Registration Statement No. 333-69793
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-1
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
Post--Effective Amendment No.7
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 Cityplace
Hartford, Connecticut 06103-3415
(860) 308-1000
(Address, including Zip Code, and Telephone Number, including Area Code,
of Registrant's Principal Executive Offices)
James L. Lipscomb, Esq.
Executive Vice President and General Counsel
The Travelers Insurance Company
One Cityplace
Hartford, Connecticut 06103-3415
(212) 576-0676
(Name, Address, including Zip Code, and Telephone Number,
including Area Code of Agent for Service)
Copies to:
Diane E. Ambler
Krikpatrick & Lockhart Nicholson Graham LLP
1601 K Street, NW
Washington, DC 20006
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 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 ______.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to Section 8(a), may
determine.
THE TRAVELERS INSURANCE COMPANY
FORM OF MODIFIED CROSS REFERENCE SHEET
METLIFE RETIREMENT ANNUITY
Item No. Form S-1 Registration Item Form S-2 Registration Item Location in Prospectus
- -------- ------------------------------ ------------------------------ ----------------------------
1 Forepart of the Registration Forepart of the Registration Forepart of the Registration
Statement and Outside Statement and Outside Statement and Cover Page
Front Cover Page of Front Cover Page of
Prospectus Prospectus
2 Inside Front and Outside Inside Front and Outside Front and Back Cover
Back Cover Pages of Back Cover Pages of Pages
Prospectus Prospectus
3 Summary Information, Risk Summary Information, Risk Summary
Factors and Ratio of Factors and Ratio of
Earnings to Fixed Charges Earnings to Fixed Charges
4 Use of Proceeds Use of Proceeds The Annuity Period - The
Liquidity Benefit
5 Determination of Offering Determination of Offering Purchase Payments
Price Price
6 Dilution Dilution N/A
7 Selling Security Holders Selling Security Holders N./A
8 Plan of Distribution Plan of Distribution Distribution of Contracts
9 Description of Securities to Description of Securities to Summary, The Annuity
be Registered be Registered Period - The Liquidity
Benefit
10 Interests of Named Experts Interests of Named Experts Statement of Additional
and Counsel and Counsel Information - Independent
Registered Public
Accounting Firms
11 Information with Respect to Information with Respect to The Insurance Company
Registrant Registrant
11A Material Changes N/A [Included in Item
11(a)(4)]
12 Incorporation of Certain Incorporation of Certain Incorporation of Certain
Information by Reference Information by Reference Documents by Reference
12A Disclosure of Commission N/A See Part II - Item 14
Position on Indemnification
for Securities Act Liabilities
13 N/A Disclosure of Commission N/A
Position on Indemnification
for Securities Act Liabilities
METLIFE RETIREMENT ACCOUNT ANNUITY PROSPECTUS:
(Formerly Travelers Retirement Account Annuity)
METLIFE OF CT SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES
(Formerly The Travelers Separate Account Five for Variable Annuities)
METLIFE OF CT SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES
(Formerly The Travelers Separate Account Six for Variable Annuities)
This prospectus describes MetLife Retirement Account Annuity, a flexible
premium deferred variable annuity contract (the "Contract") issued by MetLife
Insurance Company of Connecticut or MetLife Life and Annuity Company of
Connecticut (formerly The Travelers Insurance Company and The Travelers Life
and Annuity Company, respectively).* MetLife Life and Annuity Company does not
solicit or issue insurance products in the state of New York. Refer to the
first page of your Contract for the name of your issuing company. 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." The
Contract is not available to new purchasers. Current Contract Owners may make
additional purchase payments.
You can choose to have your premium ("Purchase Payments") and any applicable
Purchase Payment Credits accumulate on a variable and, subject to availability,
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:
AMERICAN FUNDS INSURANCE SERIES
American Funds Global Growth Fund -- Class 2
American Funds Growth Fund -- Class 2
American Funds Growth-Income Fund -- Class 2
DELAWARE VIP TRUST -- STANDARD CLASS
Delaware VIP Small Cap Value Series
DREYFUS VARIABLE INVESTMENT FUND -- INITIAL SHARES
Dreyfus Variable Investment Fund Appreciation Portfolio
Dreyfus Variable Investment Fund Developing Leaders Portfolio
FRANKLIN TEMPLETON VARIABLE INSURANCE PRODUCTS TRUST
Templeton Developing Markets Securities Fund -- Class 2
Templeton Foreign Securities Fund -- Class 2
JANUS ASPEN SERIES
Mid Cap Growth Portfolio -- Service Shares
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Small Cap Portfolio
LEGG MASON PARTNERS VARIABLE PORTFOLIOS I, INC.
Legg Mason Partners Variable All Cap Portfolio -- Class I+
Legg Mason Partners Variable Investors Portfolio+
LEGG MASON PARTNERS VARIABLE PORTFOLIOS II
Legg Mason Partners Variable Appreciation Portfolio+
Legg Mason Partners Variable Equity Index Portfolio -- Class II+
LEGG MASON PARTNERS VARIABLE PORTFOLIOS III, INC.
Legg Mason Partners Variable Adjustable Rate Income Portfolio+
Legg Mason Partners Variable Aggressive Growth Portfolio+
Legg Mason Partners Variable High Income Portfolio+
Legg Mason Partners Variable Large Cap Growth Portfolio+
Legg Mason Partners Variable Social Awareness Stock Portfolio+
LEGG MASON PARTNERS VARIABLE PORTFOLIOS V
Legg Mason Partners Variable Small Cap Growth Opportunities Portfolio+
MET INVESTORS SERIES TRUST
Batterymarch Mid-Cap Stock Portfolio -- Class A+
Dreman Small-Cap Value Portfolio -- Class A+
Harris Oakmark International Portfolio -- Class A+
Janus Capital Appreciation Portfolio -- Class A+
Legg Mason Partners Managed Assets Portfolio+
Lord Abbett Bond Debenture Portfolio -- Class A+
Lord Abbett Growth and Income Portfolio -- Class B+
Lord Abbett Mid-Cap Value Portfolio -- Class B+
Mercury Large-Cap Core Portfolio -- Class A+
Met/AIM Capital Appreciation Portfolio -- Class A+
Met/AIM Small Cap Growth Portfolio -- Class A+
MFS(R) Value Portfolio -- Class A+
Neuberger Berman Real Estate Portfolio -- Class A+
Pioneer Fund Portfolio -- Class A+
Pioneer Mid-Cap Value Portfolio -- Class A
Pioneer Strategic Income Portfolio -- Class A+
METLIFE INVESTMENT FUNDS, INC.
MetLife Investment Diversified Bond Fund+ -- Class I
MetLife Investment International Stock Fund+ -- Class I
MetLife Investment Large Company Stock Fund+ -- Class I
MetLife Investment Small Company Stock Fund+ -- Class I
METROPOLITAN SERIES FUND, INC.
BlackRock Aggressive Growth Portfolio -- Class D+
BlackRock Bond Income Portfolio -- Class A+
BlackRock Money Market Portfolio -- Class A+
FI Large Cap Portfolio -- Class A+
FI Value Leaders Portfolio -- Class D+
MFS(R) Total Return Portfolio -- Class F+
Oppenheimer Global Equity Portfolio -- Class B+
Western Asset Management High Yield Bond Portfolio -- Class A+
Western Asset Management U.S. Government Portfolio -- Class A+
PIMCO VARIABLE INSURANCE TRUST -- Administrative Class
Real Return Portfolio
Total Return Portfolio
PUTNAM VARIABLE TRUST
Putnam VT Small Cap Value Fund -- Class IB
VAN KAMPEN LIFE INVESTMENT TRUST
Van Kampen Life Investment Trust
Comstock Portfolio -- CLASS II
VARIABLE INSURANCE PRODUCTS FUND -- Service Class 2
VIP Contrafund(R) Portfolio
VIP Mid Cap Portfolio
METROPOLITAN SERIES FUND, INC. -- ASSET ALLOCATION PORTFOLIOS - CLASS B
MetLife Conservative Allocation Portfolio
MetLife Conservative to Moderate Allocation Portfolio
MetLife Moderate Allocation Portfolio
MetLife Moderate to Aggressive Allocation Portfolio
MetLife Aggressive Allocation Portfolio
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(+)This Variable Funding Option has been subject to a merger, substitution or
name change. Please see Appendix F.
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. This prospectus provides the information that
you should know before investing in the Contract. Please keep this prospectus
for future reference. You can receive additional information about your
Contract by requesting a copy of the Statement of Additional Information
("SAI") dated May 1, 2006.
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 us
at MetLife Insurance Company of Connecticut, Annuity Operations and Services,
One Cityplace, Hartford, 185 Asylum Street, Connecticut 06103-3415, call
1-800-233-3591 or access the SEC's website (http://www.sec.gov). See Appendix H
for the SAI's table of contents.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR THE ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
VARIABLE ANNUITY CONTRACTS ARE NOT DEPOSITS OF ANY BANK, AND ARE NOT INSURED OR
GUARANTEED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENT
AGENCY.
PROSPECTUS DATED MAY 1, 2006
- --------
* The Travelers Insurance Company has filed for approval to change its name
to MetLife Insurance Company of Connecticut. The Travelers Life and Annuity
Company has filed for approval to change its name to MetLife Life and
Annuity Company of Connecticut. The change will be effective May 1, 2006
pending regulatory approval. You will receive a contract endorsement
notifying you of the name change once it has occurred.
TABLE OF CONTENTS
Glossary................................................................... 3
Summary.................................................................... 5
Fee Table.................................................................. 9
Condensed Financial Information............................................ 18
The Annuity Contract....................................................... 18
Contract Owner Inquiries.................................................. 19
Purchase Payments......................................................... 19
Purchase Payment Credits.................................................. 19
Conservation Credit....................................................... 20
Accumulation Units........................................................ 20
The Variable Funding Options.............................................. 20
Fixed Account.............................................................. 26
Charges and Deductions..................................................... 26
General................................................................... 26
Withdrawal Charge......................................................... 27
Free Withdrawal Allowance................................................. 28
Transfer Charge........................................................... 28
Mortality and Expense Risk Charge......................................... 29
Variable Funding Option Expenses.......................................... 29
Floor Benefit/Liquidity Benefit Charges................................... 29
CHART Asset Allocation Program Charges.................................... 29
Premium Tax............................................................... 30
Changes in Taxes Based upon Premium or Value.............................. 30
Transfers.................................................................. 30
Market Timing............................................................. 30
CHART Asset Allocation Program............................................. 33
Access to Your Money....................................................... 34
Systematic Withdrawals.................................................... 35
Ownership Provisions....................................................... 35
Types of Ownership........................................................ 35
Contract Owner.......................................................... 35
Beneficiary............................................................. 36
Death Benefit.............................................................. 36
Death Proceeds before the Maturity Date................................... 36
Step-Up Death Benefit Value............................................... 37
Payment of Proceeds....................................................... 38
Beneficiary Contract Continuance.......................................... 38
Planned Death Benefit..................................................... 39
Death Proceeds after the Maturity Date.................................... 39
The Annuity Period......................................................... 39
Maturity Date............................................................. 39
Liquidity Benefit......................................................... 40
Allocation of Annuity..................................................... 41
Variable Annuity.......................................................... 41
Fixed Annuity............................................................. 42
Payment Options............................................................ 42
Election of Options....................................................... 42
Annuity Options........................................................... 43
Miscellaneous Contract Provisions.......................................... 43
Right to Return........................................................... 43
Termination............................................................... 44
Required Reports.......................................................... 44
Suspension of Payments.................................................... 44
The Separate Accounts...................................................... 44
Performance Information................................................... 45
Federal Tax Considerations................................................. 45
General Taxation of Annuities............................................. 45
Qualified Annuity Contracts............................................... 46
Taxation of Qualified Annuity Contracts................................. 47
Mandatory Distributions for Qualified Plans............................. 47
Treatment of Charges for Optional Benefits.............................. 49
Taxation of Death Benefit Proceeds...................................... 49
Other Tax Considerations.................................................. 49
Penalty Tax for Premature Distribution.................................. 48
Puerto Rico Tax Considerations.......................................... 49
Non-Resident Aliens..................................................... 50
Hurricane Relief........................................................ 50
Incorporation of Certain Documents by Reference............................ 50
Other Information.......................................................... 51
The Insurance Companies................................................... 51
Financial Statements...................................................... 52
Distribution of the Contracts............................................. 52
Conformity with State and Federal Laws.................................... 54
Voting Rights............................................................. 54
Restrictions on Financial Transactions.................................... 54
Legal Proceedings......................................................... 55
Appendix A: Condensed Financial Information for
MetLife Insurance Company of Connecticut: Separate Account Five A-1
Appendix B: Condensed Financial Information for
MetLife Life and Annuity Company of Connecticut:
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: What You Need To Know If You Are A Texas Optional Retirement
Program Participant....................................................... E-1
Appendix -- F: Additional Information Regarding the Underlying Funds....... F-1
Appendix G: Portfolio Legal and Marketing Names............................ G-1
Appendix H: Contents of the Statement of Additional Information............ H-1
2
GLOSSARY
ACCUMULATION UNIT -- an accounting unit of measure used to calculate the value
of this Contract before Annuity Payments begin.
ANNUITANT -- the person on whose life the Maturity Date and Annuity Payments
depend.
ANNUITY PAYMENTS -- a series of periodic payments (a) for life; (b) for life
with a minimum number of payments; (c) for the joint lifetime of the Annuitant
and another person, and thereafter during the lifetime of the survivor; or
(d) for a fixed period.
ANNUITY UNIT -- an accounting unit of measure used to calculate the amount of
Annuity Payments.
CASH SURRENDER VALUE -- the Contract Value less any withdrawal charge and
premium tax not previously deducted.
CODE -- the Internal Revenue Code of 1986, as amended, and all related laws and
regulations that are in effect during the term of this Contract.
CONTINGENT ANNUITANT -- the individual who becomes the Annuitant when the
Annuitant who is not the owner dies prior to the Maturity Date.
CONTRACT DATE -- the date on which the Contract is issued.
CONTRACT OWNER (you) -- the person named in the Contract (on the specifications
page) as the owner of the Contract.
CONTRACT VALUE -- Purchase Payments and any associated Purchase Payment
Credits, plus or minus any investment experience on the amounts allocated to
the variable funds or interest on amounts allocated to the Fixed Account,
adjusted by any applicable charges and withdrawals.
CONTRACT YEARS -- twelve month periods beginning with the Contract Date.
DEATH REPORT DATE -- the day on which we have received 1) Due Proof of Death
and 2) written payment instructions or election of spousal or beneficiary
contract continuation.
DUE PROOF OF DEATH -- (i) a copy of a certified death certificate; (ii) a copy
of a certified decree of a court of competent jurisdiction as to the finding of
death; (iii) a written statement by a medical doctor who attended the deceased;
or (iv) any other proof satisfactory to us.
FIXED ACCOUNT -- an account that consists of all of the assets under this
Contract other than those in the Separate Account.
HOME OFFICE -- the Home Office of MetLife Insurance Company of Connecticut or
MetLife Life and Annuity Company of Connecticut or any other office that we may
designate for the purpose of administering this Contract.
MATURITY DATE -- the date on which the Annuity Payments are to begin.
PAYMENT OPTION -- an Annuity or Income option elected under your Contract.
PURCHASE PAYMENT -- any premium paid by you to initiate or supplement this
Contract.
PURCHASE PAYMENT CREDIT -- an amount credited to your Contract Value that
equals a percentage of each Purchase Payment made.
QUALIFIED CONTRACT -- a contract used in a retirement plan or program that is
intended to qualify under Sections 401, 403, 408, or 414(d) of the Code.
SEPARATE ACCOUNT -- MetLife of CT Separate Account Five for Variable Annuities
and MetLife of CT Separate Account Six for Variable Annuities, each a
segregated account registered with the Securities and Exchange Commission
("SEC"), the assets of which are invested solely in the Underlying Funds. The
assets of the Separate Account are held exclusively for the benefit of Contract
Owners.
3
SUBACCOUNT -- that portion of the assets of a Separate Account that is
allocated to a particular Underlying Fund.
UNDERLYING FUND -- a portfolio of an open-end management investment company
that is registered with the SEC in which the Subaccounts invest.
VALUATION DATE -- a date on which a Subaccount is valued.
VALUATION PERIOD -- the period between successive valuations.
VARIABLE FUNDING OPTION -- an open-end diversified management investment
company that serves as an investment option under the Separate Account.
WE, US, OUR -- MetLife Insurance Company of Connecticut or MetLife Life and
Annuity Company of Connecticut.
WRITTEN REQUEST -- written information sent to us in a form and content
satisfactory to us and received at our Home Office.
YOU, YOUR -- the Contract Owner.
4
SUMMARY:
METLIFE 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 MetLife
Insurance Company of Connecticut or MetLife Life and Annuity Company of
Connecticut, ("the Company," "we" or "us"). MetLife Life and Annuity Company of
Connecticut does not solicit or issue insurance products in the state of New
York. Refer to your Contract for the name of your issuing Company. Each company
sponsors its own segregated account ("Separate Account"). MetLife Insurance
Company of Connecticut sponsors MetLife of CT Separate Account Five for
Variable Annuities ("Separate Account Five"); MetLife Life and Annuity Company
of Connecticut sponsors MetLife of CT 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. The Contract may not currently be
available for sale in all states. Contracts issued in your state may provide
different features and benefits from and impose different costs (such as waiver
of the withdrawal charge on all Annuity Payments) than those described in this
prospectus.
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 fluctuate with the investment performance of the Underlying
Funds and are not guaranteed. You can also lose money in the Variable Funding
Options.
The Contract, like all deferred variable annuity contracts, has two phases: the
accumulation phase and the payout phase (annuity period). During the
accumulation phase generally, 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. 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 in the form of a variable annuity, a fixed annuity,
or a combination of both. If you elect variable income payments, the dollar
amount of your payments may increase or decrease. Once you choose one of the
annuity options and begin to receive payments, it cannot be changed.
WHO CAN PURCHASE THIS CONTRACT? The Contract is not available for purchase if
the proposed owner or Annuitant Is age 81 or older. The Contract is not
available to new purchasers.
CAN I EXCHANGE MY CURRENT ANNUITY CONTRACT FOR THIS CONTRACT? The Code
generally permits you to exchange one annuity contract for another in a
"tax-free exchange." Therefore, you can transfer the proceeds from another
annuity contract to make Purchase Payments under this Contract. Before making
an exchange to acquire this Contract, you should carefully compare this
Contract to your current contract. You may have to pay a surrender charge under
your current contract to exchange it for this Contract, and this Contract has
its own surrender charges that would apply to you. The other fees and charges
under this Contract may be higher or lower and the benefits may be different
than those of your current contract. In addition, you may have to pay federal
income or penalty taxes on the exchange if it does not qualify for tax-free
treatment. You should not exchange another contract for this Contract unless
you determine, after evaluating all the facts, that the exchange is in your
best interests. Remember that the person selling you the Contract generally
will earn a commission on the sale.
WHO IS THE CONTRACT ISSUED TO? If you purchase an individual Contract, you are
the Contract Owner. If a group Contract is purchased, we issue certificates to
the individual participants. Where we refer
5
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 supersede 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 different right
to return period, or the return of Purchase Payments, the Company will comply.
