.
10
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
TRAVELERS LIFE & ANNUITY (TLA) core offerings include retail annuities,
individual life insurance, corporate owned life insurance (COLI) and
institutional annuity insurance products distributed by TIC and TLAC
principally under the Travelers Life & Annuity name. The retail annuities
products offered include fixed and variable deferred annuities and payout
annuities. The individual life insurance products include term, universal
and variable life insurance. The COLI product is a variable universal life
product distributed through independent specialty brokers. The
institutional annuity products include institutional pensions, including
guaranteed investment contracts, payout annuities, group annuities sold to
employer-sponsored retirement and savings plans and structured settlements
and funding agreements.
The PRIMERICA business segment consolidates the business of Primerica Life,
Primerica Life Insurance Company of Canada, CitiLife and NBL. The Primerica
business segment offers individual life products, primarily term insurance,
to customers through a sales force of approximately 106,000 agents. A great
majority of the domestic licensed sales force works on a part-time basis.
For a detailed description of accounting policies of the segments, see the
Company's Annual Report on Form 10-K for the year ended December 31, 2003.
The amount of investments in equity method investees and total expenditures
for additions to long-lived assets other than financial instruments,
long-term customer relationships of a financial institution, mortgage and
other servicing rights, and deferred tax assets, were not material.
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
2004 2003 2004 2003
------ ------ ------ ------
REVENUES BY SEGMENT
TLA $1,055 $1,012 $2,160 $2,007
Primerica 436 409 879 821
------ ------ ------ ------
Total Revenues $1,491 $1,421 $3,039 $2,828
====== ====== ====== ======
NET INCOME BY SEGMENT
TLA $ 223 $ 206 $ 504 $ 460
Primerica 120 109 244 216
------ ------ ------ ------
Net Income $ 343 $ 315 $ 748 $ 676
====== ====== ====== ======
AT JUNE 30,
ASSETS BY SEGMENT 2004 2003
------- -------
TLA $89,123 $80,904
Primerica 9,438 9,173
------- -------
Total Assets $98,561 $90,077
======= =======
11
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
The following tables contain key segment measurements:
BUSINESS SEGMENT INFORMATION:
FOR THE THREE MONTHS ENDED 2004 2003
---------------------- ----------------------
JUNE 30, ($ in millions) TLA PRIMERICA TLA PRIMERICA
- ------------------------ --- --------- --- ---------
Premiums $ 168 $ 326 $ 191 $ 307
Net investment income 729 83 673 78
Interest credited to contractholders 316 -- 314 --
Amortization of deferred acquisition costs 89 64 64 57
Capitalized deferred acquisition costs 161 98 132 98
Federal income taxes 91 62 64 57
FOR THE SIX MONTHS ENDED 2004 2003
---------------------- ----------------------
JUNE 30, ($ in millions) TLA PRIMERICA TLA PRIMERICA
- ------------------------ --- --------- --- ---------
Premiums $ 323 $ 651 $ 352 $ 614
Net investment income 1,479 167 1,359 156
Interest credited to contractholders 626 -- 622 --
Amortization of deferred acquisition costs 168 127 132 113
Capitalized deferred acquisition costs 338 181 250 186
Federal income taxes 171 112 97 112
The majority of the annuity business and a substantial portion of the life
business written by TLA are accounted for as investment contracts, with the
result that the deposits collected are reported as liabilities and are not
included in revenues. Deposits represent an operating statistic integral to
managing TLA operations, which management uses for measuring business
volumes, and may not be comparable to similarly captioned measurements used
by other life insurance companies. For the three months ended June 30, 2004
and 2003, deposits collected amounted to $3.7 billion and $2.6 billion,
respectively. For the six months ended June 30, 2004 and 2003, deposits
amounted to $6.9 billion and $5.7 billion, respectively.
The Company's revenue was derived almost entirely from U.S. domestic
business. Revenue attributable to foreign countries was insignificant.
The Company had no transactions with a single customer representing 10% or
more of its revenue.
5. SHAREHOLDER'S EQUITY
Statutory capital and surplus of the Company was $7.6 billion at December
31, 2003. The Company is currently subject to various regulatory
restrictions that limit the maximum amount of dividends available to be
paid to its parent without prior approval of insurance regulatory
authorities. A maximum of $845 million is available by the end of the year
2004 for such dividends without prior approval of the State of Connecticut
Insurance Department, depending upon the amount and timing of the
payments. TLAC may not pay a dividend to TIC without such approval.