You bear the investment risk on the Purchase Payment allocated to a Variable
Funding Option during the right to return period; therefore, the Contract Value
we return may be greater or less than your Purchase Payment.
If you purchased your Contract as an Individual Retirement Annuity, and you
return it within the first seven days after delivery, or longer if your state
permits, we will refund your full Purchase Payment. During the remainder of the
right to return period, we will refund your Contract Value (including charges
we assessed). We will determine your Contract Value at the close of business on
the day we receive a Written Request for a refund.
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 shares, 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 among 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 charge 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 any associated
Purchase Payment Credits withdrawn. The maximum percentage is 5%, decreasing to
0% in years six and later.
Upon annuitization, 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. If you select the Liquidity Benefit, there is a charge of 5% of
the amounts withdrawn.
6
If you are a participant in the CHART Asset Allocation Program, the maximum
charge is 0.75% deducted from amounts of the Variable Funding Options.
HOW WILL MY PURCHASE PAYMENTS AND WITHDRAWALS BE TAXED? Generally, the payments
you make to a Qualified Contract during the accumulation phase are made with
before-tax dollars. Generally, you will be taxed on your Purchase Payments,
Purchase Payment Credits and on any earnings when you make a withdrawal or
begin receiving Annuity Payments. Payments to the Contract are made with
after-tax dollars, and any credits and earnings will generally accumulate
tax-deferred. You will be taxed on these earnings when they are withdrawn from
the Contract. If you are younger than 59 1/2 when you take money out, you may
be charged a 10% federal penalty tax on the amount withdrawn.
For owners of Qualified Contracts, if you reach a certain age, you may be
required by federal tax laws to begin receiving payments from your annuity or
risk paying a penalty tax. In those cases, we can calculate and pay you the
minimum required distribution amounts (see "Managed Distribution Program").
HOW MAY I ACCESS MY MONEY? You can take withdrawals any time during the
accumulation phase. Withdrawal charges may apply, and 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 or the election of beneficiary contract
continuance. Please refer to the Death Benefit section in the prospectus for
more details.
WHERE MAY I FIND OUT MORE ABOUT ACCUMULATION UNIT VALUES? The Condensed
Financial Information in Appendix A 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. Withdrawals in excess of the free withdrawal allowance may be
subject to a withdrawal charge.
. 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 SERVICES. Effective February 1, 2006, the CHART Asset
Allocation Program is closed. If you enrolled in the program prior to
February 1, 2006, you may continue to make additional Purchase Payments
into the program. If you cancel your enrollment in the program, you may
not re-enroll. Participants in the program enter into a separate
advisory agreement with MetLife Investment Fund Services LLC ("MIFS")
(formerly, CitiStreet Financial Services LLC), an affiliate of the
Company for the purpose of receiving asset allocation advice under
MIFS's CHART program (the "program"). Under the
7
program, participants allocate Contract Value according to asset
allocation models developed by MIFS in consultation with
CRA/RogersCasey, Inc., a well-known investment consulting firm. The
program is not a part of the Contract issued by the Company, and is
closed to new participants. The program is fully described in a separate
disclosure statement prepared by MIFS.
. BENEFICIARY CONTRACT CONTINUANCE (NOT PERMITTED FOR NON-NATURAL
BENEFICIARIES). If you die before the Maturity Date, and if the value of
any beneficiary's portion of the death benefit is between $20,000 and
$1,000,000 as of the date of your death, that beneficiary(s) may elect
to continue his/her portion of the Contract.
8
FEE TABLE
- --------------------------------------------------------------------------------
The following tables describe the fees and expenses that you will pay when
buying, owning, and surrendering the Contract. The first table describes the
fees and expenses that you will pay at the time that you buy the Contract,
surrender the Contract, or transfer Contract Value between Variable Funding
Options. Expenses shown do not include premium taxes, which may be applicable.
CONTRACT OWNER TRANSACTION EXPENSES
WITHDRAWAL CHARGE..................................................... 5%/(1)/
(AS A PERCENTAGE OF THE PURCHASE PAYMENTS AND ANY APPLICABLE PURCHASE
PAYMENT CREDITS WITHDRAWN)
TRANSFER CHARGE....................................................... $10/(2)/
(ASSESSED ON TRANSFERS THAT EXCEED 12 PER YEAR)
LIQUIDITY BENEFIT CHARGE.............................................. 5%
(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").
- --------
(1)The withdrawal charge declines to zero after the Purchase Payment has been
in the Contract for 5 years. The charge is as follows:
YEARS SINCE PURCHASE
PAYMENT MADE WITHDRAWAL CHARGE
- -------------------------------------- -----------------
GREATER THAN OR EQUAL TO BUT LESS THAN
- ------------------------ -------------
0 years 1 years 5%
1 years 2 years 4%
2 years 3 years 3%
3 years 4 years 2%
4 years 5 years 1%
5 years+ 0%
(2)We do not currently assess the transfer charge.
The next table describes the fees and expenses that you will pay periodically
during the time that you own the Contract, not including Underlying Fund fees
and expenses.
ANNUAL SEPARATE ACCOUNT CHARGES
(AS A PERCENTAGE OF THE AVERAGE DAILY NET ASSETS OF THE SEPARATE
ACCOUNT )(3)
We will assess a minimum mortality and expense risk charge ("M&E") of 0.80% for
the standard death benefit and .1.25% for the optional Death Benefit. Below is
a summary of all maximum charges that may apply, depending on the death benefit
you select and the optional features you select:
STANDARD DEATH BENEFIT: OPTIONAL DEATH BENEFIT:
----------------------- -----------------------
Mortality and Expense Risk Charge........ 0.80% 1.25%
Administrative Expense Charge............ None None
---- ----
Total Annual Separate Account Charges. 0.80% 1.25%
9
During the annuity period, if you have elected the Variable Annuitization Floor
Benefit, a total annual separate account charge of up to 3.80% or 4.25% may
apply. See "Variable Annuitization Floor Benefit".
(3) We are waiving the following amounts of the M&E charge on these
Subaccounts: 0.15% for the Subaccount investing in the Western Asset Management
U.S. Government Portfolio of the Metropolitan Series Fund, Inc. and an amount
equal to the underlying fund expenses that are in excess of 0.90% for the
Subaccount investing in the Harris Oakmark International Portfolio of the Met
Investors Series Trust.
CHART PROGRAM
Effective February 1, 2006, the CHART Asset Allocation Program is closed to new
participants. Plan participants who enrolled in the program prior to
February 1, 2006, may continue to make additional Purchase Payments into the
program. Plan participants who cancel enrollment in the program, may not
re-enroll.
MAXIMUM ANNUAL FEE FOR CHART PROGRAM.................................. 0.75%
The following table describes the annual investment advisory fee for clients
who enter into an investment advisory agreement to participate in MIFS's CHART
asset allocation program. The annual fee is applied to the participant's
current Contract Value. Fees payable for participating in the program are
deducted on a quarterly basis from the Contract as a partial surrender.
MAXIMUM
CONTRACT VALUE ANNUAL FEE FOR
EQUAL OR GREATER THAN BUT LESS THAN CHART PROGRAM
- --------------------- ------------- --------------
$0 $25,000 0.75
$25,000 $50,000 0.75
$50,000 $75,000 0.50
$75,000 $100,000 0.35%
$100,000 $250,000 0.25%
$250,000 $500,000 0.15%
$500,00+ 0.10%
UNDERLYING FUND EXPENSES AS OF DECEMBER 31, 2005 (UNLESS OTHERWISE INDICATED):
The first table below shows the range (minimum and maximum) of the total annual
operating expenses charged by all of the Underlying Funds, before any voluntary
or contractual fee waivers and/or expense reimbursements. The second table
shows each Underlying Fund's management fee, distribution and/or service fees
(12b-1) if applicable, and other expenses. The Underlying Funds provided this
information and we have not independently verified it. More detail concerning
each Underlying Fund's fees and expenses is contained in the prospectus for
each Underlying Fund. Current prospectuses for the Underlying Funds can be
obtained by calling 1- 800-233-3591.
MINIMUM AND MAXIMUM TOTAL ANNUAL UNDERLYING FUND OPERATING EXPENSES
MINIMUM MAXIMUM
------- -------
TOTAL ANNUAL FUND OPERATING EXPENSES
(expenses that are deducted from Underlying Fund assets, including management
fees, distribution and/or service fees (12b-1) fees, and other expenses)..... 0.42% 4.47%
10
UNDERLYING FUND FEES AND EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
DISTRIBUTION CONTRACTUAL FEE NET TOTAL
AND/OR TOTAL ANNUAL WAIVER ANNUAL
MANAGEMENT SERVICE(12B-1) OTHER OPERATING AND/OR EXPENSE OPERATING
UNDERLYING FUND: FEE FEES EXPENSES EXPENSES REIMBURSEMENT EXPENSES
- ---------------- ---------- -------------- -------- ------------ --------------- ----------
AIM VARIABLE INSURANCE FUNDS
AIM V.I. Core Equity Fund -- Series I+.... 0.60% -- 0.27% 0.87% -- 0.87%/(1)/
AMERICAN FUNDS INSURANCE SERIES
American Funds Global Growth Fund --
Class 2*................................. 0.58% 0.25% 0.04% 0.87% -- 0.87%
American Funds Growth Fund -- Class
2*....................................... 0.33% 0.25% 0.02% 0.60% -- 0.60%
American Funds Growth-Income Fund --
Class 2*................................. 0.28% 0.25% 0.01% 0.54% -- 0.54%
CREDIT SUISSE TRUST
Credit Suisse Trust Emerging Market
Portfolio+............................... 1.25% -- 0.44% 1.69% -- 1.69%
DELAWARE VIP TRUST
Delaware VIP Small Cap Value Series --
Standard Class........................... 0.73% -- 0.12% 0.85% -- 0.85%
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus Variable Investment Fund
Appreciation Portfolio -- Initial Shares. 0.75% -- 0.05% 0.80% -- 0.80%
Dreyfus Variable Investment Fund
Developing Leaders Portfolio -- Initial
Shares................................... 0.75% -- 0.06% 0.81% -- 0.81%
FRANKLIN TEMPLETON VARIABLE INSURANCE
PRODUCTS TRUST
Templeton Developing Markets Securities
Fund -- Class 2*......................... 1.24% 0.25% 0.29% 1.78% -- 1.78%
Templeton Foreign Securities Fund --
Class 2*................................. 0.65% 0.25% 0.17% 1.07% 0.05% 1.02%/(2)/
JANUS ASPEN SERIES
Mid Cap Growth Portfolio -- Service
Shares*.................................. 0.64% 0.25% 0.03% 0.92% -- 0.92%
Worldwide Growth Portfolio -- Service
Shares*+................................. 0.60% 0.25% 0.01% 0.86% -- 0.86%/(3)/
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Small Cap Portfolio*.... 0.75% 0.25% 0.22% 1.22% -- 1.22%
LEGG MASON PARTNERS INVESTMENT SERIES
Legg Mason Partners Variable Dividend
Strategy Portfolio+++.................... 0.65% -- 0.21% 0.86% -- 0.86%
Legg Mason Partners Variable Premier
Selections All Cap Growth Portfolio+++... 0.75% -- 0.19% 0.94% -- 0.94%
LEGG MASON PARTNERS VARIABLE PORTFOLIOS I,
INC.
Legg Mason Partners Variable All Cap
Portfolio -- Class I..................... 0.75% -- 0.07% 0.82% -- 0.82%
Legg Mason Partners Variable Investors
Portfolio................................ 0.65% -- 0.06% 0.71% -- 0.71%
11
DISTRIBUTION CONTRACTUAL FEE NET TOTAL
AND/OR TOTAL ANNUAL WAIVER ANNUAL
MANAGEMENT SERVICE(12B-1) OTHER OPERATING AND/OR EXPENSE OPERATING
UNDERLYING FUND: FEE FEES EXPENSES EXPENSES REIMBURSEMENT EXPENSES
- ---------------- ---------- -------------- -------- ------------ --------------- --------------
Legg Mason Partners Variable Small Cap
Growth Portfolio+......................... 0.75% -- 0.22% 0.97% -- 0.97%
Legg Mason Partners Variable Total Return
Portfolio -- Class I+..................... 0.75% -- 0.18% 0.93% -- 0.93%/(4)/
LEGG MASON PARTNERS VARIABLE PORTFOLIOS II
Legg Mason Partners Variable
Appreciation Portfolio.................... 0.70% -- 0.02% 0.72% -- 0.72%
Legg Mason Partners Variable Equity Index
Portfolio -- Class II*.................... 0.31% 0.25% 0.03% 0.59% -- 0.59%
Legg Mason Partners Variable
Fundamental Value Portfolio+.............. 0.75% -- 0.03% 0.78% -- 0.78%
LEGG MASON PARTNERS VARIABLE PORTFOLIOS III,
INC.
Legg Mason Partners Variable Adjustable
Rate Income Portfolio*++.................. 0.55% 0.25% 0.28% 1.08% -- 1.08%/(5)/
Legg Mason Partners Variable Aggressive
Growth Portfolio++........................ 0.75% -- 0.02% 0.77% -- 0.77%/(5)/
Legg Mason Partners Variable High
Income Portfolio++........................ 0.60% -- 0.06% 0.66% -- 0.66%
Legg Mason Partners Variable International
All Cap Growth Portfolio+++............... 0.85% -- 0.15% 1.00% -- 1.00%/(5)/
Legg Mason Partners Variable Large Cap
Growth Portfolio++........................ 0.75% -- 0.04% 0.79% -- 0.79%/(5)/
Legg Mason Partners Variable Social
Awareness Stock Portfolio++............... 0.71% -- 0.04% 0.75% -- 0.75%/(6)/
LEGG MASON PARTNERS VARIABLE PORTFOLIOS V
Legg Mason Partners Variable Small Cap
Growth Opportunities Portfolio............ 0.75% -- 0.30% 1.05% -- 1.05%
MET INVESTORS SERIES TRUST
Batterymarch Mid-Cap Stock Portfolio --
Class A................................... 0.70% -- 0.10% 0.80% -- 0.80%/(17)/
Dreman Small-Cap Value Portfolio --
Class A................................... 0.83% -- 3.64% 4.47% 3.37% 1.10%/(7)(17)/
Harris Oakmark International Portfolio --
Class A................................... 0.82% -- 0.13% 0.95% -- 0.95%
Janus Capital Appreciation Portfolio --
Class A................................... 0.65% -- 0.09% 0.74% -- 0.74%/(17)/
Legg Mason Partners Managed Assets
Portfolio................................. 0.50% -- 0.09% 0.59% -- 0.59%/(17)/
Lord Abbett Bond Debenture Portfolio --
Class A................................... 0.51% -- 0.05% 0.56% -- 0.56%
Lord Abbett Growth and Income Portfolio
-- Class B*............................... 0.50% 0.25% 0.04% 0.79% -- 0.79%/(16)/
12
DISTRIBUTION CONTRACTUAL FEE
AND/OR TOTAL ANNUAL WAIVER AND/OR NET TOTAL ANNUAL
MANAGEMENT SERVICE(12B-1) OTHER OPERATING EXPENSE OPERATING
UNDERLYING FUND: FEE FEES EXPENSES EXPENSES REIMBURSEMENT EXPENSES
- ---------------- ---------- -------------- -------- ------------ --------------- ----------------
Lord Abbett Mid-Cap Value Portfolio -
Class B*................................... 0.68% 0.25% 0.08% 1.01% -- 1.01%
Mercury Large-Cap Core Portfolio -- Class
A.......................................... 0.78% -- 0.12% 0.90% -- 0.90%/(17)/
Met/AIM Capital Appreciation Portfolio --
Class A.................................... 0.76% -- 0.05% 0.81% -- 0.81%/(17)/
Met/AIM Small Cap Growth Portfolio --
Class A.................................... 0.90% -- 0.10% 1.00% -- 1.00%/(7)(17)/
MFS(R) Value Portfolio -- Class A........... 0.73% -- 0.24% 0.97% -- 0.97%/(17)/
Neuberger Berman Real Estate Portfolio --
Class A.................................... 0.67% -- 0.03% 0.70% -- 0.70%
Pioneer Fund Portfolio -- Class A........... 0.75% -- 0.28% 1.03% 0.03% 1.00%/(7)(17)/
Pioneer Mid-Cap Value Portfolio -- Class
A.......................................... 0.75% -- 2.84% 3.59% 2.59% 1.00%/(7)(17)/
Pioneer Strategic Income Portfolio -- Class
A.......................................... 0.73% -- 0.09% 0.82% -- 0.82%/(17)/
METLIFE INVESTMENT FUNDS
MetLife Investment Diversified Bond Fund-
Class I.................................... 0.41% -- 0.11% 0.52% -- 0.52%/(8)/
MetLife Investment International Stock
Fund -- Class I............................ 0.73% -- 0.19% 0.92% -- 0.92%/(8)/
MetLife Investment Large Company Stock
Fund -- Class I............................ 0.53% -- 0.11% 0.64% -- 0.64%
MetLife Investment Small Company Stock
Fund -- Class I............................ 0.64% -- 0.15% 0.79% -- 0.79%/(8)/
METROPOLITAN SERIES FUND, INC.
BlackRock Aggressive Growth Portfolio --
Class D*................................... 0.73% 0.10% 0.06% 0.89% -- 0.89%
BlackRock Bond Income Portfolio -- Class
A.......................................... 0.40% -- 0.07% 0.47% -- 0.47%/(9)/
BlackRock Money Market Portfolio --
Class A.................................... 0.35% -- 0.07% 0.42% 0.01% 0.41%/(10)/
FI Large Cap Portfolio -- Class A........... 0.80% -- 0.06% 0.86% -- 0.86%/(11)/
FI Value Leaders Portfolio -- Class D*...... 0.66% 0.10% 0.07% 0.83% -- 0.83%
MFS(R) Total Return Portfolio -- Class F*... 0.57% 0.20% 0.16% 0.93% -- 0.93%/(14)/
Oppenheimer Global Equity Portfolio --
Class B*................................... 0.60% 0.25% 0.33% 1.18% -- 1.18%
Western Asset Management High Yield
Bond Portfolio -- Class A.................. 0.48% -- 0.12% 0.60% -- 0.60%/(11)/
Western Asset Management U.S.
Government Portfolio -- Class A............ 0.54% -- 0.07% 0.61% -- 0.61%
PIMCO VARIABLE INSURANCE TRUST
Real Return Portfolio -- Administrative
Class...................................... 0.25% -- 0.41% 0.66% -- 0.66%/(12)/
Total Return Portfolio -- Administrative
Class...................................... 0.25% -- 0.40% 0.65% -- 0.65%
13
DISTRIBUTION CONTRACTUAL FEE NET TOTAL
AND/OR TOTAL ANNUAL WAIVER ANNUAL
MANAGEMENT SERVICE(12B-1) OTHER OPERATING AND/OR EXPENSE OPERATING
UNDERLYING FUND: FEE FEES EXPENSES EXPENSES REIMBURSEMENT EXPENSES
- ---------------- ---------- -------------- -------- ------------ --------------- -----------
PUTNAM VARIABLE TRUST
Putnam VT Discovery Growth Fund --
Class IB*+.................................. 0.70% 0.25% 0.47% 1.42% -- 1.42%
Putnam VT International Equity Fund --
Class IB*+.................................. 0.75% 0.25% 0.18% 1.18% -- 1.18%
Putnam VT Small Cap Value Fund -- Class
IB*......................................... 0.76% 0.25% 0.08% 1.09% -- 1.09%
VAN KAMPEN LIFE INVESTMENT TRUST
Van Kampen Life Investment Trust
Comstock Portfolio Class II*................ 0.56% 0.25% 0.03% 0.84% -- 0.84%
Van Kampen Life Investment Trust
Emerging Growth Portfolio Class II*+........ 0.70% 0.25% 0.07% 1.02% -- 1.02%
Van Kampen Life Investment Trust
Enterprise Portfolio Class II*+............. 0.50% 0.25% 0.18% 0.93% -- 0.93%
VARIABLE INSURANCE PRODUCTS FUND
VIP Contrafund(R) Portfolio -- Service Class
2*.......................................... 0.57% 0.25% 0.09% 0.91% -- 0.91%
VIP Dynamic Capital Appreciation
Portfolio -- Service Class 2*+.............. 0.57% 0.25% 0.36% 1.18% -- 1.18%
VIP Mid Cap Portfolio -- Service Class
2*.......................................... 0.57% 0.25% 0.12% 0.94% -- 0.94%
WELLS FARGO VARIABLE TRUST
Wells Fargo Advantage VT Small/MidCap
Value Fund*+................................ 0.75% 0.25% 0.40% 1.40% 0.26% 1.14%/(13)/
NET TOTAL
ANNUAL
OPERATING
EXPENSES
INCLUDING
DISTRIBUTION CONTRACTUAL FEE NET TOTAL NET
AND/OR TOTAL ANNUAL WAIVER ANNUAL EXPENSES OF
MANAGEMENT SERVICE (12B-1) OTHER OPERATING AND/OR EXPENSE OPERATING UNDERLYING
UNDERLYING FUND: FEE FEES EXPENSES EXPENSES REIMBURSEMENT EXPENSES** PORTFOLIOS
- ---------------- ---------- --------------- -------- ------------ --------------- ---------- -------------
METROPOLITAN SERIES
FUND, INC.
Asset Allocation
Portfolios
MetLife Conservative
Allocation Portfolio
-- Class B *.......... 0.10% 0.25% 0.95% 1.30% 0.95% 0.35% 0.98%/(a)(b)/
MetLife Conservative to
Moderate Allocation
Portfolio -- Class
B*.................... 0.10% 0.25% 0.31% 0.66% 0.31% 0.35% 1.00%/(a)(b)/
MetLife Moderate
Allocation Portfolio
-- Class B*........... 0.10% 0.25% 0.19% 0.54% 0.19% 0.35% 1.04%/(a)(b)/
MetLife Moderate to
Aggressive Allocation
Portfolio -- Class
B*.................... 0.10% 0.25% 0.24% 0.59% 0.24% 0.35% 1.06%/(a)(b)/
MetLife Aggressive
Allocation Portfolio
-- Class B*........... 0.10% 0.25% 1.66% 2.01% 1.66% 0.35% 1.07%/(a)(b)/
(a)Our affiliate, MetLife Advisers, LLC (the "adviser"), has contractually
agreed, for the period May 1, 2006 through April 30, 2007, to waive fees or
pay all expenses (other than brokerage costs, taxes, interest and any
extraordinary expenses) so as to limit Net Operating Expenses (other than
brokerage costs, taxes, interest and any extraordinary expenses) to 0.35%.
This subsidy is subject to the Portfolio's obligation to repay the adviser
in future years, if any, when the Portfolio's expenses for any Class fall
below the expense limit for that Class which was in effect at the time of
the subsidy. Such deferred expenses may be charged to the Portfolio in a
subsequent year to the extent that the charge does not cause the expenses
in such subsequent year to exceed the expense limit that was in effect at
the time of the subsidy. The Portfolio is not obligated to repay such
expenses more than five years after the end of the fiscal year in which the
expenses were incurred.
14
(b)These portfolios are "fund of funds" portfolios that invest substantially
all of their assets in other portfolios of the Metropolitan Series Fund,
Inc. or the Met Investors Series Trust. Because these portfolios invest in
other underlying portfolios, each of these portfolios also will bear its
pro rata portion of the operating expenses of the underlying portfolios in
which it invests, including the investment management fee. The total
expenses of the underlying portfolios (after any applicable fee waivers and
expense reimbursements) as of December 31, 2005 are: 0.63% for the MetLife
Conservative Allocation Portfolio; 0.65% for the MetLife Conservative to
Moderate Allocation Portfolio; 0.69% for the MetLife Moderate Allocation
Portfolio; 0.71% for the MetLife Moderate to Aggressive Allocation
Portfolio; and 0.72% for the MetLife Aggressive Allocation Portfolio. The
total annual operating expenses of the portfolios (before any applicable
fee waivers and expense reimbursements), including the total operating
expenses of the underlying portfolios (before any applicable fee waivers
and reimbursements) as of December 31, 2005 are: 1.93% for the MetLife
Conservative Allocation Portfolio, 1.31% for the MetLife Conservative to
Moderate Allocation Portfolio; 1.23% for the MetLife Moderate Allocation
Portfolio, 1.30% for the MetLife Moderate to Aggressive Allocation
Portfolio, and 2.73% for the MetLife Aggressive Allocation Portfolio.
Investors may be able to realize lower aggregate expenses by investing
directly in the underlying portfolios instead of the Portfolio. An investor
who chooses to invest directly in the underlying portfolios would not,
however, receive the asset allocation services provided by MetLife Advisers.
- --------
* The 12b-1 fees deducted from these classes cover certain distribution,
shareholder support and administrative services provided by intermediaries
(the insurance company, broker dealer or other service provider).
** Net Total Annual Operating Expenses do not reflect (1) voluntary waivers of
fees or expenses; (2) contractual waivers that are in effect for less than
one year from the date of this Prospectus; or (3) expense reductions
resulting from custodial fee credits or directed brokerage arrangements.
+ Closed to new investors.
++ Fees and expenses for this Portfolio are based on the Portfolio's fiscal
year ended October 31, 2005.
NOTES
(1)As a result of the Reorganization of another fund into the Fund, which will
occur on or about May 1, 2006, the Fund's Total Annual Operating Expenses
have been restated to reflect such reorganization. Effective upon the
closing of the Reorganization which will occur on or about May 1, 2006, the
advisor has contractually agreed to waive advisory fees and/or reimburse
expenses to the extent necessary to limit Total Annual Fund Operating
Expenses of Series I shares to 0.91% of average daily net assets excluding
(i) interest; (ii) taxes; (iii) dividend expense on short sales;
(iv) extraordinary items; (v) expenses related to a merger or
reorganizations as approved by the Fund's Board of Trustees; and
(vi) expenses that the Fund has incurred but did not actually pay because
of an expense offset arrangement. The expense limitation agreement is in
effect through April 30, 2007.
(2)The Fund's manager has agreed in advance to reduce its fees with respect to
assets invested by the Fund in a Franklin Templeton Money Market Fund (the
Sweep Money Fund). This reduction is required by the Fund's Board of
Trustees (Board) and an exemptive order by the Securities and Exchange
Commission (SEC).
(3)Effective February 1, 2006, the Portfolio's investment advisory fee rate
changed from a fixed rate to a rate that adjusts upward or downward based
upon the Portfolio's performance relative to its benchmark index. This
change will not impact the investment advisory fee shown until one year
after the effective date when the performance adjustment takes effect.
Details discussing the change are included in the Portfolio's Statement of
Additional Information.
(4)The Management Fee in the table has been restated to reflect a new fee
schedule that became effective on October 1, 2005.
(5)The Management Fee in the table has been restated to reflect a new fee
schedule that became effective on November 1, 2005.
(6)The Management Fee in the table has been restated to reflect a new fee
schedule that became effective on December 1, 2005.
(7)Met Investors Advisory and Met Investors Series Trust have entered into an
Expense Limitation Agreement under which Met Investors Advisory has agreed
to waive or limit its fees and to assume other expenses so that the total
annual expenses of the Portfolio (other than interest, taxes, brokerage
commissions, other expenditures which are capitalized in accordance with
generally accepted accounting principles and other extraordinary expenses)
will not exceed, at any time prior to April 30, 2007, the following
percentages: 1.10% for the Dreman Small-Cap Value Portfolio, 1.05% for the
Met/AIM Small Cap Growth Portfolio, 1.00% for the Pioneer Fund Portfolio
and 1.00% for the Pioneer Mid-Cap Value Portfolio. Under certain
circumstances, any fees waived or expenses reimbursed by the investment
manager may be repaid to the investment manager if, in the future, actual
expenses of this portfolio are less than these expense limits. Certain
amounts were recouped by the investment manager during 2005. The amounts
repaid are reflected in Other Expenses and equal 0.04% for the Met/AIM
Small Cap Growth Portfolio.
(8)Expense information in the table has been restated to reflect current fees.
(9)Our affiliate, MetLife Advisers, LLC and the Metropolitan Series Fund, Inc.
have entered into an expense agreement under which MetLife Advisers, LLC
will waive, through April 30, 2007, the management fees (other than
brokerage costs, interest, taxes or extraordinary expenses) payable by the
Portfolio, in the following amount: 0.025% on assets in excess of $1
billion and less than $2 billion.
(10)Our affiliate, MetLife Advisers, LLC and the Metropolitan Series Fund, Inc.
have entered into an expense agreement under which MetLife Advisers, LLC
will waive, through April 30, 2007, the management fees (other than
brokerage costs, interest, taxes or extraordinary expenses) payable by the
Portfolio, in the following amount: 0.005% on the first $500 million of
assets and .015% on the next $500 million of assets.
(11)The Portfolio's total annual expenses have been restated to reflect the
reorganization of another Portfolio into this Portfolio which occurred as
of the close of business on April 28, 2006. The expenses have also been
restated to reflect contractual arrangements in effect on May 1, 2006.
15
(12)Ratio of expenses to average net assets excluding interest expense is 0.65%.
(13)Other expenses may include expenses payable to affiliates of Wells Fargo &
Company. Other expenses for the VT Small/Mid Cap Value Fund (formerly the
Multi Cap Value Fund) are based on estimates for the current fiscal year.
The adviser has committed through April 30, 2007 to waive fees and/ or
reimburse expenses to the extent necessary to maintain the net operating
expense ratios shown.
(14)The Management Fee has been restated to reflect a new management fee
schedule that became effective on May 1, 2006.
(15)The Management Fee in the table has been restated to reflect a new
management fee schedule that became effective December 19, 2005.
(16)The Management Fee in the table has been restated to reflect a new
management fee schedule that became effective January 1, 2006.
(17)Fees and expenses for this portfolio are estimated for the year ending
December 31, 2006.
16
EXAMPLES
These examples are intended to help you compare the cost of investing in the
Contract with the cost of investing in other variable annuity Contracts. These
costs include Contract Owner transaction expenses, Contract fees, separate
account annual expenses, and Underlying Fund total annual operating expenses.
These examples do not represent past or future expenses. Your actual expenses
may be more or less than those shown.
These examples assume that you invest $10,000 in the Contract for the time
periods indicated and that your investment has a 5% return each year. The
examples reflect the annual Contract administrative charge, factoring in that
the charge is waived for contracts over a certain value. Additionally, the
examples are based on the minimum and maximum Underlying Fund total annual
operating expenses shown above, and do not reflect any Underlying Fund fee
waivers and/or expense reimbursements.
The examples assume you have elected the Optional Death Benefit and that you
have allocated all of your Contract Value to either the Underlying Fund with
the maximum total annual operating expenses or the Underlying Fund with the
minimum total annual operating expenses. Your actual expenses will be less than
those shown if you do not elect the Optional Death Benefit.
EXAMPLE 1.
MAXIMUM CHARGES (ASSUMING YOU SELECT 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
- -------------- ------ ------- ------- -------- ------ ------- ------- --------
Underlying Fund with Maximum Total Annual Operating Expenses $1,085 $1,979 $2,953 $5,623 $659 $1,944 $3,188 $6,127
Underlying Fund with Minimum Total Annual Operating Expenses $ 677 $ 789 $1,024 $2,051 $254 $ 780 $1,333 $2,838
EXAMPLE 2 -- THIS EXAMPLE ASSUMES THAT YOU HAVE ELECTED THE MOST EXPENSIVE
DEATH BENEFIT OPTION AND THE CHART PROGRAM AT THE MAXIMUM FEE. UNDER THE CHART
PROGRAM, YOU CHOOSE TO ENTER INTO A SEPARATE INVESTMENT ADVISORY AGREEMENT WITH
MIFS FOR THE PURPOSE OF RECEIVING ASSET ALLOCATION ADVICE. THE EXAMPLE ASSUMES
THAT YOUR CONTRACT VALUE IS ALLOCATED TO THE MOST EXPENSIVE AND LEAST EXPENSIVE
UNDERLYING FUNDS; HOWEVER, UNDER THE PROGRAM, YOUR CONTRACT VALUE IS CURRENTLY
ALLOCATED AMONGST FOUR UNDERLYING FUNDS, EACH OF WHICH IS SUBSTANTIALLY LESS
EXPENSIVE THAN THE EXAMPLE REFLECTING THE MAXIMUM TOTAL OPERATING EXPENSES. THE
PROGRAM IS NOT PART OF THE CONTRACT ISSUED BY THE COMPANY.
IF CONTRACT IS SURRENDERED AT THE IF CONTRACT IS NOT SURRENDERED OR
END OF PERIOD SHOWN: ANNUITIZED AT END OF PERIOD SHOWN:
------------------------------- -------------------------------
FUNDING OPTION 1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
- -------------- ------ ------- ------- -------- ------ ------- ------- --------
Underlying Fund with Maximum Total Annual Operating Expenses $1,159 $2,184 $3,268 $6,127 $659 $1944 $3,188 $6,127
Underlying Fund with Minimum Total Annual Operating Expenses $ 754 $1,020 $1,413 $2,838 $254 $ 780 $1,333 $2,838
17
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
See Appendices A and B.
THE ANNUITY CONTRACT
- --------------------------------------------------------------------------------
MetLife Retirement Account Annuity is a Contract between the Contract Owner
("you") and the Company. This is the prospectus -- it is not the Contract. The
prospectus highlights many Contract provisions to focus your attention on the
Contract's essential features. Your rights and obligations under the Contract
will be determined by the language of the Contract itself. When you receive
your Contract, we suggest you read it promptly and carefully. There may be
differences in your Contract from the descriptions in this prospectus because
of the requirements of the state where we issued your Contract. We will include
any such differences in your Contract.
The Company offers several different annuities that your investment
professional may be authorized to offer to you. Each annuity offers different
features and benefits that may be appropriate for you. In particular, the
annuities differ based on variations in the standard and optional death benefit
protection provided for your beneficiaries, the availability of optional living
benefits, the ability to access your Contract Value if necessary and the
charges that you will be subject to if you make a withdrawal or surrender the
annuity. The separate account charges and other charges may be different
between each annuity we offer. Optional death benefits and living benefits are
subject to a separate charge for the additional protections they offer to you
and your beneficiaries. Furthermore, annuities that offer greater flexibility
to access your Contract Value generally are subject to higher separate account
charges than annuities that deduct charges if you make a withdrawal or
surrender.
We encourage you to evaluate the fees, expenses, benefits and features of this
annuity against those of other investment products, including other annuity
products offered by us and other insurance companies. Before purchasing this or
any other investment product you should consider whether the product you
purchase is consistent with your risk tolerance, investment objectives,
investment time horizon, financial and tax situation, liquidity needs and how
you intend to use the annuity.
You make Purchase Payments to us and we credit them to your Contract. We
promise to pay you an income, in the form of Annuity Payments, beginning on a
future date that you choose, the Maturity Date. The Purchase Payments
accumulate tax deferred in the funding options of your choice. We offer
multiple Variable Funding Options. We may also offer a Fixed Account option.
Where permitted by law, we reserve the right to restrict Purchase Payments into
the Fixed Account whenever the credited interest rate on the Fixed Account is
equal to the minimum guaranteed interest rate specified under the Contract. The
Contract Owner assumes the risk of gain or loss according to the performance of
the Variable Funding Options. The Contract Value is the amount of Purchase
Payments and any associated 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.
18
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.
The Contract is not available for purchase if the proposed owner or Annuitant
is age 81 or older. The Contract is not open to new purchasers.
Purchase of this Contract through a tax-qualified retirement plan or IRA does
not provide any additional tax deferral benefits beyond those provided by the
plan or the IRA. Accordingly, if you are purchasing this Contract through a
plan or IRA, you should consider purchasing this Contract for its Death
Benefit, Annuity Option Benefits, and other non-tax-related benefits. You
should consult with your financial adviser to determine if this Contract is
appropriate for you.
CONTRACT OWNER INQUIRIES
Any questions you have about your Contract should be directed to our Home
Office at 1-800-233-3591.
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. No additional payments are
allowed if this Contract is purchased with a beneficiary-directed transfer of
death benefit proceeds. 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
within two business days after we receive it at our Home Office with a properly
completed application or order request. If your request or other information
accompanying the initial Purchase Payment is incomplete when received, we will
hold the Purchase Payment for up to five business days. If we cannot obtain the
necessary information within five business days, we will return the Purchase
Payment in full, unless you specifically consent for us to keep it until you
provide the necessary information.
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.
Where permitted by state law, we reserve the right to restrict Purchase
Payments into the Fixed Account whenever the credited interest rate on the
Fixed Account is equal to the minimum guaranteed interest rate specified under
the Contract.
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 Variable Funding Options to which your Purchase Payment was applied.
Purchase Payments allocated to the Fixed Account are not eligible for Purchase
Payment Credits.
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 more than offset the Purchase Payment Credits and related
earnings. You should consider this possibility before purchasing the Optional
Death Benefit.
19
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, and Accumulation Unit is used to
calculate the value of a Contract. Each Variable Funding Option has a
corresponding Accumulation Unit value. The Accumulation Units are valued each
business day and their values may increase or decrease from day to day. The
daily change in value of an Accumulation Unit each day is based on the
investment performance of the corresponding Underlying Fund, and the deduction
of separate account charges shown in the Fee Table in this prospectus. The
number of Accumulation Units we will credit to your Contract once we receive a
Purchase Payment is determined by dividing the amount directed to each Variable
Funding Option by the value of its Accumulation Unit. Normally, we calculate
the value of an Accumulation Unit for each Variable Funding Option as of the
close of regular trading (generally 4:00 p.m. Eastern time) each day the New
York Stock Exchange is open. 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. From time to time we may make new Variable Funding Options available.
These Variable Funding Options are Subaccounts of the Separate Account. The
Subaccounts invest in the Underlying Funds. You are not investing directly in
the Underlying Fund. Each Underlying Fund is a portfolio of an open-end
management investment company that is registered with the SEC under the
Investment Company Act of 1940. These Underlying Funds are not publicly traded
and are only offered through variable annuity contracts, variable life
insurance products, and maybe in some instances, certain retirement plans. They
are not the same retail mutual funds as those offered outside of a variable
annuity or variable life insurance product, although the investment practices
and fund names may be similar and the portfolio managers may be identical.
Accordingly, the performance of the retail mutual fund is likely to be
different from that of the Underlying Fund, and Contract Owners should not
compare the two.