Primerica may pay up to $242 million to TIC in 2004 without prior approval
of the Commonwealth of Massachusetts Insurance Department. The Company
paid dividends of $467 million and $153 million to its parent on March 30,
2004 and June 30, 2004, respectively. Due to the
12
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
timing of the payments, both these dividends were considered
extraordinary. The State of Connecticut Insurance Department approved
these extraordinary dividends.
6. COMMITMENTS AND CONTINGENCIES
Litigation
In August 1999, an amended putative class action complaint captioned Lisa
Macomber, et al. vs. Travelers Property Casualty Corporation, et al. was
filed in New Britain, Connecticut Superior Court against the Company, its
parent corporation, certain of the Company's affiliates (collectively
TLA), and the Company's former affiliate, Travelers Property Casualty
Corporation. The amended complaint alleges Travelers Property Casualty
Corporation purchased structured settlement annuities from the Company and
spent less on the purchase of those structured settlement annuities than
agreed with claimants; and that commissions paid to brokers of structured
settlement annuities, including an affiliate of the Company, were paid, in
part, to Travelers Property Casualty Corporation. The amended complaint
was dismissed and following an appeal by plaintiff in September 2002 the
Connecticut Supreme Court reversed the dismissal of several of the
plaintiff's claims. On May 26, 2004, the Connecticut Superior Court
certified a nation wide class action involving the following claims
against TLA: violation of the Connecticut Unfair Trade Practice Statute,
unjust enrichment and civil conspiracy. On June 15, 2004, the Defendants,
including TLA, appealed the Connecticut Superior Court's May 26, 2004
class certification order.
The Company is continuing to assess its potential exposure in connection
with this matter, but does not currently believe that its ultimate
resolution is likely to have a material adverse effect on the Company's
financial condition.
The Company is a defendant or co-defendant in various other litigation
matters in the normal course of business. These include civil actions,
arbitration proceedings and other matters arising in the normal course of
business out of activities as an insurance company, a broker and dealer in
securities or otherwise. In the opinion of the Company's management, the
ultimate resolution of these legal proceedings would not be likely to have
a material adverse effect on the Company's consolidated results of
operations, financial condition or liquidity.
Other
The Company is a member of the Federal Home Loan Bank of Boston (the Bank),
and in this capacity has entered into a funding agreement (the agreement)
with the Bank where a blanket-lien has been granted to collateralize the
Bank's deposits. The Company maintains control of these assets, and may
use, commingle, encumber or dispose of any portion of the collateral as
long as there is no event of default and the remaining qualified collateral
is sufficient to satisfy the collateral maintenance level. The agreement
further states that upon any event of default, the Bank's recovery is
limited to the amount of the member's outstanding funding agreement. The
amount of the Company's liability for funding agreements with the Bank as
of June 30, 2004 is $1 billion, included in contractholder funds. The
Company holds $56.9 million of common stock of the Bank, included in
Investments.
The Company has provided a guarantee on behalf of Citicorp International
Life Insurance Company, Ltd. (CILIC), an affiliate. The Company has
guaranteed to pay claims up to $1 billion of life insurance coverage for
CILIC. This guarantee takes effect if CILIC cannot pay claims because of
insolvency, liquidation or rehabilitation. Life insurance coverage in force
under this guarantee at June 30, 2004 is $187 million. The Company does not
hold any collateral related to this guarantee.
13
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Management's narrative analysis of the results of operations is presented in
lieu of Management's Discussion and Analysis of Financial Condition and Results
of Operations (MDA), pursuant to General Instruction H(2)(a) of Form 10-Q. This
MDA should be read in conjunction with the MDA included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2003.
The Company's Annual Report on Form 10-K, its quarterly reports on Form 10-Q and
any current reports on Form 8-K, and all amendments to these reports, are
available on the Travelers Life & Annuity website at
http://www.travelerslife.com by selecting the "Financial Information" page and
selecting "SEC Filings."