We select the Underlying Funds offered through this Contract based on several
criteria, including asset class coverage, the strength of the adviser's or
subadviser's reputation and tenure, brand recognition, performance, and the
capability and qualification of each investment firm. Another factor we
consider during the selection process is whether the Underlying Fund's adviser
or subadviser is one of our affiliates or whether the Underlying Fund, its
adviser, its subadviser(s), or an affiliate will compensate us or our
affiliates for providing certain administrative, marketing, and support
services that would otherwise be provided by the Underlying Fund, the
Underlying Fund's investment adviser, or its distributor. In some cases, we
have included Underlying Funds based on recommendations made by broker-dealer
firms. When the Company develops a variable annuity product in cooperation with
a fund family or distributor (e.g. a "private label" product) the Company will
generally include Underlying Funds based on recommendations made by the fund
family or distributor, whose selection criteria may differ from the Company's
selection criteria.
In certain circumstances, the Company's ability to remove or replace an
Underlying Fund may be limited by the terms of a five-year agreement between
MetLife, Inc. (MetLife) and Legg Mason, Inc. (Legg Mason) relating to the use
of certain Underlying Funds advised by Legg Mason affiliates. The agreement
sets forth the conditions under which the Company can remove an Underlying
Fund, which, in some cases, may differ from the Company's own selection
criteria. In addition, during the term of the agreement, subject to the
Company's fiduciary and other legal duties, the Company is generally
20
obligated in the first instance to consider Underlying Funds advised by Legg
Mason affiliates in seeking to make a substitution for an Underlying Fund
advised by a Legg Mason affiliate. The agreement was originally entered into on
July 1, 2005 by MetLife and certain affiliates of Citigroup Inc. (Citigroup) as
part of MetLife's acquisition of The Travelers Insurance Company and The
Travelers Life and Annuity Company from Citigroup. Legg Mason replaced the
Citigroup affiliates as a party to the agreement when Citigroup sold its asset
management business to Legg Mason.
We review the investment Underlying Funds periodically and may remove an
Underlying Fund or limit its availability to new purchase payment Purchase
Payments and/or transfers of Contract Value if we determine that the Underlying
Fund no longer meets one or more of the selection criteria, and/or if the
Underlying Fund has not attracted significant allocations from owners. We do
not provide investment advice and do not recommend or endorse any particular
Underlying Fund.
If investment in the Underlying Funds or a particular Underlying Fund is no
longer possible, in our judgment becomes inappropriate for purposes of the
Contract, or for any other reason in our sole discretion, we may substitute
another Underlying Fund or Underlying Funds without your consent. The
substituted Underlying Fund may have different fees and expenses. Substitution
may be made with respect to existing investments or the investment of future
Purchase Payments, or both. However, we will not make such substitution without
any necessary approval of the Securities and Exchange Commission and applicable
state insurance departments. Furthermore, we may close Underlying Funds to
allocations of Purchase Payments or Contract Value, or both, at any time in our
sole discretion
ADMINISTRATIVE, MARKETING AND SUPPORT SERVICE FEES. As described above, an
investment adviser (other than our affiliates MetLife Advisers, LLC, and Met
Investors Advisory, LLC) or subadviser of an Underlying Fund, or its
affiliates, may compensate the Company and/or certain of our affiliates or
administrative or other services relating to the Underlying Funds. The amount
of the compensation is not deducted from Fund assets and does not decrease the
Fund's investment return. The amount of the compensation is based on a
percentage of assets of the Underlying Funds attributable to the Contracts and
certain other variable insurance products that the Company and its affiliates
issue. These percentages differ and some advisers or subadvisers (or other
affiliates) may pay the Company more than others. These percentages currently
range up to 0.50%. Additionally, an investment adviser or subadviser of an
Underlying Fund or its affiliates may provide the Company with wholesaling
services that assist in the distribution of the Contracts and may pay the
Company and/or certain of our affiliates amounts to participate in sales
meetings. These amounts may be significant and may provide the adviser or
subadviser (or their affiliate) with increased access to persons involved in
the distribution of the Contracts.
The Company and/or certain of its affiliated insurance companies are joint
members of its affiliated investment advisers MetLife Advisers, LLC and Met
Investors Advisory, LLC, which are formed as "limited liability companies". The
Company's membership interests entitle us to profit distributions if the
adviser makes a profit with respect to the advisory fees it receives from the
Underlying Fund. The Company may benefit accordingly from assets allocated to
the Underlying Funds to the extent they result in profits to the advisers. (See
"Fee Table -- Underlying Fund Fees and Expenses" for information on the
management fees paid by the Underlying Funds and the Statement of Additional
Information for the Underlying Funds for information on the management fees
paid by the advisers to the subadvisers.)
Certain Underlying Funds have adopted a Distribution Plan under Rule 12b-1 of
the Investment Company Act of 1940. The Distribution Plan is described in more
detail in the Underlying Fund's prospectus. (See "Fee Table -- Underlying Fund
Fees and Expenses" and "Other Information -- Distribution of the Contracts.")
The payments are deducted from assets of the Underlying Funds and are paid to
our distributor, MLI Distribution LLC. These payments decrease the Fund's
investment return.
The agreement described above between MetLife and Legg Mason also obligates
Legg Mason affiliates to continue on their current terms certain arrangements
under which we receive payments in connection with our provision of
administrative, marketing or other support services to the funds advised or
subadvised by Legg Mason affiliates.
21
We make certain payments to American Funds Distributors, Inc., principal
underwriter for the American Funds Insurance Series. (See "Other Information --
Distribution of the Contracts.")
Each Underlying Fund has different investment objectives and risks. The
Underlying Fund prospectuses contain more detailed information on each
Underlying Fund's investment strategy, investment advisers and its fees. You
may obtain an Underlying fund prospectus by calling 1-800 - 233-3591 or through
your registered representative. We do not guarantee the investment results of
the Underlying Funds.
The current Variable Funding Options are listed below, along with their
investment advisers and any subadviser.:
INVESTMENT INVESTMENT
FUNDING OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------------- --------------------------------------------- --------------------------------------
AIM VARIABLE INSURANCE FUNDS
AIM V.I. Core Equity Fund -- Series I+ The Fund's investment objective is growth of A I M Advisors, Inc.
capital.
AMERICAN FUNDS INSURANCE SERIES
American Funds Global Growth Fund -- Seeks capital appreciation through stocks. Capital Research and Management
Class 2 Company
American Funds Growth Fund -- Class 2 Seeks capital appreciation through stocks. Capital Research and Management
Company
American Funds Growth-Income Fund -- Seeks both capital appreciation and income. Capital Research and Management
Class 2 Company
CREDIT SUISSE TRUST
Credit Suisse Trust Emerging Market Seeks long-term growth of capital. Credit Suisse Asset Management, LLC
Portfolio+ Subadviser: Credit Suisse Asset
Management Limited (U.K.), (Australia)
DELAWARE VIP TRUST
Delaware VIP Small Cap Value Series -- Seeks capital appreciation. Delaware Management Company
Standard Class
DREYFUS VARIABLE INVESTMENT FUND
Dreyfus Variable Investment Fund Seeks long-term capital growth consistent The Dreyfus Corporation Subadviser:
Appreciation Portfolio -- Initial with the preservation of capital, with growth Fayez Sarofim & Co.
Shares of current income is a secondary objective.
Dreyfus Variable Investment Fund Seeks capital growth. The Dreyfus Corporation
Developing Leaders Portfolio --
Initial Shares
FRANKLIN TEMPLETON VARIABLE INSURANCE
PRODUCTS TRUST
Templeton Developing Markets Seeks long-term capital appreciation. Templeton Asset Management Ltd.
Securities Fund -- Class 2
Templeton Foreign Securities Fund -- Seeks long-term capital growth. Templeton Investment Counsel, LLC
Class 2 Subadviser: Franklin Templeton
Investment Management Limited
JANUS ASPEN SERIES
Mid Cap Growth Portfolio -- Service Seeks long-term growth of capital. Janus Capital Management LLC
Shares
Worldwide Growth Portfolio -- Service Seeks long-term growth of capital in a Janus Capital Management LLC
Shares+ manner consistent with the preservation of
capital.
LAZARD RETIREMENT SERIES, INC.
Lazard Retirement Small Cap Portfolio Seeks long-term capital appreciation. Lazard Asset Management LLC
22
INVESTMENT INVESTMENT
FUNDING OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------------- -------------------------------------------- --------------------------------------
LEGG MASON PARTNERS INVESTMENT SERIES
Legg Mason Partners Variable Dividend Seeks capital appreciation, principally Smith Barney Fund Management LLC
Strategy Portfolio+ through investments in dividend-paying
stocks.
Legg Mason Partners Variable Premier Seeks long-term capital growth. Smith Barney Fund Management LLC
Selections All Cap Growth Portfolio+
LEGG MASON PARTNERS VARIABLE PORTFOLIOS
I, INC.
Legg Mason Partners Variable All Cap Seeks capital appreciation. Salomon Brothers Asset Management
Portfolio -- Class I Inc
Legg Mason Partners Variable Investors Seeks long term growth of capital. Salomon Brothers Asset Management
Portfolio Secondarily seeks current income. The Fund Inc
normally invests in common stocks of
established companies.
Legg Mason Partners Variable Small Cap Seeks long term growth of capital. Salomon Brothers Asset Management
Growth Portfolio+ Inc
Legg Mason Partners Variable Total Seeks above average income (compared to a Salomon Brothers Asset Management
Return Portfolio -- Class I+ portfolio invested entirely in equity Inc
securities). Secondarily seeks growth of
capital and income.
LEGG MASON PARTNERS VARIABLE PORTFOLIOS
II
Legg Mason Partners Variable Seeks long-term appreciation of capital. Smith Barney Fund Management LLC
Appreciation Portfolio
Legg Mason Partners Variable Equity Seeks investment results that, before TIMCO Asset Management Inc
Index Portfolio -- Class II expenses, correspond to the price and yield
performance of the S&P 500 Index.
Legg Mason Partners Variable Long-term capital growth. Current income is Smith Barney Fund Management LLC
Fundamental Value Portfolio+* a secondary consideration
LEGG MASON PARTNERS VARIABLE PORTFOLIOS
III, INC.
Legg Mason Partners Variable Seeks high current income and to limit the Smith Barney Fund Management LLC
Adjustable Rate Income Portfolio degree of fluctuation of its net asset value
resulting from movements in interest rates.
Legg Mason Partners Variable Seeks long-term capital appreciation. Smith Barney Fund Management LLC
Aggressive Growth Portfolio
Legg Mason Partners Variable High Seeks high current income. Secondarily, Smith Barney Fund Management LLC
Income Portfolio seeks capital appreciation.
Legg Mason Partners Variable Seeks total return on assets from growth of Smith Barney Fund Management LLC
International All Cap Growth capital and income.
Portfolio+*
Legg Mason Partners Variable Large Cap Seeks long term growth of capital with Smith Barney Fund Management LLC
Growth Portfolio current income as a secondary objective.
Legg Mason Partners Variable Social Seeks long term capital appreciation and Smith Barney Fund Management LLC
Awareness Stock Portfolio retention of net investment income.
LEGG MASON PARTNERS VARIABLE PORTFOLIOS
V
Legg Mason Partners Variable Small Cap Seeks long term capital growth. Dividend, if Smith Barney Fund Management LLC
Growth Opportunities Portfolio any, is incidental to the goal.
MET INVESTORS SERIES TRUST
Batterymarch Mid-Cap Stock Portfolio Seeks growth of capital. Met Investors Advisory LLC Subadviser:
-- Class A Batterymarch Financial Management,
Inc.
Dreman Small-Cap Value Portfolio -- Seeks capital appreciation. Met Investors Advisory LLC Subadviser:
Class A Dreman Value Management L.L.C.
Harris Oakmark International Portfolio Seeks long-term capital appreciation. Met Investors Advisory LLC Subadviser:
-- Class A Harris Associates L.P.
Janus Capital Appreciation Portfolio Seeks capital appreciation. Met Investors Advisory LLC Subadviser:
-- Class A Janus Capital Management LLC
Legg Mason Partners Managed Assets Seeks high total return. Met Investors Advisory LLC Subadviser:
Portfolio Legg Mason Capital Management, Inc.
23
INVESTMENT INVESTMENT
FUNDING OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------------- ----------------------------------------------- ---------------------------------------
Lord Abbett Bond Debenture Portfolio Seeks high current income and the Met Investors Advisory LLC Subadviser:
-- Class A opportunity for capital appreciation to Lord, Abbett & Co. LLC
produce a high total return.
Lord Abbett Growth and Income Seeks growth of capital and current income Met Investors Advisory LLC Subadviser:
Portfolio -- Class B without excessive fluctuations in the market Lord, Abbett & Co. LLC
value.
Lord Abbett Mid-Cap Value Portfolio -- Seeks capital appreciation through Met Investors Advisory LLC Subadviser:
Class B investments, primarily in equity securities Lord, Abbett & Co. LLC
which are believed to be undervalued in the
marketplace.
Mercury Large-Cap Core Portfolio -- Seeks long-term capital growth. Met Investors Advisory LLC Subadviser:
Class A Merrill Lynch Investment Managers, L.P.
Met/AIM Capital Appreciation Portfolio Seeks capital appreciation. Met Investors Advisory LLC Subadviser:
-- Class A AIM Capital Management, Inc.
Met/AIM Small Cap Growth Portfolio -- Seeks long-term growth of capital. Met Investors Advisory LLC Subadviser:
Class A AIM Capital Management, Inc.
MFS(R) Value Portfolio -- Class A Seeks capital appreciation and reasonable Met Investors Advisory LLC Subadviser:
income. Massachusetts Financial Services
Company
Neuberger Berman Real Estate Portfolio Seeks to provide total return through Met Investors Advisory LLC Subadviser:
-- Class A investment in real estate securities, Neuberger Berman Management, Inc.
emphasizing both capital appreciation and
current income
Pioneer Fund Portfolio -- Class A Seeks reasonable income and capital growth. Met Investors Advisory LLC Subadviser:
Pioneer Investment Management, Inc.
Pioneer Mid-Cap Value Portfolio -- Seeks capital appreciation. Met Investors Advisory LLC Subadviser:
Class A Pioneer Investment Management, Inc.
Pioneer Strategic Income Portfolio -- Seeks a high level of current income. Met Investors Advisory LLC Subadviser:
Class A Pioneer Investment Management, Inc.
METLIFE INVESTMENT FUNDS
MetLife Investment Diversified Bond Seeks to provide maximum long-term total MetLife Investment Funds Management
Fund return (capital appreciation and income) by LLC Subadviser: Western Asset
investing primarily in fixed income securities. Management Company; Wellington
Management Company LLP: SSgA Funds
Management, Inc.
MetLife Investment International Stock Seeks to provide maximum long-term total MetLife Investment Funds Management
Fund return (capital appreciation and income) by LLC Subadviser: Alliance Capital
investing primarily in common stocks of Management L.P.; Oechsle International
established non-U.S. companies. Advisors LLC; and SSgA Funds
Management, Inc.
MetLife Investment Large Company Stock Seeks to provide maximum long-term total MetLife Investment Funds Management
Fund return (capital appreciation and income) by LLC Subadviser: Wellington
investing primarily in common stocks of well- Management Company; Smith Barney
established companies. Fund Management LLC, and SSgA Funds
Management, Inc.
MetLife Investment Small Company Stock Seeks to provide maximum long-term total MetLife Investment Funds Management
Fund return (capital appreciation and income) by LLC Subadviser: Delaware Management
investing primarily in common stocks of small Company; OFI Institutional
companies. Management, Inc.; and SSgA Funds
Management, Inc.
METROPOLITAN SERIES FUND, INC.
BlackRock Aggressive Growth Portfolio Seeks maximum capital appreciation. MetLife Advisers, LLC Subadviser:
-- Class D BlackRock Advisors, Inc.
24
INVESTMENT INVESTMENT
FUNDING OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------------- ---------------------------------------------- ---------------------------------
BlackRock Bond Income Portfolio -- Seeks competitive total return primarily from MetLife Advisers, LLC Subadviser:
Class A investing in fixed-income securities. BlackRock Advisors, Inc.
BlackRock Money Market Portfolio -- Seeks a high level of current income MetLife Advisers, LLC Subadviser:
Class A consistent with preservation of capital. BlackRock Advisors, Inc.
FI Large Cap Portfolio--Class A Seeks long-term growth of capital. MetLife Advisers, LLC Subadviser:
Fidelity Management & Research
Company
FI Value Leaders Portfolio -- Class D Seeks long-term growth of capital. MetLife Advisers, LLC Subadviser:
Fidelity Management & Research
Company
ASSET ALLOCATION PORTFOLIOS
MetLife Aggressive Allocation Seeks growth of capital. MetLife Advisers, LLC
Portfolio -- Class B
MetLife Conservative Allocation Seeks a high level of current income, with MetLife Advisers, LLC
Portfolio -- Class B growth of capital as a secondary objective.
MetLife Conservative to Moderate Seeks high total return in the form of income MetLife Advisers, LLC
Allocation Portfolio -- Class B and growth of capital, with a greater
emphasis on income.
MetLife Moderate Allocation Portfolio Seeks a balance between a high level of MetLife Advisers, LLC
-- Class B current income and growth of capital, with a
greater emphasis on growth of capital.
MetLife Moderate to Aggressive Seeks growth of capital. MetLife Advisers, LLC
Allocation Portfolio -- Class B
MFS(R) Total Return Portfolio -- Class Seeks a favorable total return through MetLife Advisers, LLC Subadviser:
F investment in a diversified portfolio. Massachusetts Financial Services
Company
Oppenheimer Global Equity Portfolio -- Seeks capital appreciation. MetLife Advisers, LLC Subadviser:
Class B OppenheimerFunds, Inc.
Western Asset Management High Yield Seeks high current income. MetLife Advisers, LLC Subadviser:
Bond Portfolio -- Class A Western Asset Management Company
Western Asset Management U.S. Seeks to maximize total return consistent with MetLife Advisers, LLC Subadviser:
Government Portfolio -- Class A preservation of capital and maintenance of Western Asset Management Company
liquidity.
PIMCO VARIABLE INSURANCE TRUST
Real Return Portfolio -- Seeks maximum total return, consistent with Pacific Investment Management
Administrative Class preservation of capital and prudent Company LLC
investment management.
Total Return Portfolio -- Seeks maximum total return, consistent with Pacific Investment Management
Administrative Class preservation of capital and prudent Company LLC
investment management.
PUTNAM VARIABLE TRUST
Putnam VT Discovery Growth Fund -- Seeks long-term growth of capital. Putnam Investment Management, LLC
Class IB+
Putnam VT International Equity Fund -- Seeks capital appreciation. Putnam Investment Management, LLC
Class IB+
Putnam VT Small Cap Value Fund -- Seeks capital appreciation. Putnam Investment Management, LLC
Class IB
Van Kampen Life Investment Trust
Comstock Portfolio Class II Seeks capital growth and income through Van Kampen Asset Management
investments in equity securities, including
common stocks, preferred stocks and
securities convertible into common and
preferred stocks.
Emerging Growth Portfolio Class II+ Seeks capital appreciation. Van Kampen Asset Management
Enterprise Portfolio Class II+ Seeks capital appreciation through Van Kampen Asset Management
investments in securities believed by the
portfolio's investment adviser to have above-
average potential for capital appreciation.
25
INVESTMENT INVESTMENT
FUNDING OPTION OBJECTIVE ADVISER/SUBADVISER
- --------------------------------------- ------------------------------------- -------------------------------------
VARIABLE INSURANCE PRODUCTS FUND
VIP Contrafund(R) Portfolio -- Service Seeks long-term capital appreciation. Fidelity Management & Research
Class 2 Company
VIP Dynamic Capital Appreciation Seeks capital appreciation. Fidelity Management & Research
Portfolio -- Service Class 2+ Company
VIP Mid Cap Portfolio -- Service Class Seeks long-term growth of capital. Fidelity Management & Research
2 Company
WELLS FARGO VARIABLE TRUST
Wells Fargo Advantage VT Small/MidCap Seeks long-term capital appreciation. Wells Fargo Funds Management, LLC
Value Fund+* Subadviser: Wells Capital Management,
Incorporated
- --------
+ Closed to new investors.
* This closed Variable Funding Option has been subject to a merger,
substitution or name change. Please see the tables below for more
information.
ASSET ALLOCATION PORTFOLIOS
The MetLife Conservative Allocation Portfolio, the MetLife Conservative to
Moderate Allocation Portfolio, the MetLife Moderate Allocation Portfolio, the
MetLife Moderate to Aggressive Allocation Portfolio and the MetLife Aggressive
Allocation Portfolio, also known as the "asset allocation portfolios", are
"fund of funds" portfolios that invest substantially all of their assets in
other Portfolios of the Metropolitan Series Fund, Inc. of the or the Met
Investors Series Trust. Therefore, each of these asset allocation portfolios
will bear its pro-rata share of the fees and expenses incurred by the
underlying portfolio in which it invests in addition to its own management fees
and expenses. This will reduce the investment return of each of the asset
allocation portfolios. The expense levels will vary over time, depending on the
mix of underlying portfolio, in which the asset allocation portfolio invests.
Contract Owners may be able to realize lower aggregate expenses by investing
directly in the underlying portfolios instead of investing in the asset
allocation portfolios. A Contract Owner who chooses to invest directly in the
underlying Portfolios would not however, receive asset allocation services
provided by MetLife Advisers. For more information regarding the asset
allocation portfolios, please read the prospectus for these portfolios.
FIXED ACCOUNT
- --------------------------------------------------------------------------------
We may offer our 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
. the distribution of various reports to Contract Owners
26
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
. 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
. 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 based upon
characteristics of the group. Such characteristics include, but are not limited
to, the nature of the group, size, facility by which purchase payments will be
paid, and aggregate amount of anticipated persistency. The availability of a
reduction or elimination of the withdrawal charge or the administrative charge
will be made in a reasonable manner and will not be unfairly discriminatory to
the interest of any Contract Owner.
The amount of a charge may not necessarily correspond to the costs associated
with providing the services or benefits indicated by the designated charge. For
example, the withdrawal charge we collect may not fully cover all of the sales
and distribution expenses we actually incur. The amount of any fee or charge is
not impacted by an outstanding loan. We may also profit on one or more of the
charges. We may use any such profits for any corporate purpose, including the
payment of sales expenses.
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 five 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 PAYMENT MADE WITHDRAWAL CHARGE
- -------------------------------------- -----------------
GREATER THAN OR EQUAL TO BUT LESS THAN
- ------------------------ -------------
0 years 1 year 5%
1 year 2 years 4%
2 years 3 years 3%
3 years 4 years 2%
4 years 5 years 1%
5+ years 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;
27
(b) any remaining free withdrawal allowance (as described below) (after
being reduced by (a), then;
(c) any remaining 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 Money) 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 minimum distribution, as defined under The
Code
. if withdrawals are taken due to a hardship, as defined under The Code
. if withdrawals are taken due to a disability, as defined under The Code,
of the Annuitant;
. if you are confined to an eligible nursing home, as described in
Appendix C (403 (B) PLANS ONLY).
FREE WITHDRAWAL ALLOWANCE
Beginning in the second Contract Year, 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 except those transferred directly to annuity contracts issued by
other financial institutions. We reserve the right to modify the free
withdrawal provision.
Any withdrawal is subject to federal income taxes on the taxable portion. In
addition, a 10% federal penalty may be assessed on any withdrawal if the
Contract Owner is under age 59 1/2. You should consult with your tax adviser
regarding the tax consequences of a withdrawal.
TRANSFER CHARGE
We reserve the right to assess a transfer charge of up to $10.00 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.
28
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. This charge is equal to 0.80% annually. If you
choose the Optional Death Benefit, the M&E charge is 1.25% annually. This
charge compensates the Company 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. Underlying Fund expenses
are not fixed or guaranteed and are subject to change by the Fund.
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 Payment
Options for a description of these benefits.
CHART ASSET ALLOCATION PROGRAM FEE
If you are a participant in the CHART Program, there is an additional fee.
Please see the "CHART Asset Allocation Program" sub-section under the section
"Asset Allocation Programs" in this prospectus.
29
PREMIUM TAX
Certain state and local governments charge premium taxes ranging from 0% to
3.5%, depending upon jurisdiction. We are responsible for paying these taxes
and will determine the method used to recover premium tax expenses incurred. We
will deduct any applicable premium taxes from your Contract Value either upon
death, surrender, annuitization, or at the time you make Purchase Payments to
the Contract, but no earlier than when we have a tax liability under state law.
CHANGES IN TAXES BASED UPON PREMIUM OR VALUE
If there is any change in a law assessing taxes against the Company based upon
premiums, Contract gains or value of the Contract, we reserve the right to
charge you proportionately for this tax.
TRANSFERS
- --------------------------------------------------------------------------------
Subject to the limitations described below, you may transfer all or part of
your Contract Value between Variable Funding Options at any time up to 30 days
before the Maturity Date. After the Maturity Date, you may make transfers only
if allowed by your Contract or with our consent. Transfer requests received at
our Home Office that are in good order before the close of the New York Stock
Exchange will be processed according to the value(s) next computed following
the close of business. Transfer requests received on a non-business day or
after the close of the New York Stock Exchange will be processed based on the
value(s) next computed on the next business day.
Where permitted by state law, we reserve the right to restrict transfers from
the Variable Funding Options to the Fixed Account whenever the credited
interest rate on the Fixed Account is equal to the minimum guaranteed interest
rate specified under the Contract.
Currently, there are no charges for transfers; however, we reserve the right to
charge a fee for any transfer request which exceeds twelve per year. Since each
Underlying Fund may have different overall expenses, a transfer of Contract
Values from one Variable Funding Option to another could result in your
investment becoming subject to higher or lower expenses. Also, when making
transfers, you should consider the inherent risks associated with the Variable
Funding Options to which your Contract Value is allocated.
MARKET TIMING/EXCESSIVE TRADING
Frequent requests from Contract Owners to transfer Contract Value may dilute
the value of an Underlying Fund's shares if the frequent trading involves an
attempt to take advantage of pricing inefficiencies created by a lag between a
change in the value of the securities held by the Underlying Fund and the
reflection of that change in the Underlying Fund's share price ("arbitrage
trading"). Regardless of the existence of pricing inefficiencies, frequent
transfers may also increase brokerage and administrative costs of the
Underlying Funds and may disrupt fund management strategy, requiring an
Underlying Fund to maintain a high cash position and possibly resulting in lost
investment opportunities and forced liquidations ("disruptive trading").
Accordingly, arbitrage trading and disruptive trading activities (referred to
collectively as "Market timing") may adversely affect the long-term performance
of the Underlying Funds, which may in turn adversely affect Contract Owners and
other persons who may have an interest in the Contracts (e.g., annuitants and
beneficiaries).
30
We have policies and procedures that attempt to detect and deter frequent
transfers in situations where we determine there is a potential for arbitrage
trading. Currently, we believe that such situations may be present in the
international, small-cap, and high-yield underlying funds (i.e., American Funds
Global Growth Fund, Emerging Market Portfolio, Delaware VIP Small Cap Value
Series, Developing Leaders Portfolio, Templeton Developing Markets Securities
Fund, Templeton Foreign Securities Fund, Worldwide Growth Portfolio, Lazard
Retirement Small Cap Portfolio, Legg Mason Partners Variable Small Cap Growth
Portfolio, Legg Mason Partners Variable High Income Portfolio,
Legg Mason Partners Variable International All Cap Growth Portfolio, Legg Mason
Partners Variable Small Cap Growth Opportunities Portfolio, Dreman Small-Cap
Value Portfolio, Harris Oakmark International Portfolio, Lord Abbett Bond
Debenture Portfolio, Met/AIM Small Cap Growth Portfolio, Pioneer Strategic
Income Portfolio, MetLife Investment International Stock Fund, MetLife
Investment Small Company Stock Fund, Oppenheimer Global Equity Portfolio,
Western Asset Management High Yield Bond Portfolio, Putnam VT International
Equity Fund, Putnam VT Small Cap Value Fund, and Wells Fargo VT Advantage
Small/Mid Cap Value Fund --the "Monitored Portfolios") and we monitor transfer
activity in those Monitored Portfolios. We employ various means to monitor
transfer activity, such as examining the frequency and size of transfers into
and out of the Monitored Portfolios within given periods of time. For example,
we currently monitor transfer activity to determine if, for each of the
Monitored Portfolios, in a three-month period there were two or more
"round-trips" of a certain dollar amount or greater. A round-trip is defined as
a transfer in followed by a transfer out within the next 10 calendar days or a
transfer out followed by a transfer in within the next 10 calendar days. In the
case of a Contract that has been restricted previously, a single round-trip of
a certain dollar amount or greater will trigger the transfer restrictions
described below.
We do not believe that other Underlying Funds present a significant opportunity
to engage in arbitrage trading and therefore do not monitor transfer activity
in those Underlying Funds. We may change the Monitored Portfolios at any time
without notice in our sole discretion. In addition to monitoring transfer
activity in certain Underlying Funds, we rely on the Underlying Fund to bring
any potential disruptive trading activity they identify to our attention for
investigation on a case-by-case basis. We will also investigate other harmful
transfer activity that we identify from time to time. We may revise these
policies and procedures in our sole discretion at any time without prior notice.
Our policies and procedures may result in transfer restrictions being applied
to deter market timing. Currently, when we detect transfer activity in the
Monitored Portfolios that exceeds our current transfer limits, or other
transfer activity that we believe may be harmful to other Contract Owners or
other persons who have an interest in the Contracts, we will exercise our
contractual right to restrict your number of transfers to one every six months.
In addition, we also reserve the right, but do not have the obligation, to
further restrict the right to request transfers by any market timing firm or
any other third party who has been authorized to initiate transfers on behalf
of multiple Contract Owners. We may, among other things:
. reject the transfer instructions of any agent acting under a power of
attorney on behalf of more than one owner, or
. reject the transfer or exchange instructions of individual owners who
have executed pre-authorized transfer forms which are submitted by
market timing firms or other third parties on behalf of more than one
owner.
Transfers made under a Dollar Cost Averaging Program, a rebalancing program or,
if applicable, any asset allocation program described in this prospectus are
not treated as transfers when we evaluate trading patterns for market timing.
The detection and deterrence of harmful transfer activity involves judgments
that are inherently subjective, such as the decision to monitor only those
underlying funds that we believe are susceptible to arbitrage trading or the
determination of the transfer limits. Our ability to detect and/or restrict
such transfer
31
activity may be limited by operational and technological systems, as well as
our ability to predict strategies employed by owners to avoid such detection.
Our ability to restrict such transfer activity also may be limited by
provisions of the contract. Accordingly, there is no assurance that we will
prevent all transfer activity that may adversely affect owners and other
persons with interests in the Contracts. We do not accommodate market timing in
any Underlying Funds and there are no arrangements in place to permit any
Contract Owner to engage in market timing; we apply our policies and procedures
without exception, waiver, or special arrangement.
The Underlying Funds may have adopted their own policies and procedures with
respect to frequent purchases and redemptions of their respective shares, and
we reserve the right to enforce these policies and procedures. For example,
Underlying Funds may assess a redemption fee (which we reserve the right to
collect) on shares held for a relatively short period. The prospectuses for the
Underlying Funds describe any such policies and procedures, which may be more
or less restrictive than the policies and procedures we have adopted. Contract
Owners and other persons with interests in the Contracts should be aware that
we currently may not have the contractual obligation or the operational
capacity to apply the frequent trading policies and procedures of the
Underlying Funds. However, under rules recently adopted by the Securities and
Exchange Commission, effective October 16, 2006 we will be required to
(1) enter into a written agreement with each Underlying Fund or its principal
underwriter that will obligate us to provide to the Underlying Fund promptly
upon request certain information about the trading activity of individual
Contract Owners, and (2) execute instructions from the Underlying Fund to
restrict or prohibit further purchase payments or transfers by specific
Contract Owners who violate the frequent trading policies established by the
Underlying Fund.
In addition, Contract Owners and other persons with interests in the Contracts
should be aware that some Underlying Funds may receive "omnibus" purchase and
redemption orders from other insurance companies or intermediaries such as
retirement plans. The omnibus orders reflect the aggregation and netting of
multiple orders from individual owners of variable insurance contracts and/or
individual retirement plan participants. The omnibus nature of these orders may
limit the Underlying Funds in their ability to apply their frequent trading
policies and procedures. In addition, the other insurance companies and/or
retirement plans may have different policies and procedures or may not have any
such policies and procedures because of contractual limitations. For these
reasons, we cannot guarantee that the Underlying Fund (and thus Contract
Owners) will not be harmed by transfer activity relating to other insurance
companies and/or retirement plans that may invest in the Underlying Funds.
In accordance with applicable law, we reserve the right to modify or terminate
the transfer privilege at any time. We also reserve the right to defer or
restrict the transfer privilege at any time that we are unable to purchase or
redeem shares of any of the Underlying Fund, including any refusal or
restriction on purchases or redemptions of their shares as a result of their
own policies and procedures on market timing activities (even if an entire
omnibus order is rejected due to the market timing activity of a single
Contract Owner. You should read the Underlying Fund prospectuses for more
details.
32
CHART ASSET ALLOCATION PROGRAM
- --------------------------------------------------------------------------------
GENERAL
Asset allocation is a method of investment diversification that allocates
assets among asset classes with the goal of managing investment risk and
potentially enhancing returns over the long term. An asset Class refers to a
category of investments having similar characteristics, such as
stocks/equities, bonds/ fixed income, and cash equivalents. There are often
further divisions among wider asset classes, for example, classes representing
company size (large cap, mid cap, and small cap), and classes representing
foreign and U.S. investments. Asset allocation strategies reflect the theory
that diversification among asset classes can help reduce volatility over the
long term. THERE IS NO ASSURANCE THAT INVESTMENT RETURNS WILL BE BETTER THROUGH
PARTICIPATION IN AN ASSET ALLOCATION PROGRAM -- INVESTMENTS MAY STILL LOSE
MONEY AND EXPERIENCE VOLATILITY.
THE ASSET ALLOCATION PROGRAM DESCRIBED BELOW IS NOT A PART OF THE CONTRACT
ISSUED BY THE COMPANY. THE COMPANY IS NOT REGISTERED AS AN INVESTMENT ADVISER,
AND IS NOT OFFERING INVESTMENT ADVICE IN MAKING AVAILABLE THE ASSET ALLOCATION
PROGRAM.
CHART ASSET ALLOCATION PROGRAM
Effective February 1, 2006, the CHART Asset Allocation Program is closed to new
participants. If you enrolled in the program prior to February 1, 2006, you may
continue to make additional Purchase Payments into the program. If you cancel
your enrollment in the program, you may not re-enroll.
An affiliate of the Company, MIFS, ( formerly CitiStreet Financial Services
LLC), offers an asset allocation program to participants of qualified
retirement plans who own the Contract individually or are participants in a
group Contract owned by the plan (collectively, "participants"). The program,
called "CHART", is available for an additional asset-based fee that is payable
by the participant to MIFS for offering the program. When a participant elects
the program ("program participant"), he or she must enter into an investment
advisory agreement with MIFS. MIFS has a fiduciary obligation with respect to
program participants.
Metropolitan Life Insurance Company, a broker-dealer and affiliate of MIFS, may
receive compensation payable by the Company for selling the Contract to your
plan and for additional contributions made by plan participants. MIFS entered
into a Solicitation Agreement with MetLife Securities, Inc., a broker-dealer
affiliate of both the Company and Metropolitan Life Insurance Company, whereby
MetLife Securities, Inc. is compensated by MIFS for referring participants who
enter into investment advisory agreements with MIFS to participate in CHART.
MIFS, Metropolitan Life Insurance Company and MetLife Securities, Inc. are all
our affiliates.
THE FOLLOWING IS A GENERAL DESCRIPTION OF THE CHART PROGRAM -- A COMPLETE
DESCRIPTION IS AVAILABLE IN THE DISCLOSURE STATEMENT FOR THE PROGRAM. NOTE:
THERE ARE LIMITATIONS ON THE INVESTMENT ADVISORY ACTIVITIES THAT MIFS'S
REPRESENTATIVES CAN PERFORM FOR PROGRAM PARTICIPANTS. PLEASE REFER TO THE
DISCLOSURE STATEMENT AND OTHER DOCUMENTS THAT MIFS IS REQUIRED TO PROVIDE TO
YOU.
Participants who enter into an investment advisory agreement with MIFS to
participate in the program are authorizing MIFS to allocate their Contract
Value according to asset allocation models developed in consultation with
CRA/RogersCasey, Inc., a well-known investment consulting firm. When electing
the program, a program participant must complete a questionnaire designed to
evaluate his or her risk tolerance and investment time horizon. Based on the
results of the questionnaire, participants are matched to an investor profile.
Each investor profile establishes allocation percentages among four "program
funds", each of which is a Variable Funding Option offered under the Contract.
Currently, the program funds are MetLife Investment International
33
Stock Fund (formerly, CitiStreet International Stock Fund), MetLife Investment
Small Company Stock Fund (formerly, CitiStreet Small Company Stock Fund),
MetLife Investment Large Company Stock Fund (formerly, CitiStreet Large Company
Stock Fund) and MetLife Investment Diversified Bond Fund (formerly, CitiStreet
Diversified Bond Fund). Each of the program funds is advised by MetLife
Investment Funds, Inc. (formerly, CitiStreet Funds Management LLC), an
affiliate of MIFS.
Periodically, MIFS reviews its investment model and each investor profile, and
may make changes to the allocation percentages between the asset classes of the
investor profiles, may change the number of asset classes, or may change the
program funds. If, as a result of such review, a change is made to an investor
profile, MIFS will notify program participants in advance of the change, and
the participant will have the opportunity to reject the change.
At any time, a program participant can request a change to his or her investor
profile or the allocation of his or her Contract Value amongst the Variable
Funding Options, or can elect to terminate the program. Program participants
are encouraged to regularly reconsider their investor profile or allocation by
calling MIFS at the phone number provided in the investor advisory agreement
for a review. Program participants are encouraged to do this at least once a
year. In addition, program participants will receive a quarterly performance
report from the Company that provides information about the Variable Funding
Options.
Program participants who elect to participate in CHART are required to only
allocate their Contract Value amongst the program funds. A program participant
can elect to have his or her Contract Value "rebalanced" on a monthly,
quarterly, semi-annual, or annual basis, to maintain the asset allocation
percentages originally selected according to the model portfolio or a
customized portfolio.
PROGRAM FEES -- DEDUCTIONS FROM CONTRACT VALUE
MIFS charges an annual asset-based fee to participate in the program as a
percentage of the participant's Contract Value, as described in the table below.