CONSOLIDATED OVERVIEW ($ in millions)
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
2004 2003 2004 2003
------ ------ ------ ------
Revenues $1,491 $1,421 $3,039 $2,828
Insurance benefits and interest credited 731 753 1,471 1,476
Operating expenses 264 232 537 467
------ ------ ------ ------
Income before taxes 496 436 1,031 885
Income taxes 153 121 283 209
------ ------ ------ ------
Net income $ 343 $ 315 $ 748 $ 676
====== ====== ====== ======
The Travelers Insurance Company (TIC, together with its subsidiaries, the
Company), is comprised of two business segments, Travelers Life & Annuity (TLA)
and Primerica. Net income increased 9% to $343 million for the quarter ended
June 30, 2004 from $315 million in the prior year quarter. Net income increased
11% to $748 million for the six months ended June 30, 2004 from $676 million in
the prior year period. Net income by segment was:
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
JUNE 30, JUNE 30,
($ in millions) 2004 2003 2004 2003
---- ---- ---- ----
TLA $223 $206 $504 $460
Primerica 120 109 244 216
---- ---- ---- ----
$343 $315 $748 $676
==== ==== ==== ====
TLA core offerings include retail annuities, individual life insurance,
corporate owned life insurance (COLI) and institutional annuity insurance
products distributed by TIC and The Travelers Life and Annuity Company (TLAC)
principally under the Travelers Life & Annuity name. The Company has a license
from The St. Paul Travelers Companies, Inc. to use the names "Travelers Life &
Annuity," "The Travelers Insurance Company," "The Travelers Life and Annuity
Company" and related names in connection with the Company's business. Among the
range of retail annuity products offered are fixed and variable deferred
annuities and payout annuities. Individual life insurance products offered
include term, universal and variable life insurance. The COLI product is a
variable universal life product distributed through independent specialty
brokers. The institutional annuity products include institutional pensions,
including guaranteed investment contracts (GICs), payout annuities, group
annuities sold to employer-sponsored retirement and savings plans and structured
settlements and funding agreements.
The Primerica business segment offers individual life products, primarily term
insurance, to customers through a sales force of approximately 106,000 agents. A
great majority of the domestic licensed sales force works on a part-time basis.
14
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
The following discussion presents in more detail each business segment's
performance.
TRAVELERS LIFE & ANNUITY
FOR THE THREE MONTHS ENDED JUNE 30, 2004 2003
------ ------
($ in millions)
Revenues $1,055 $1,012
Insurance benefits and interest credited 600 624
Operating expenses 141 118
------ ------
Income before taxes 314 270
Income taxes 91 64
------ ------
Net income $ 223 $ 206
====== ======
Net income of $223 million in the second quarter of 2004 increased 8% from $206
million in the second quarter of 2003. The increase reflects favorable business
volumes, and higher retained investment margins and an $11 million after-tax
release of institutional annuities benefit reserves, partially offset by
realized investment losses and higher expenses, including higher deferred
acquisition cost (DAC) amortization.
Net investment income (NII) increased $56 million to $729 million for the second
quarter of 2004 from $673 million in the second quarter of 2003. This increase
was driven by a larger invested asset base from increased business volumes,
partially offset by reduced investment yields, which were 6.36% and 6.42% in the
three-month periods ended June 30, 2004 and 2003, respectively.
The majority of the annuity business and a substantial portion of the life
business written by TLA are accounted for as investment contracts, with the
result that the deposits collected are reported as liabilities. Deposits
represent an operating statistic used for measuring business volumes, which
management of the Company uses to manage the life insurance and annuities
operations, and may not be comparable to similarly captioned measurements used
by other life insurance companies. The following table shows net written
premiums and deposits by product type for each of the quarters ended June, 2004
and 2003.
2004 2003
---- ----
($ IN MILLIONS) Premiums Deposits Premiums Deposits
Retail annuities
Fixed $ -- $ 134 $ -- $ 174
Variable -- 1,254 -- 953
Individual payout 10 8 5 6
------- ------- ------- -------
Total retail annuities 10 1,396 5 1,133
Institutional annuities 127 2,001 152 1,209
Individual life insurance:
Direct periodic premiums & deposits 35 170 36 150
Single premium deposits -- 173 -- 80
Reinsurance (13) (25) (11) (23)
------- ------- ------- -------
Total individual life insurance 22 318 25 207
Other 9 -- 9 --
------- ------- ------- -------
Total $ 168 $ 3,715 $ 191 $ 2,549
======= ======= ------- =======
Retail annuity deposits of $1.4 billion in the second quarter of 2004 increased
23% from the second quarter of 2003, reflecting strong variable annuity sales
due to improved equity market conditions in 2004 and sales of a guaranteed
minimum withdrawal benefit feature. Retail annuity account balances were $34.7
billion at June 30, 2004, up from $29.8 billion at June 30, 2003. This increase
reflects equity market growth in variable annuity investments of $2.9 billion
subsequent to June 30, 2003, and $2.0 billion of net sales over the previous
twelve months, due to sales growth and lower surrender rates.