MAXIMUM
CONTRACT VALUE ANNUAL FEE FOR
EQUAL OR GREATER THAN BUT LESS THAN CHART PROGRAM
- --------------------- ------------- --------------
$0 $25,000 0.75
$25,000 $50,000 0.75
$50,000 $75,000 0.50
$75,000 $100,000 0.35%
$100,000 $250,000 0.25%
$250,000 $500,000 0.15%
$500,00+ 0.10%
Please refer to the disclosure statement for the program for a detailed
description of how and when the annual program fee is calculated and when it is
deducted.
The annual fee to participate in the program is in addition to any Contract
fees and charges. Fees payable for participating in the program are deducted on
a quarterly basis from the Contract as a partial surrender. Partial surrenders
made to pay program fees will reduce the participant's Contract Value, the
guaranteed minimum death benefit, and the amount available for free withdrawals.
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)
34
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.
For amounts allocated to the Variable Funding Options, we may defer payment of
any Cash Surrender Value for a period of up to five business days after the
Written Request is received. For amounts allocated to the Fixed Account, we may
defer payment of any Cash Surrender Value for a period up to six months. In
either case, it is our intent to pay as soon as possible. We cannot process
requests for withdrawals that are not in good order. We will contact you if
there is a deficiency causing a delay and will advise what is needed to act
upon the withdrawal request.
If your Contract is issued as part of a 403(b) plan, there are restrictions on
your ability to make withdrawals from your Contract. You may not withdraw
contributions or earnings made to your Contract after December 31, 1988 unless
you are (a) age 59 1/2, (b) no longer employed, (c) deceased, (d) disabled, or
(e) experiencing a financial hardship. Even if you are experiencing a financial
hardship, you may only withdraw contributions, not earnings. You should consult
with your tax adviser before making a withdrawal from your Contract.
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 funding options in which you have an interest, unless you
instruct us otherwise. You may begin or discontinue systematic withdrawals at
any time by notifying us in writing, but you must give at least 30 days notice
to change any systematic withdrawal instructions that are currently in place.
We reserve the right to discontinue offering systematic withdrawals or to
assess a processing fee for this service upon 30 days written notice to
Contract Owners (where allowed by state law).
Each systematic withdrawal is subject to federal income taxes on the taxable
portion. In addition, a 10% federal penalty tax may be assessed on systematic
withdrawals if the Contract Owner is under age 59 1/2. There is no additional
fee for electing systematic withdrawals. You should consult with your tax
adviser regarding the tax consequences of systematic withdrawals.
MANAGED DISTRIBUTION PROGRAM. Under the systematic withdrawal option, you may
choose to participate in the Managed Distribution Program. At no cost to you,
you may instruct us to calculate and make minimum distributions that may be
required by the IRS upon reaching age 70 1/2. (See Federal Tax Considerations")
These payments will not be subject to the withdrawal charge and will be in lieu
of the free withdrawal allowance. No Dollar Cost Averaging will be permitted if
you are participating in the Managed Distribution Program.
OWNERSHIP PROVISIONS
- --------------------------------------------------------------------------------
TYPES OF OWNERSHIP
CONTRACT OWNER
The Contract belongs to the Contract Owner named in the Contract (on the
Contract Specifications page). The Annuitant is the individual upon whose life
the Maturity Date and the amount of monthly 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.
35
If this Contract is purchased by a beneficiary of another contract who directly
transferred the death proceeds due under that contract, he/she will be granted
the same rights the owner has under the Contract except that he/she cannot take
a loan or make additional Purchase Payments.
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 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
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
- --------------------------------------------------------------------------------
5Before the Maturity Date, generally, 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 or election of beneficiary contract continuance ("Death Report
Date").
DEATH PROCEEDS BEFORE THE MATURITY DATE
STANDARD DEATH BENEFIT
ANNUITANT'S AGE ON THE CONTRACT DATE DEATH BENEFIT PAYABLE
- -------------------------------------------------------------------------------
Before Age 80 Greater of:
1) Contract Value on the Death
Report Date, or
2) Total Purchase Payments less
the total of any withdrawals
(and related charges).
- -------------------------------------------------------------------------------
On or after Age 80 Contract Value
- -------------------------------------------------------------------------------
36
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 ON THE CONTRACT DATE DEATH BENEFIT PAYABLE
- -------------------------------------------------------------------------------
Under Age 70 Greater of:
1) Contract Value on the Death
Report Date, or
2) Total Purchase Payments less
the total of any withdrawals
(and related charges); or
3) Maximum Step-Up death
benefit value (described
below) associated with
Contract Date anniversaries
beginning with the 5th, and
ending with the last before
the Annuitant's 76th
birthday.
- -------------------------------------------------------------------------------
Age 70-75 Greater of:
1) Contract Value, or
2) Total Purchase Payments less
the total of any withdrawals
(and related charges); or
3) Step-Up death benefit value
(described below) associated
with the 5th 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. The Step-Up death benefit value 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 immediately prior to the withdrawal, 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 step-up
value immediately prior to the withdrawal 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 step-up value immediately prior
to the withdrawal 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.
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PAYMENT OF PROCEEDS
We describe the process of paying death benefit proceeds before the Maturity
Date in the chart below. The chart does not encompass every situation and is
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.
BEFORE THE MATURITY DATE, THE COMPANY WILL
UPON THE DEATH OF THE PAY THE PROCEEDS TO: MANDATORY PAYOUT RULES APPLY*
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OWNER/ANNUITANT......... The beneficiary (ies), or if none, to the Yes
CONTRACT OWNER's estate.
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BENEFICIARY............. No death proceeds are payable; N/A
Contract continues.
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CONTINGENT BENEFICIARY.. No death proceeds are payable; N/A
Contract continues.
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* Certain payout rules of the Internal Revenue Code (IRC) are triggered upon
the death of the 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. If mandatory distributions have begun, the 5 year payout option
is not available.
BENEFICIARY CONTRACT CONTINUANCE (NOT PERMITTED FOR NON-NATURAL BENEFICIARIES)
If you die before the Maturity Date, and if the value of any beneficiary's
portion of the death benefit is between $20,000 and $1,000,000 as of the Death
Report Date, (more than $1,000,000 is subject to Home Office approval), your
beneficiary(s) may elect to continue his/her portion of the Contract subject to
applicable Internal Revenue Code distribution requirements, rather than receive
the death benefit in a lump sum. If the beneficiary chooses to continue the
Contract, the beneficiary can extend the payout phase of the Contract enabling
the beneficiary to "stretch" the death benefit distributions out over his life
expectancy as permitted by the Internal Revenue Code.
If your beneficiary elects to continue the Contract, the death benefit will be
calculated as of the Death Report Date. The initial Contract Value of the
continued Contract (the "adjusted Contract Value") will equal the greater of
the Contract Value or the death benefit calculated on the Death Report Date and
will be allocated to the funding options in the same proportion as prior to the
Death Report Date. If the adjusted Contract Value is allocated to the Variable
Funding Options, the beneficiary bears the investment risk.
The beneficiary who continues the Contract will be granted the same rights as
the owner under the original Contract, except the beneficiary cannot:
. take a loan
. make additional Purchase Payments
The beneficiary may also name his/her own beneficiary ("succeeding
beneficiary") and has the right to take withdrawals at any time after the Death
Report Date without a withdrawal charge. All other fees and charges applicable
to the original Contract will also apply to the continued Contract. All
benefits and features of the continued Contract will be based on the
beneficiary's age on the Death Report Date as if the beneficiary had purchased
the Contract with the adjusted Contract Value on the Death Report Date.
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PLANNED DEATH BENEFIT (INDIVIDUAL CONTRACTS ONLY)
You may request that rather than receive a lump-sum death benefit, the
beneficiary(ies) receive all or a portion of the death benefit proceeds either:
. through an annuity for life or a period that does not exceed the
beneficiary's life expectancy or
. under the terms of the Beneficiary Continuance provision described
above. If the Beneficiary Continuance provision is selected as a planned
death benefit, no surrenders will be allowed other than payments meant
to satisfy minimum distribution amounts or systematic withdrawal
amounts, if greater.
You must make the planned death benefit request as well as any revocation of
this request in writing. Upon your death, your beneficiary(s) cannot revoke or
modify this request. If the death benefit at the time we receive Due Proof of
Death is less than $2,000, we will only pay a lump sum to the beneficiary. If
periodic payments due under the planned death benefit election are less than
$100, we reserve the right to make Annuity Payments at less frequent intervals,
resulting in a payment of at least $100 per year. If no beneficiary is alive
when death benefits become payable, we will pay the death benefit as provided
in your Contract.
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
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MATURITY DATE
Under the Contract, you can receive regular payments ("Annuity Payments"). You
can choose the month and the year in which those payments begin ("Maturity
Date"). 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 the Annuitant's 90th
birthday or ten years after the effective date of the Contract, if later.
This requirement may be changed by us.
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.
39
LIQUIDITY BENEFIT (BENEFIT NOT AVAILABLE UNDER 457 PLANS)
If you select any annuity option that 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 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 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.
40
The market value adjustment formula for calculating the present value described
above for fixed Annuity Payments is as follows:
n
Present Value = (sigma) [Payment\\s\\ X (1/1 + iC)/t/365/
s = 1
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 D 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 funding options as you have
selected during the accumulation period. At least 30 days before the Maturity
Date, you may transfer the Contract Value among the funding options in order to
change the basis on which we will determine Annuity Payments. (See Transfers.)
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 Contract Value as of 14 days
before the date Annuity Payments begin, less any applicable premium taxes not
previously deducted.
The amount of your first monthly payment depends on the annuity option you
elected and the Annuitant's adjusted age. Your Contract contains the formula
for determining the adjusted age. We determine the total first monthly Annuity
Payment by multiplying the benefit per $1,000 of value shown in the Contract
tables by the number of thousands of dollars of Contract Value you apply to
that annuity option. The Contract tables factor in an assumed daily net
investment factor of 3.0%. We call this your net investment rate. Your net
investment rate of 3% 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 Payments 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, as described
41
above, of the applicable funding options. The total amount of each Annuity
Payment will equal the sum of the basic payments in each funding option. We
determine the actual amounts of these payments by multiplying the number of
Annuity Units we credited to each funding option by the corresponding Annuity
Unit value as of the date 14 days before the date the payment is due.
FIXED ANNUITY
You may choose a fixed annuity that provides payments that do not vary during
the annuity period. We will calculate the dollar amount of the first fixed
Annuity Payment as described under Variable Annuity, except that the amount we
apply to begin the annuity will be your Contract Value as of the date Annuity
Payments begin. Payout rates will not be lower than that shown in the Contract.
If it would produce a larger payment, the first fixed Annuity Payment will be
determined using the Life Annuity Tables in effect on the Maturity Date.
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
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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 Variable Funding
Options selected by you, your Annuity Payments will never be less than a
certain 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 FI
Value Leaders Portfolio, BlackRock Bond Income Portfolio and the Western Asset
Management U.S. Government 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
42
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.
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 without Life Contingency. We will make
periodic payments for the period selected.
Option 6 -- Other Annuity Options. We will make any other arrangements for
Annuity Payments as may be mutually agreed upon.
MISCELLANEOUS CONTRACT PROVISIONS
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RIGHT TO RETURN
You may return the Contract for a full refund of the Contract Value plus any
Contract charges and premium taxes you paid (but not any fees and charges the
Underlying Fund assessed) within ten days after you receive it (the "right to
return period"). You bear the investment risk of investing in the Variable
Funding Options during the right to return period; therefore, the Contract
Value we return may be greater or less than your Purchase Payment.
If you purchase the Contract as an Individual Retirement Annuity, and return it
within the first seven days after delivery, or longer if your state permits, we
will refund your Purchase Payment in full; during the remainder of the right to
return period, we will refund the Contract Value (including charges).
43
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 different period, or the return of Purchase Payments or other
variations of this provision, we will comply. Refer to your Contract for any
state-specific information.
TERMINATION
We reserve the right to terminate the Contract on any business day if 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. In certain states we may be required to pay you the Contract
Value.
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
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MetLife Insurance Company of Connecticut and MetLife Life and Annuity Company
of Connecticut each sponsor Separate Accounts: Separate Account Five and
Separate Account Six, respectively. Both Separate Account Five and Separate
Account Six were established on March 27, 1997 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. 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 that 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 or to qualified pension or retirement plans as permitted under the
Internal Revenue Code of 1986, as amended, and the regulations thereunder.
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
44
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.
We reserve the right to transfer assets of the Separate Account to another
separate account, and to modify the structure or operation of the Separate
Account, subject to the necessary regulatory approvals. If we do so, we
guarantee that the modification will not affect your Contract Value.
PERFORMANCE INFORMATION
In advertisements for the Contract, we may include performance figures to show
you how a Variable Funding Option has performed in the past. These figures are
rates of return or yield quotations shown as a percent. These figures show past
performance of a Variable Funding Option and are not an indication of how a
Variable Funding Option will perform in the future.
Our advertisements may show performance figures assuming that you do not elect
any optional features such as the Optional Death Benefit. However, if you elect
optional features, they involve additional charges that will serve to decrease
the performance of your Variable Funding Options. You may wish to speak with
your registered representative to obtain performance information specific to
the optional features you may wish to select.
Performance figures for each Variable Funding Option are based in part on the
performance of a corresponding Underlying Fund. In some cases, the Underlying
Fund may have existed before the technical inception of the corresponding
Variable Fund Option. In those cases, we can create "hypothetical historical
performance" of a Variable Fund Option. These figures show the performance that
the Variable Fund Option would have achieved had it been available during the
entire history of the Underlying Fund.
In a low interest rate environment, yields for money market Subaccounts, after
deduction of the Mortality and Expense Risk Charge, Administrative Expense
Charge and the charge for any optional benefit riders (if applicable), may be
negative even though the Underlying Fund's yield, before deducting for such
charges, is positive. If you allocate a portion of your Contract Value to a
money market Subaccount or participate in an asset allocation program where
Contract Value is allocated to a money market Subaccount under the applicable
asset allocation model, that portion of your Contract Value may decrease in
value.
FEDERAL TAX CONSIDERATIONS
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The following general discussion of the federal income tax consequences related
to the Participant's (for purposes of this section, referred to as "You")
investment in this Contract is not intended to cover all situations, and is not
meant to provide tax or legal advice. Because of the complexity of the law and
the fact that the tax results will vary depending on many factors, you should
consult your tax and/or legal adviser regarding the tax implications of
purchasing this Contract based upon your individual situation. For further tax
information, an additional discussion of certain tax matters may be contained
in the SAI.
GENERAL TAXATION OF ANNUITIES
Congress has recognized the value of saving for retirement by providing certain
tax benefits, in the form of tax deferral, for premiums paid under an annuity
and permitting tax-free transfers between the various investment options
offered under the Contract. The Internal Revenue Code ("Code")
45
governs how earnings on your investment in the Contract are ultimately taxed,
depending upon the type of contract, qualified or non-qualified, and the manner
in which the money is distributed, as briefly described below. In analyzing the
benefits of tax deferral it is important to note that the Jobs and Growth Tax
Relief Reconciliation Act of 2003 amended Code Section 1 to reduce the marginal
tax rates on long-term capital gains and dividends to 5% and 15%. The reduced
rates apply during 2003 through 2008, and thereafter will increase to prior
levels. Earnings under annuity contracts, like interest payable on fixed
investments (notes, bonds, etc.) continue to be taxed as ordinary income (top
rate of 35%).
FEDERAL ESTATE TAXES. While no attempt is being made to discuss the Federal
estate tax implications of the Contract, you should keep in mind that the value
of an annuity contract owned by a decedent and payable to a beneficiary by
virtue of surviving the decedent is included in the decedent's gross estate.
Depending on the terms of the annuity contract, the value of the annuity
included in the gross estate may be the value of the lump sum payment payable
to the designated beneficiary or the actuarial value of the payments to be
received by the beneficiary. Consult an estate planning advisor for more
information.
GENERATION-SKIPPING TRANSFER TAX. Under certain circumstances, the Code may
impose a "generation skipping transfer tax" when all or part of an annuity
contract is transferred to, or a death benefit is paid to, an individual two or
more generations younger than the contract owner. Regulations issued under the
Code may require us to deduct the tax from your Contract, or from any
applicable payment, and pay it directly to the IRS
To the extent permitted under Federal income tax law, the Separate Account may
claim the benefit of certain tax credits attributable to taxes paid by certain
of the Portfolios to foreign jurisdictions.
The rules for state and local income taxes may differ from the Federal income
tax rules. Contract Owners and prospective contract owners of the Contract
should consult their own tax advisors and the law of the applicable taxing
jurisdiction to determine what rules and tax benefits apply to the contract.
QUALIFIED ANNUITY CONTRACTS
If you purchase your Contract with proceeds of an eligible rollover
distribution from any qualified employee pension plan or individual retirement
annuity (IRA), your Contract is referred to as a Qualified Contract. Some
examples of Qualified Contracts are: IRAs, tax-sheltered annuities established
by public school systems or certain tax-exempt organizations under Code
Section 403(b), corporate sponsored pension and profit-sharing plans (including
401(k) plans), Keogh Plans (for self-employed individuals), and certain other
qualified deferred compensation plans. Another type of Qualified Contract is a
Roth IRA, under which after-tax contributions accumulate until maturity, when
amounts (including earnings) may be withdrawn tax-free. The rights and benefits
under a Qualified Contract may be limited by the terms of the retirement plan,
regardless of the terms and conditions of the Contract. Plan participants
making contributions to Qualified Contracts will be subject to the required
minimum distribution rules as provided by the Code and described below.
All IRAs, TSAs (ERISA and non-ERISA) (S)457(b), (S)403(a), SEP and SIMPLE plans
and 401(a) and 401(k) plans (hereinafter "Qualified Plans" unless otherwise
specified) receive tax deferral under the Code. Although there are no
additional tax benefits by funding your Qualified Plan with an annuity, doing
so does offer you additional insurance benefits such as the availability of a
guaranteed income for life.
KEOGH A Keogh plan is generally a qualified retirement plan (defined
contribution or defined benefit) that covers a self-employed person. Other
employees may also be covered. Special rules apply to contribution limits in
the case of a self-employed person. The tax rules work similarly to the
withdrawal, distribution and eligible distribution rules as under IRAs.
However, there may be some differences: consult your tax advisor.
46
TAXATION OF QUALIFIED ANNUITY CONTRACTS
Under a qualified annuity, since amounts paid into the Contract have generally
not yet been taxed, the full amount of such distributions, including the amount
attributable to Purchase Payments, whether paid in the form of lump-sum
withdrawals or Annuity Payments, are generally taxed at the ordinary income tax
rate unless the distribution is transferred to an eligible rollover account or
contract. The Contract is available as a vehicle for IRA rollovers and for
other Qualified Contracts. There are special rules which govern the taxation of
Qualified Contracts, including withdrawal restrictions, requirements for
mandatory distributions, and contribution limits. Amounts rolled over to the
Contract from other qualified plan funding vehicles are generally not subject
to current taxation.
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 (except for 5% or more owners). If you own more than one individual
retirement annuity and/or account, you may satisfy the minimum distribution
rules on an aggregate basis (i.e. determine the total amount of required
distributions from all IRAs and take the required amount from any one or more
IRAs). A similar aggregate approach is available to meet your 403(b) minimum
distribution requirements if you have multiple 403(b) annuities. Recently
promulgated Treasury regulations changed the distribution requirements;
therefore, it is important that you consult your tax adviser as to the impact
of these regulations on your personal situation.