15
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
Institutional annuities deposits (excluding the Company's employee pension plan
deposits) increased 66% in the second quarter of 2004 to $2.0 billion from the
comparable period of 2003, reflecting strong second quarter 2004 GIC sales
compared to the prior year quarter. Institutional annuity account balances and
benefits reserves reached $26.5 billion at June 30, 2004, up 12% from $23.6
billion at June 30, 2003. This volume growth reflects an increase in GIC and
payout institutional annuities benefit reserves over the last 12 months.
Deposits for the individual life insurance business for the second quarter of
2004 increased 54% to $318 million from the 2003 second quarter, primarily due
to an increase of $93 million in universal life single premium sales and a $20
million increase in direct periodic premium sales. Life insurance in force was
$94.3 billion at June 30, 2004, up from $89.5 billion at December 31, 2003.
TLA insurance benefits and interest credited decreased 3.8% to $600 million for
the three months ended June 30, 2004 from $624 million in the prior year period,
primarily related to a $16 million pretax release of institutional annuities
benefits reserves and lower credited rates offset by higher business volumes.
In the second quarter of 2004, TLA operating expenses of $141 million increased
19% from $118 million in the prior year quarter, primarily due to volume-related
insurance benefits expenses and DAC amortization. The amortization of
capitalized DAC is a significant component of TLA expenses and totaled $89
million and $64 million for the three months ended June 30, 2004 and 2003,
respectively. TLA's recording of DAC varies based upon product type. DAC for
retail annuities, both fixed and variable, and payout annuities employs a level
yield methodology. DAC for universal life and COLI are amortized in relation to
estimated gross profits, with traditional life, including term insurance and
other products amortized in relation to anticipated premiums.
PRIMERICA
FOR THE THREE MONTHS ENDED JUNE 30, 2004 2003
---- ----
($ in millions)
Revenues $436 $409
Insurance benefits 131 129
Operating expenses 123 114
---- ----
Income before taxes 182 166
Income taxes 62 57
---- ----
Net income $120 $109
==== ====
Net income of $120 million in the second quarter of 2004 increased 10% from $109
million in the second quarter of 2003, reflecting favorable business volumes and
higher NII, partially offset by higher DAC amortization and volume-related
insurance benefits expenses. NII increased 6% to $83 million in the second
quarter of 2004 from the prior year quarter, primarily related to income from
private equities of $7.9 million and a larger invested asset base, partially
offset by lower yields.
Total life insurance in force reached $522.0 billion at June 30, 2004, up from
$503.6 billion at December 31, 2003, reflecting good in-force policy retention
and higher volume of sales. The face amount of new term life insurance sales was
$24.5 billion for the three-month period ended June 30, 2004, compared to $20.9
billion for the prior year period.
The amortization of capitalized DAC, which increased from $57 million in the
second quarter of 2003 to $64 million in the second quarter of 2004, is a
significant component of Primerica's expenses. All of Primerica's DAC is
associated with traditional life products, which are amortized in relation to
anticipated premiums. Amortized DAC has increased slightly as a percentage of
direct premiums. The increase in the amount of amortization over the second
quarter of 2003 is associated with growth in sales and in-force business.
16
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
Earned premiums net of reinsurance were $326 million in the second quarter of
2004 compared to $307 million in the prior year period, including $307 million
and $290 million, respectively, for Primerica individual term life policies.
TRAVELERS LIFE & ANNUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2004 2003
------ ------
($ in millions)
Revenues $2,160 $2,007
Insurance benefits and interest credited 1,197 1,211
Operating expenses 288 239
------ ------
Income before taxes 675 557
Income taxes 171 97
------ ------
Net income $ 504 $ 460
====== ======
Net income for the six months ended June 30, 2004 increased 10% to $504 million
from $460 million from the prior year period, primarily related to higher
business volumes, higher retained investment margins and an $11 million
after-tax release of institutional annuities benefit reserves, partially offset
by an $8 million after-tax increase in realized investment losses, higher DAC
amortization and lower tax benefits related to an adjustment to a dividends
received deduction (DRD), which was $23 million in the first six months of 2004
and $39 million in the prior year period. The DRD benefit reduced the effective
tax rate to 17% for the prior year six month period ended June 30, 2003 and to
25% in the current year six month period ended June 30, 2004.