Final income tax regulations regarding minimum distribution requirements were
released in June 2004. These regulations affect both deferred and income
annuities. Under these new rules, effective with respect to minimum
distributions required for the 2006 distribution year, in general, the value of
all benefits under a deferred annuity (including death benefits in excess of
cash value must be added to the Contract Value in computing the amount required
to be distributed over the applicable period. We will provide You with
additional information as to the amount of your interest in the Contract that
is subject to required minimum distributions under this new rule and either
compute the required amount for You or offer to do so at Your request. The new
rules are not entirely clear and you should consult your own tax advisors as to
how these rules affect your own Contract.
MINIMUM DISTRIBUTIONS FOR BENEFICIARIES UPON THE ANNUITANT'S DEATH: Upon the
death of the Annuitant (a plan participant) of a Qualified Contract, the
participant's remaining interest in the Contract must be completely withdrawn
within 5 years from the date of death (including in a single lump sum) or
minimum distributions may be taken over the life expectancy of the individual
beneficiaries (and in certain situations, trusts for individuals), provided
such distributions are payable at least annually and begin within one year from
the date of death. Alternative rules permit a spousal beneficiary under a
qualified contract to defer the minimum distribution requirements until the end
of the year in which the deceased spouse would have attained age 70 1/2 or to
rollover the death proceeds to his or her own IRA or to another eligible
retirement plan in which he or she participates.
INDIVIDUAL RETIREMENT ANNUITIES
To the extent of earned income for the year and not exceeding the applicable
limit for the taxable year, an individual may make deductible contributions to
an individual retirement annuity (IRA). The applicable limit ($2,000 per year
prior to 2002) has been increased by the Economic Growth and Tax Relief
Reconciliation Act of 2001 ("EGTRRA"). The limit is $3,000 for calendar years
2002-2004, $4,000 for
47
calendar years 2005-2007, and will be indexed for inflation in years subsequent
to 2008. Additional "catch-up contributions" may be made to an IRA by
individuals age 50 or over. There are certain limits on the deductible amount
based on the adjusted gross income of the individual and spouse and on their
participation in a retirement plan. If an individual is married and the spouse
is not employed, the individual may establish IRAs for the individual and
spouse. Purchase Payments may then be made annually into IRAs for both spouses
in the maximum amount of 100% of earned income up to a combined limit based on
the individual limits outlined above.
Deductible contributions to an IRA and Roth IRA for the year must be aggregated
for purposes of the individual Code Section 408A limits and the Code
Section 219 limits (age 50+catch-up).
Partial or full distributions are treated as ordinary income, except that
amounts contributed after 1986 on a non-deductible basis are not includable in
income when distributed. An additional tax of 10% will apply to any taxable
distribution from the IRA that is received by the participant before the age of
59 1/2 except by reason of death, disability or as part of a series of payments
for life or life expectancy. Distributions must commence by April 1st of the
calendar year after the close of the calendar year in which the individual
attains the age of 70 1/2. Certain other mandatory distribution rules apply on
the death of the individual. The individual must maintain personal and tax
return records of any non-deductible contributions and distributions.
Section 408 (k) of the Code provides for the purchase of a Simplified Employee
Pension (SEP) plan. A SEP is funded through an IRA and can accept an annual
employer contribution limited to the lesser of $42,000 or 100% of pay for each
participant in 2005 ($44,000 for 2006).
ROTH IRAS
Effective January 1, 1998, Section 408A of the Code permits certain individuals
to contribute to a Roth IRA. Eligibility to make contributions is based upon
income, and the applicable limits vary based on marital status and/or whether
the contribution is a rollover contribution from another IRA or an annual
contribution. Contributions to a Roth IRA, which are subject to certain
limitations, (similar to the annual limits for traditional IRAs), are not
deductible and must be made in cash or as a rollover or transfer from another
Roth IRA or other IRA. A conversion of "traditional" IRA to a Roth IRA may be
subject to tax and other special rules apply. You should consult a tax adviser
before combining any converted amounts with other Roth IRA contributions,
including any other conversion amounts from other tax years.
Qualified distributions from a Roth IRA are tax-free. A qualified distribution
requires that the Roth IRA has been held for at least 5 years, and the
distribution is made after age 59 1/2, on death or disability of the owner, or
for a limited amount ($10,000) for a qualified first time home purchase for the
owner or certain relatives. Income tax and a 10% penalty tax may apply to
distributions made (1) before age 59 1/2 (subject to certain exceptions) or
(2) during five taxable years starting with the year in which the first
contribution is made to the Roth IRA.
NOTE TO PARTICIPANTS IN QUALIFIED PLANS INCLUDING 401, 403(B), 457 AS WELL AS
IRA OWNERS: While annual plan contribution limits may be increased from time to
time by Congress and the IRS for federal income tax purposes, these limits must
be adopted by each state for the higher limits to be effective at a state
income tax level. In other words, the permissible contribution limit for income
tax purposes may be different at the federal level from your state's income tax
laws. Therefore, in certain states, a portion of the contributions may not be
excludible or deductible from state income taxes. Please consult your employer
or tax adviser regarding this issue.
PENALTY TAX FOR PREMATURE DISTRIBUTIONS
For Qualified Contracts, taxable distributions taken before the Contract Owner
has reached the age of 59 1/2 will be subject to a 10% additional tax penalty
unless the distribution is taken in a series of periodic distributions, for
life or life expectancy, or unless the distribution follows the death or
48
disability of the Contract Owner. Other exceptions may be available in certain
qualified plans. The 10% additional tax is in addition to any penalties that
may apply under your Contract and the normal income taxes due on the
distribution.
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 includable in the income of the
recipient as follows: (i) if distributed in a lump sum, they are taxed in the
same manner as a full surrender of the Contract; or (ii) if distributed under a
payment option, they are taxed in the same way as Annuity Payments.
TREATMENT OF CHARGES FOR CERTAIN ASSET ALLOCATION PROGRAMS
Under various asset allocation programs that may be made available to
participants in qualified employer retirement plans, note that based on our
understanding of the tax law, including various IRS rulings, we do not treat
charges for such programs that are paid from the Contract as taxable
distributions. Consult your own tax advisor.
TREATMENT OF CHARGES FOR OPTIONAL BENEFITS
The Contract may provide one or more optional enhanced death benefits or other
minimum guaranteed benefit that in some cases may exceed the greater of
purchase price or the Contract Value. It is possible that the Internal Revenue
Service may take the position that the charges for the optional enhanced
benefit(s) are deemed to be taxable distributions to you. Although we do not
believe that a charge under such optional enhanced benefit should be treated as
a taxable withdrawal, you should consult with your tax adviser before selecting
any rider or endorsement to the Contract.
OTHER TAX CONSIDERATIONS
- --------------------------------------------------------------------------------
PUERTO RICO TAX CONSIDERATIONS
The Puerto Rico Internal Revenue Code of 1994 (the "1994 Code") taxes
distributions from non-qualified annuity contracts differently than in the U.S.
Distributions that are not in the form of an annuity (including partial
surrenders and period certain payments) are treated under the 1994 Code first
as a return of investment. Therefore, a substantial portion of the amounts
distributed will generally be excluded from gross income for Puerto Rico tax
purposes until the cumulative amount paid exceeds your tax basis. The amount of
income on annuity distributions (payable over your lifetime) is also calculated
differently under the 1994 Code. Since Puerto Rico residents are also subject
to U.S. income tax on all income other than income sourced to Puerto Rico and
the Internal Revenue Service issued guidance in 2004 which indicated that the
income from an annuity contract issued by a U.S. life insurer would be
considered U.S. source income, the timing of recognition of income from an
annuity contract could vary between the two jurisdictions. Although the 1994
Code provides a credit against the Puerto Rico income tax for U.S. income taxes
paid, an individual may not get full credit because of the timing differences.
You should consult with a personal tax adviser regarding the tax consequences
of purchasing an annuity contract and/or any proposed distribution,
particularly a partial distribution or election to annuitize.
49
NON-RESIDENT ALIENS
Distributions to non-resident aliens ("NRAs") are subject to special and
complex tax and withholding rules under the Code with respect to U.S. source
income, some of which are based upon the particular facts and circumstances of
the Contract Owner, the beneficiary and the transaction itself. As stated
above, the IRS has taken the position that income from the Contract received by
NRAs is considered U.S. source income. In addition, Annuity Payments to NRAs in
many countries are exempt from U.S. tax (or subject to lower rates) based upon
a tax treaty, provided that the Contract Owner complies with the applicable
requirements. NRAs should seek guidance from a tax adviser regarding their
personal situation.
HURRICANE RELIEF
DISTRIBUTIONS
Your plan may provide for "qualified hurricane distributions" pursuant to the
Katrina Emergency Tax Relief Act of 2005 and the Gulf Opportunity Zone Act of
2005. Subject to an aggregate limit of $100,000 among all eligible retirement
plans, a participant's qualified hurricane distributions are not subject to the
10% early withdrawal penalty that might otherwise apply to a qualified annuity
under section 72(t).
To the extent a participant "repays" a qualified hurricane distribution by
contributing within three years of the distribution date to an eligible
retirement plan that accepts rollover contributions, it will generally be
treated as a timely direct trustee-to-trustee transfer and will not be subject
to income tax. To the extent a participant does not repay a qualified hurricane
distribution within three years, he or she will include the distribution in
gross income ratably over the three-tax year period, beginning with the tax
year in which the distribution is received, unless the participant elects to
opt out of three-year averaging by including the qualified hurricane
distribution in gross income for the year it is received. Consult your
independent tax advisor to determine if hurricane relief is available to Your
particular situation.
LOANS
Your plan may provide for increased limits and delayed repayment of participant
loans, where otherwise permitted by your plan, pursuant to the Katrina
Emergency Tax Relief Act of 2005 and the Gulf Opportunity Zone Act of 2005. An
eligible retirement plan other than an IRA may allow a plan loan to delay loan
repayment by certain individuals impacted by Hurricanes Katrina, Rita and
Wilma, whose principal places of abode on certain dates were located in
statutorily defined disaster areas and who sustained an economic loss due to
the hurricane. Generally, if the due date for any repayment with respect to
such loan occurs during a period beginning on September 23, 2005 (for purposes
of Hurricane Katrina) or October 23, 2005 (for purposes of Hurricanes Rita and
Wilma) and ending on December 31, 2006, then such due date may be delayed for
one year. Note: For purposes of these loan rules, an individual cannot be a
qualified individual with respect to more than one hurricane. Consult your
independent tax advisor to determine if hurricane relief is available to Your
particular situation.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
- --------------------------------------------------------------------------------
Under the Securities Act of 1933, the Company has filed with the Commission a
registration statement (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, and reference is hereby made to
such Registration Statement and exhibits for further information relating to
the Company and the Contracts.
50
The Company's latest annual report on Form 10-K for both The Travelers
Insurance Company and The Travelers Life and Annuity Company have been filed
with the Commission. It is incorporated by reference into this prospectus. The
Form 10-K for the period ended December 31, 2005 contains additional
information about the Company, including audited financial statements for the
Company's latest fiscal year. The Travelers Insurance Company filed its Form
10-K on March 31, 2006 via Edgar File No. 033-03094. The Travelers Life and
Annuity Company filed its Form 10-K on April 3, 2006 via EDGAR File
No. 033-58677. All other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Exchange Act (such as quarterly and periodic reports) or proxy
or information statements filed pursuant to Section 14 of the Exchange Act
since the end of the fiscal year ending December 31, 2005 are also incorporated
by reference into this Prospectus.
There have been no material changes in the Company's affairs which have
occurred since the end of the latest fiscal year for which audited financial
statements were included in the latest Form 10-K or which have not been
described in a Form 10-Q or Form 8-K filed by the Company under the Exchange
Act.
If requested, the Company will furnish, without charge, a copy of any and all
of the reports or documents that have been incorporated by reference into this
prospectus. You may direct your requests to the Company at P.O. Box 990009,
Hartford, CT 06199-0009, Attention: Annuity Operations and Services. The
telephone number is (800) 233-3591. You may also access the incorporated
reports and other documents at www.metlife.com.
You may also read and copy any materials that the Company files with the SEC at
the SEC's Public Reference Room at 100 F Street, N.E., Washington, DC 20549.
The public may obtain information on the operation of the Public Reference Room
by calling the SEC at 1-800-SEC-0330. The SEC maintains an Internet site that
contains reports, proxy and information statements, and other information
regarding issuers that file electronically with the SEC at (http://www.sec.gov).
OTHER INFORMATION
- --------------------------------------------------------------------------------
THE INSURANCE COMPANIES
Please refer to your Contract to determine which Company issued your Contract.
METLIFE INSURANCE COMPANY OF CONNECTICUT is a stock insurance company chartered
in 1863 in Connecticut and continuously engaged in the insurance business since
that time. It is licensed to conduct life insurance business in all states of
the United States, the District of Columbia, Puerto Rico, Guam, the U.S. and
British Virgin Islands and the Bahamas. The Company is a wholly-owned
subsidiary of MetLife, Inc., a publicly traded company. MetLife, Inc., through
its subsidiaries and affiliates, is a leading provider of insurance and other
financial services to individual and institutional customers. The Company's
Home Office is located at One Cityplace, Hartford, Connecticut 06103-3415.
METLIFE LIFE AND ANNUITY COMPANY OF CONNECTICUT 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
all states of the United States (except New York), the District of Columbia and
Puerto Rico. The Company is an indirect wholly-owned subsidiary of MetLife,
Inc., a publicly traded company. The Company's Home Office is located at One
Cityplace, Hartford, Connecticut 06103-3415.
51
FINANCIAL STATEMENTS
The financial statements for the Company are located in the Statement of
Additional Information.
DISTRIBUTION OF THE CONTRACTS
DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT. MetLife Insurance Company of
Connecticut and MetLife Life and Annuity Company of Connecticut (together the
"Company") have appointed MLI Distribution LLC ("MLIDLLC") (formerly Travelers
Distribution LLC) to serve as the principal underwriter and distributor of the
securities offered through this prospectus, pursuant to the terms of a
Distribution and Principal Underwriting Agreement. MLIDLLC, which is an
affiliate of the Company, also acts as the principal underwriter and
distributor of other variable annuity contracts and variable life insurance
policies issued by the Company and its affiliated companies. The Company
reimburses MLIDLLC for expenses MLIDLLC incurs in distributing the Contracts
(e.g., commissions payable to retail broker-dealers who sell the Contracts).
MLIDLLC does not retain any fees under the Contracts; however, MLIDLLC may
receive 12b-1 fees from the Underlying Funds.
MLIDLLC's principal executive offices are located at One Cityplace, Hartford,
Connecticut 06103. MLIDLLC is registered as a broker-dealer with the Securities
and Exchange Commission ("SEC") under the Securities Exchange Act of 1934, as
well as the securities commissions in the states in which it operates, and is a
member of the National Association of Securities Dealers, Inc. ("NASD").
MLIDLLC and the Company enter into selling agreements with affiliated and
unaffiliated broker-dealers who are registered with the SEC and are members of
the NASD, and with entities that may offer the Contracts but are exempt from
registration. Applications for the Contract are solicited by registered
representatives who are associated persons of such affiliated or unaffiliated
broker-dealer firms. Such representatives act as appointed agents of the
Company under applicable state insurance law and must be licensed to sell
variable insurance products. The Company intends to offer the Contract in all
jurisdictions where it is licensed to do business and where the Contract is
approved. The Company no longer offers the Contracts to new purchasers, but it
continues to accept purchase payments from existing Contract Owners.
COMPENSATION. Broker-dealers who have selling agreements with MLIDLLC and the
Company are paid compensation for the promotion and sale of the Contracts.
Registered representatives who solicit sales of the Contract typically receive
a portion of the compensation payable to the broker-dealer firm. The amount the
registered representative receives depends on the agreement between the firm
and the registered representative. This agreement may also provide for the
payment of other types of cash and non-cash compensation and other benefits. A
broker-dealer firm or registered representative of a firm may receive different
compensation for selling one product over another and/or may be inclined to
favor one product provider over another product provider due to differing
compensation rates.
We generally pay compensation as a percentage of purchase payments invested in
the Contract. Alternatively, we may pay lower compensation on purchase payments
but pay periodic asset-based compensation based on all or a portion of the
Contract Value. The amount and timing of compensation may vary depending on the
selling agreement but is not expected to exceed 7.50% of Purchase Payments (if
up-front compensation is paid to registered representatives) and up to 1.50%
annually of average Contract Value (if asset-based compensation is paid to
registered representatives).
The Company and MLIDLLC have also entered into preferred distribution
arrangements with certain broker-dealer firms. These arrangements are sometimes
called "shelf space" arrangements. Under these arrangements, the Company and
MLIDLLC pay separate, additional compensation to the broker-dealer firm for
services the broker-dealer provides in connection with the distribution of the
Company's products. These services may include providing the Company with
access to the distribution network of the broker-dealer, the hiring and
training of the broker-dealer's sales personnel, the sponsoring of conferences
and seminars by the broker-dealer, or general marketing services performed by
the broker-dealer. The broker-dealer may also provide other services or incur
other costs in connection with distributing the Company's products.
52
These preferred distribution arrangements will not be offered to all
broker-dealer firms and the terms of such arrangements may differ between
broker-dealer firms. Compensation payable under such arrangements may be based
on aggregate, net or anticipated sales of the Contracts, total assets
attributable to sales of the Contract by registered representatives of the
broker-dealer firm or based on the length of time that a Contract owner has
owned the Contract. Any such compensation payable to a broker-dealer firm will
be made by MLIDLLC or the Company out of their own assets and will not result
in any additional direct charge to you. Such compensation may cause the
broker-dealer firm and its registered representatives to favor the Company's
products. The Company and MLIDLLC have entered into preferred distribution
arrangements with their affiliate Tower Square Securities, Inc. and with the
unaffiliated broker-dealer firms identified in the Statement of Additional
Information. The Company and MLIDLLC may enter into similar arrangements with
their other affiliates Metropolitan Life Insurance Company, Walnut Street
Securities, Inc. and New England Securities Corporation. See the Statement of
Additional Information -- "DISTRIBUTION AND PRINCIPAL UNDERWRITING AGREEMENT"
for a list of the broker-dealer firms that received additional compensation
during 2005, as well as the range of additional compensation paid."
The Company and MLIDLLC have entered into selling agreements with certain
broker-dealer firms that have an affiliate that acts as investment adviser or
sub-adviser to one or more Underlying Funds which may be offered in the
Contracts. These investment advisory firms include Fidelity Management &
Research Company, Morgan Stanley Investment Advisers Inc., Merrill Lynch
Investment Managers, L.P., MetLife Investment Funds Management LLC, MetLife
Advisers, LLC and Met Investors Advisory LLC. MetLife Investment Funds
Management LLC, MetLife Advisers, LLC and MetLife Investors Advisory LLC are
affiliates of the Company. Registered representatives of broker-dealer firms
with an affiliated company acting as an adviser or a sub-adviser may favor
these Funds when offering the Contracts.