NII was $1.5 billion and $1.4 billion for the six months ended June 30, 2004 and
2003, respectively. This increase was driven by a larger invested asset base
from increased business volumes, partially offset by reduced investment yields,
which were 6.54% and 6.60% for the six month periods ended June 30, 2004 and
2003, respectively.
The majority of the annuity business and a substantial portion of the life
business written by TLA are accounted for as investment contracts, such that the
premiums are considered deposits and are not included in revenues. Deposits
represent a statistic integral to managing TLA operations, which management uses
for measuring business volumes, and may not be comparable to similarly captioned
measurements used by other life insurance companies. The following table shows
net written premiums and deposits by product type for the six months ended June
30, 2004 and 2003.
2004 2003
---- ----
($ IN MILLIONS) Premiums Deposits Premiums Deposits
-------- -------- -------- --------
Retail annuities
Fixed $ -- $ 282 $ -- $ 310
Variable -- 2,471 -- 1,756
Individual payout 16 16 15 16
------- ------- ------- -------
Total retail annuities 16 2,769 15 2,082
Institutional annuities 245 3,460 269 3,203
Individual life insurance:
Direct periodic premiums & deposits 70 424 69 326
Single premium deposits -- 342 -- 129
Reinsurance (25) (51) (18) (46)
------- ------- ------- -------
Total individual life insurance 45 715 51 409
Other 17 -- 17 --
------- ------- ------- -------
Total $ 323 $ 6,944 $ 352 $ 5,694
======= ======= ======= =======
17
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
Retail annuity deposits in the first six months of 2004 increased 33% from the
prior year period, reflecting strong variable annuity sales due to improved
equity market conditions in 2004 and sales of a guaranteed minimum withdrawal
benefit feature. Weak equity markets and competitive pressures adversely
affected the first half of 2003.
Institutional annuities deposits (excluding the Company's employee pension plan
deposits) of $3.5 billion in the first six months of 2004 were up 8% from $3.2
billion in the comparable period of 2003, driven by strong second quarter 2004
GIC sales. The six month 2003 sales included $800 million in funding agreements
sold to the Federal Home Loan Bank of Boston in the first quarter of 2003.
Deposits for the life insurance business in the first six months of 2004 were up
75% from the comparable period of 2003, driven by very strong universal life
single premium sales and higher direct periodic premium sales.
For the first six months of 2004, TLA operating expenses increased 21% from the
comparable prior year six month period, primarily due to an increase of $36
million of DAC amortization.
PRIMERICA
FOR THE SIX MONTHS ENDED JUNE 30, 2004 2003
---- ----
($ in millions)
Revenues $879 $821
Insurance benefits 274 265
Operating expenses 249 228
---- ----
Income before taxes 356 328
Income taxes 112 112
---- ----
Net income $244 $216
==== ====
Net income for the six months ended June 30, 2004 increased 13% to $244 million
from $216 million for the six months ended June 30, 2003. Included in net income
are net after-tax realized investment gains of $2 million and $4 million for the
2004 and 2003 six-month periods, respectively.
NII increased 7% to $167 million for the six months of 2004 from the prior year,
primarily related to income of $11.7 million from private equities and a larger
invested asset base, offset by lower yields.
The amortization of capitalized DAC increased to $127 million in the first six
months of 2004 from $113 million in the prior year period. Amortized DAC has
increased slightly as a percentage of direct premiums. The increase in the
amount of amortization over 2003 is associated with growth in sales and in-force
business.
Earned premiums net of reinsurance were $651 million in the first six months of
2004 compared to $614 million in the prior year period, including $615 million
and $582 million, respectively, for Primerica Life individual term life
policies.
OUTLOOK
The Company's business is significantly affected by movements in the U.S. equity
and fixed income credit markets. U.S. equity and credit market events can have
both positive and negative effects on the deposit, revenue and policy retention
performance of the business. A sustained weakness in the equity markets will
decrease revenues and earnings in variable products. Declines in credit quality
of issuers will have a negative effect on earnings. This statement is a
forward-looking statement within the meaning of the Private Securities
Litigation Reform Act. See "Forward-Looking Statements" on page 19.
18
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
INSURANCE REGULATIONS
Risk-based capital requirements are used as minimum capital requirements by the
National Association of Insurance Commissioners and the states to identify
companies that merit further regulatory action. At December 31, 2003, the
Company had adjusted capital in excess of amounts requiring any regulatory
action.
The Company is subject to various regulatory restrictions that limit the maximum
amount of dividends available to be paid to its parent without prior approval of
insurance regulatory authorities in the state of domicile. A maximum of $845
million is available by the end of 2004 for such dividends without prior
approval of the State of Connecticut Insurance Department, depending upon the
amount and timing of the payments. TLAC may not pay a dividend to TIC without
such approval. Primerica may pay up to $242 million to TIC without prior
approval of the Commonwealth of Massachusetts Insurance Department. The Company
paid dividends of $467 million and $153 million to its parent on March 30, 2004
and June 30, 2004, respectively. Due to the timing of the payments, both these
dividends were considered extraordinary. The State of Connecticut Insurance
Department approved these extraordinary dividends. The Company may seek approval
from the State of Connecticut Insurance Department for additional extraordinary
dividend payments during the remainder of 2004. This statement is a
forward-looking statement within the meaning of the Private Securities
Litigation Reform Act. See "Forward-Looking Statements" on this page.
FUTURE APPLICATIONS OF ACCOUNTING STANDARDS
See Note 2 of Notes to Condensed Consolidated Financial Statements for a
discussion of recently issued accounting pronouncements.
FORWARD-LOOKING STATEMENTS
Certain of the statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. The Company's actual results may differ materially from
those included in the forward-looking statements. Forward-looking statements are
typically identified by the words "believe," "expect," "anticipate," "intend,"
"estimate," "may increase," "predict," and similar expressions or future or
conditional verbs such as "will," "should," "would," and "could." These forward-
looking statements involve risks and uncertainties including, but not limited
to, regulatory matters, the resolution of legal proceedings and the potential
impact of a decline in credit quality of investments on earnings.
19
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
ITEM 4. CONTROLS AND PROCEDURES
DISCLOSURE CONTROLS AND PROCEDURES
The Company's management, with the participation of the Company's Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness
of the Company's disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended ("Exchange Act")) as of the end of the period covered by this report.
Based on such evaluation, the Company's Chief Executive Officer and Chief
Financial Officer have concluded that, as of the end of such period, the
Company's disclosure controls and procedures are effective in recording,
processing, summarizing and reporting, on a timely basis, information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act.
INTERNAL CONTROL OVER FINANCIAL REPORTING
There have not been any changes in the Company's internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fiscal quarter to which this report relates that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.
20
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In August 1999, an amended putative class action complaint captioned Lisa
Macomber, et al. vs. Travelers Property Casualty Corporation, et al. was
filed in New Britain, Connecticut Superior Court against the Company, its
parent corporation, certain of the Company's affiliates (collectively
TLA), and the Company's former affiliate, Travelers Property Casualty
Corporation. The amended complaint alleges Travelers Property Casualty
Corporation purchased structured settlement annuities from the Company and
spent less on the purchase of those structured settlement annuities than
agreed with claimants; and that commissions paid to brokers of structured
settlement annuities, including an affiliate of the Company, were paid, in
part, to Travelers Property Casualty Corporation. The amended complaint
was dismissed and following an appeal by plaintiff in September 2002 the
Connecticut Supreme Court reversed the dismissal of several of the
plaintiff's claims. On May 26, 2004, the Connecticut Superior Court
certified a nation wide class action involving the following claims
against TLA: violation of the Connecticut Unfair Trade Practice Statute,
unjust enrichment and civil conspiracy. On June 15, 2004, the Defendants,
including TLA, appealed the Connecticut Superior Court's May 26, 2004
class certification order.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
EXHIBIT NO. DESCRIPTION
----------- -----------
3.01 Charter of The Travelers Insurance Company (the
"Company"), as effective October 19, 1994, incorporated
by reference to Exhibit 3.01 to the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended
September 30, 1994 (File No. 33-33691) (the "Company's
September 30, 1994 10-Q").
3.02 By-laws of the Company, as effective October 20, 1994,
incorporated by reference to Exhibit 3.02 to the
Company's September 30, 1994 10-Q.
31.01+ Certification of chief financial officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
31.02+ Certification of chief executive officer pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
32.01+ Certification pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
(B) REPORTS ON FORM 8-K
None
- ----------
+Filed herewith
21
THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE TRAVELERS INSURANCE COMPANY
(Registrant)
Date August 13, 2004 /s/ Glenn D. Lammey
-------------------------- ----------------------------------------
Glenn D. Lammey
Senior Executive Vice President,
Chief Financial Officer and Chief
Accounting Officer
(Principal Financial Officer and
Principal Accounting Officer)
22