SALES OF THE CONTRACTS BY AFFILIATES OF THE COMPANY. The Company and MLIDLLC
may offer the Contracts through retail broker-dealer firms that are affiliates
of the Company, including Tower Square Securities, Inc., Metropolitan Life
Insurance Company, Walnut Street Securities, Inc. and New England Securities
Corporation. The compensation paid to affiliated broker-dealer firms for sales
of the Contracts is generally not expected to exceed, on a present value basis,
the percentages described above. These broker-dealer firms pay their registered
representatives all or a portion of the commissions received for their sales of
Contracts; some firms may retain a portion of commissions. The amount the
broker dealer firms pass on to their registered representatives is determined
in accordance with their internal compensation programs. These programs may
also include other types of cash compensation, such as bonuses, equity awards
(such as stock options), training allowances, supplementary salary, financing
arrangements, marketing support, medical and other insurance benefits,
retirement benefits, non-qualified deferred compensation plans and other
benefits. For registered representatives of certain affiliates, the amount of
this additional cash compensation is based primarily on the amount of
proprietary products sold and serviced by the representative. Proprietary
products are those issued by the Company or its affiliates. The managers who
supervise these registered representatives may also be entitled to additional
cash compensation based on the sale of proprietary products by their
representatives. Because the additional cash compensation paid to these
registered representatives and their managers is primarily based on sales of
proprietary products, these registered representatives and their managers have
an incentive to favor the sale of proprietary products over other products
issued by non-affiliates.
Registered representatives of our affiliate, Metropolitan Life Insurance
Company, receive cash payments for the products they sell and service based
upon a 'gross dealer concession' model. The cash payment is equal to a
percentage of the gross dealer concession. For MetLife registered
representatives other than those in our MetLife Resources (MLR) Division, the
percentage is determined by a formula that takes into consideration the amount
of premiums and purchase payments applied to proprietary products that the
registered representative sells and services. The percentage could be as high
as 100%. (MLR registered representatives receive compensation based upon
premiums and purchase payments applied to all products sold and serviced by the
representative.) In addition, all MetLife registered representative are
entitled to the additional compensation described above based
53
on sales of proprietary products. Because sales of proprietary products are a
factor determining the percentage of gross dealer concession and/or the amount
of additional compensation to which MetLife registered representatives are
entitled, they have an incentive to favor the sale of proprietary products. In
addition, because their sales managers' compensation is based on the sales made
by the representatives they supervise, these sales managers also have an
incentive to favor the sale of proprietary products.
The Company's affiliates also offer their registered representatives and their
managers non-cash compensation incentives, such as conferences, trips, prizes
and awards. Other non-cash compensation payments may be made for other services
that are not directly related to the sale of products. These payments may
include support services in the form of recruitment and training of personnel,
production of promotional materials and similar services.
We pay American Funds Distributors, Inc., principal underwriter for the
American Funds Insurance Series, a percentage of all premiums allocated to the
American Funds Global Small Capitalization Fund, the American Funds Growth
Fund, and the American Funds Growth-Income Fund for services it provides in
marketing the Fund's shares in connection with the Contract.
From time to time, MetLife Associates LLC (formerly, CitiStreet Associates LLC)
pays organizations, associations and nonprofit organizations compensation to
endorse or sponsor the Company's variable annuity contracts or for access to
the organization's members. This compensation may include: the payment of fees,
funding their programs, scholarships, events or awards, such as a principal of
the year award; leasing their office space or paying fees for display space at
their events; purchasing advertisements in their publications; or reimbursing
or defraying their expenses. We also retain finders and consultants to
introduce MetLife Associates LLC to potential clients and for establishing and
maintaining relationships between MetLife Associates LLC and various
organizations.
CONFORMITY WITH STATE AND FEDERAL LAWS
The laws of the state in which the Contract is issued 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. We will vote all shares, including
those we may own on our own behalf, and those where we have not received
instructions from Contract Owners, in the same proportion as shares for which
we received voting instructions. Should we determine that we are no longer
required to comply with the above, we will vote on the shares in our own right.
In certain limited circumstances, and when permitted by law, we may disregard
voting instructions. If we do disregard voting instructions, a summary of that
action and the reasons for such action would be included in the next annual
report to Contract Owners.
RESTRICTIONS ON FINANCIAL TRANSACTIONS
Federal laws designed to counter terrorism and prevent money laundering might,
in certain circumstances, require us to block a Contract Owner's ability to
make certain transactions and thereby refuse to accept any request for
transfers, withdrawals, surrenders, or death benefits, until the instructions
are received from the appropriate regulator. We may also be required to provide
additional information about you and your Contract to government regulators.
54
LEGAL PROCEEDINGS
In the ordinary course of business, the Company, similar to other life
insurance companies, is involved in lawsuits (including class action lawsuits),
arbitrations and other legal proceedings. Also, from time to time, state and
federal regulators or other officials conduct formal and informal examinations
or undertake other actions dealing with various aspects of the financial
services and insurance industries. In some legal proceedings involving
insurers, substantial damages have been sought and/or material settlement
payments have been made.
It is not possible to predict with certainty the ultimate outcome of any
pending legal proceeding or regulatory action. However, the Company does not
believe any such action or proceeding will have a material adverse effect upon
the Separate Account or upon the ability of MLI Distribution LLC to perform its
contract with the Separate Account or of the Company to meet its obligations
under the contracts.
55
APPENDIX A
CONDENSED FINANCIAL INFORMATION
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THE TRAVELERS SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES (IN DOLLARS)
The following Accumulation Unit Value ("AUV") information should be read in
conjunction with the Separate Account's audited financial statement and notes,
which are included in the Statement of Additional Information ("SAI"). The
first table provides the AUV information for the MINIMUM Separate Account
Charge available under the contract. The second table provides the AUV
information for the MAXIMUM Separate Account Charge available under the
contract. The Separate Account Charges that fall in between this range are
included in the SAI, which is free of charge. You may request a copy of the SAI
by calling the toll-free number found on the first page of this prospectus or
by mailing in the coupon attached in Appendix H. Please refer to the Fee Table
section of this prospectus for more information on Separate Account Charges.
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Capital Appreciation Fund (5/00) 2005 0.597 0.700 571,867
2004 0.503 0.597 286,860
2003 0.406 0.503 148,185
2002 0.547 0.406 213,843
2001 0.745 0.547 6,402
2000 1.000 0.745 --
High Yield Bond Trust (9/99).... 2005 1.530 1.538 117,330
2004 1.418 1.530 100,536
2003 1.107 1.418 27,244
2002 1.067 1.107 --
2001 0.982 1.067 --
2000 0.980 0.982 --
1999 1.000 0.980 --
Managed Assets Trust (6/99)..... 2005 1.206 1.243 107,946
2004 1.111 1.206 41,606
2003 0.918 1.111 25,510
2002 1.013 0.918 25,510
2001 1.076 1.013 25,510
2000 1.102 1.076 20,767
1999 1.000 1.102 13,609
Money Market Portfolio (9/99)... 2005 1.127 1.151 775,320
2004 1.125 1.127 236,987
2003 1.125 1.125 289,912
2002 1.119 1.125 264,365
2001 1.087 1.119 77,342
2000 1.032 1.087 76,073
1999 1.000 1.032 36,453
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
AIM Variable Insurance Funds
AIM V.I. Premier Equity Fund -- Series I (5/01)........ 2005 0.800 0.839 --
2004 0.763 0.800 --
2003 0.615 0.763 --
2002 0.888 0.615 --
2001 1.000 0.888 --
American Funds Insurance Series
Global Growth Fund -- Class 2 Shares (5/04)............ 2005 1.109 1.255 4,216
2004 1.000 1.109 --
Growth Fund -- Class 2 Shares (5/04)................... 2005 1.091 1.258 115,038
2004 1.000 1.091 14,605
Growth-Income Fund -- Class 2 Shares (5/04)............ 2005 1.082 1.136 77,329
2004 1.000 1.082 18,354
CitiStreet Funds, Inc.
CitiStreet Diversified Bond Fund -- Class I (9/99)..... 2005 1.360 1.377 1,482,566
2004 1.310 1.360 764,591
2003 1.251 1.310 481,357
2002 1.157 1.251 470,261
2001 1.092 1.157 --
2000 0.979 1.092 12,041
1999 1.000 0.979 37,502
CitiStreet International Stock Fund -- Class I (7/99).. 2005 1.024 1.165 484,883
2004 0.899 1.024 349,627
2003 0.697 0.899 291,178
2002 0.904 0.697 223,222
2001 1.160 0.904 --
2000 1.272 1.160 1,916
1999 1.000 1.272 6,933
CitiStreet Large Company Stock Fund -- Class I (9/99).. 2005 0.746 0.789 977,381
2004 0.683 0.746 656,590
2003 0.537 0.683 525,471
2002 0.702 0.537 430,013
2001 0.840 0.702 --
A-2
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
CitiStreet Large Company Stock Fund -- Class I (continued).. 2000 0.995 0.840 10,384
1999 1.000 0.995 21,459
CitiStreet Small Company Stock Fund--Class I (9/99)......... 2005 1.974 2.101 154,209
2004 1.732 1.974 107,116
2003 1.220 1.732 83,489
2002 1.612 1.220 66,192
2001 1.600 1.612 --
2000 1.465 1.600 1,472
1999 1.000 1.465 6,201
Credit Suisse Trust
Credit Suisse Trust Emerging Markets Portfolio (10/99)...... 2005 1.412 1.793 16,897
2004 1.140 1.412 11,251
2003 0.804 1.140 11,251
2002 0.916 0.804 11,251
2001 1.022 0.916 --
2000 1.506 1.022 --
1999 1.000 1.506 --
Delaware VIP Trust
Delaware VIP REIT Series -- Standard Class (9/00)........... 2005 2.368 2.517 74,750
2004 1.816 2.368 85,371
2003 1.366 1.816 31,398
2002 1.318 1.366 19,794
2001 1.221 1.318 --
2000 1.000 1.221 --
Delaware VIP Small Cap Value Series -- Standard
Class (10/99)............................................... 2005 2.050 2.225 83,441
2004 1.701 2.050 22,455
2003 1.208 1.701 22,455
2002 1.289 1.208 10,600
2001 1.162 1.289 --
2000 0.991 1.162 --
1999 1.000 0.991 --
A-3
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Dreyfus Variable Investment Fund
Dreyfus VIF -- Appreciation Portfolio -- Initial Shares (7/99).. 2005 0.992 1.027 181,885
2004 0.952 0.992 123,030
2003 0.792 0.952 42,639
2002 0.958 0.792 54,702
2001 1.065 0.958 27,197
2000 1.081 1.065 24,552
1999 1.000 1.081 24,552
Dreyfus VIF -- Developing Leaders Portfolio -- Initial
Shares (10/99).................................................. 2005 1.503 1.577 167,125
2004 1.360 1.503 102,644
2003 1.041 1.360 57,302
2002 1.298 1.041 58,130
2001 1.394 1.298 13,264
2000 1.240 1.394 3,246
1999 1.000 1.240 --
Franklin Templeton Variable Insurance Products Trust
Mutual Shares Securities Fund -- Class 2 Shares (5/03).......... 2005 1.345 1.475 --
2004 1.204 1.345 6,200
2003 1.000 1.204 6,200
Templeton Developing Markets Securities Fund -- Class 2
Shares (5/04)................................................... 2005 1.234 1.560 66,766
2004 1.000 1.234 --
Templeton Foreign Securities Fund -- Class 2 Shares (5/04)...... 2005 1.156 1.264 100,149
2004 1.000 1.156 19,656
Templeton Growth Securities Fund -- Class 2 Shares (5/04)....... 2005 1.126 1.216 247,616
2004 1.000 1.126 38,090
Greenwich Street Series Fund
Appreciation Portfolio (5/01)................................... 2005 1.029 1.065 53,220
2004 0.954 1.029 53,728
2003 0.772 0.954 45,111
A-4
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Appreciation Portfolio (continued)................... 2002 0.943 0.772 20,346
2001 1.000 0.943 3,353
Equity Index Portfolio -- Class II Shares (7/99)..... 2005 0.945 0.978 432,014
2004 0.864 0.945 140,723
2003 0.682 0.864 126,629
2002 0.886 0.682 47,426
2001 1.019 0.886 23,609
2000 1.133 1.019 14,389
1999 1.000 1.133 13,350
Fundamental Value Portfolio (5/01)................... 2005 1.065 1.107 85,744
2004 0.992 1.065 157,189
2003 0.722 0.992 157,189
2002 0.924 0.722 30,684
2001 1.000 0.924 --
Janus Aspen Series
Balanced Portfolio -- Service Shares (5/01).......... 2005 1.080 1.154 25,695
2004 1.005 1.080 25,695
2003 0.891 1.005 25,695
2002 0.962 0.891 --
2001 1.000 0.962 --
Mid Cap Growth Portfolio -- Service Shares (5/01).... 2005 0.880 0.978 85,976
2004 0.736 0.880 64,111
2003 0.551 0.736 5,302
2002 0.772 0.551 33,784
2001 1.000 0.772 --
Worldwide Growth Portfolio -- Service Shares (5/00).. 2005 0.577 0.604 5,661
2004 0.556 0.577 5,661
2003 0.453 0.556 5,661
2002 0.615 0.453 5,661
2001 0.801 0.615 5,661
2000 1.000 0.801 --
Lazard Retirement Series, Inc.
Lazard Retirement Small Cap Portfolio (5/04)......... 2005 1.127 1.162 7,320
2004 1.000 1.127 --
A-5
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Lord Abbett Series Fund, Inc.
Growth and Income Portfolio (5/04)............................ 2005 1.111 1.138 28,886
2004 1.000 1.111 --
Mid-Cap Value Portfolio (5/04)................................ 2005 1.165 1.251 --
2004 1.000 1.165 --
Metropolitan Series Fund
MetLife Aggressive Allocation Portfolio (1/05)................ 2005 1.000 1.000 --
MetLife Conservative Allocation Portfolio (1/05).............. 2005 1.000 1.000 --
MetLife Conservative to Moderate Allocation Portfolio (1/05).. 2005 1.000 1.000 --
MetLife Moderate Allocation Portfolio (1/05).................. 2005 1.000 1.000 --
MetLife Moderate to Aggressive Allocation Portfolio (1/05).... 2005 1.000 1.000 --
Oppenheimer Variable Account Funds
Oppenheimer Main Street Fund/VA -- Service Shares (5/04)...... 2005 1.078 1.131 --
2004 1.000 1.078 --
PIMCO Variable Insurance Trust
Real Return Portfolio -- Administrative Class (10/05)......... 2005 1.008 1.012 --
Total Return Portfolio -- Administrative Class (5/01)......... 2005 1.240 1.260 123,296
2004 1.192 1.240 152,147
2003 1.144 1.192 6,319
2002 1.057 1.144 7,538
2001 1.000 1.057 --
Putnam Variable Trust
Putnam VT Discovery Growth Fund -- Class IB Shares (5/01)..... 2005 0.789 0.839 --
2004 0.739 0.789 --
2003 0.564 0.739 --
2002 0.808 0.564 --
2001 1.000 0.808 --
A-6
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Putnam VT International Equity Fund -- Class IB
Shares (5/01)............................................. 2005 1.033 1.150 --
2004 0.897 1.033 6,667
2003 0.703 0.897 6,667
2002 0.861 0.703 --
2001 1.000 0.861 --
Putnam VT Small Cap Value Fund -- Class IB Shares (5/01).. 2005 1.647 1.749 77,457
2004 1.315 1.647 63,465
2003 0.886 1.315 43,406
2002 1.093 0.886 40,852
2001 1.000 1.093 --
Salomon Brothers Variable Series Funds Inc.
All Cap Fund -- Class I (4/00)............................ 2005 1.596 1.648 5,450
2004 1.486 1.596 5,450
2003 1.077 1.486 3,532
2002 1.449 1.077 --
2001 1.433 1.449 --
2000 1.000 1.433 --
Investors Fund -- Class I (10/99)......................... 2005 1.298 1.372 6,680
2004 1.185 1.298 6,680
2003 0.903 1.185 --
2002 1.183 0.903 6,424
2001 1.244 1.183 --
2000 1.088 1.244 --
1999 1.000 1.088 13,535
Small Cap Growth Fund -- Class I (5/01)................... 2005 1.064 1.107 5,985
2004 0.932 1.064 --
2003 0.631 0.932 --
2002 0.974 0.631 --
2001 1.000 0.974 --
Total Return Fund -- Class I (9/00)....................... 2005 1.209 1.239 --
2004 1.121 1.209 --
2003 0.975 1.121 --
2002 1.055 0.975 --
2001 1.072 1.055 --
2000 1.000 1.072 --
A-7
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Smith Barney Investment Series
Smith Barney Dividend Strategy Portfolio (5/01).. 2005 0.828 0.819 6,455
2004 0.807 0.828 6,455
2003 0.659 0.807 6,455
2002 0.897 0.659 --
2001 1.000 0.897 --
Smith Barney Premier Selections All Cap Growth
Portfolio (5/01)................................. 2005 0.887 0.935 --
2004 0.869 0.887 --
2003 0.652 0.869 --
2002 0.898 0.652 --
2001 1.000 0.898 --
The Travelers Series Trust
AIM Capital Appreciation Portfolio (5/01)........ 2005 0.887 0.957 6,755
2004 0.840 0.887 6,755
2003 0.654 0.840 --
2002 0.867 0.654 --
2001 1.000 0.867 --
Convertible Securities Portfolio (5/04).......... 2005 1.040 1.035 --
2004 1.000 1.040 --
Disciplined Mid Cap Stock Portfolio (8/99)....... 2005 1.625 1.812 44,834
2004 1.406 1.625 46,180
2003 1.060 1.406 38,942
2002 1.247 1.060 22,864
2001 1.310 1.247 4,950
2000 1.132 1.310 4,950
1999 1.000 1.132 4,950
Equity Income Portfolio (7/99)................... 2005 1.240 1.285 484,509
2004 1.137 1.240 294,106
2003 0.874 1.137 192,847
2002 1.024 0.874 151,978
2001 1.105 1.024 109,815
2000 1.021 1.105 12,381
1999 1.000 1.021 12,381
A-8
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Federated Stock Portfolio (11/01)........ 2005 1.113 1.163 4,216
2004 1.015 1.113 4,216
2003 0.802 1.015 4,216
2002 1.002 0.802 4,216
2001 1.000 1.002 --
Large Cap Portfolio (7/99)............... 2005 0.852 0.919 99,935
2004 0.807 0.852 111,168
2003 0.652 0.807 96,847
2002 0.851 0.652 96,847
2001 1.038 0.851 96,847
2000 1.224 1.038 52,127
1999 1.000 1.224 12,719
Mercury Large Cap Core Portfolio (6/00).. 2005 0.897 0.997 --
2004 0.780 0.897 --
2003 0.649 0.780 --
2002 0.874 0.649 --
2001 1.136 0.874 --
2000 1.000 1.136 --
MFS(R) Emerging Growth Portfolio (5/01).. 2005 0.761 0.739 --
2004 0.681 0.761 --
2003 0.531 0.681 --
2002 0.814 0.531 --
2001 1.000 0.814 --
MFS(R) Mid Cap Growth Portfolio (10/99).. 2005 1.029 1.052 57,026
2004 0.909 1.029 59,981
2003 0.668 0.909 47,678
2002 1.317 0.668 45,675
2001 1.739 1.317 33,694
2000 1.603 1.739 30,494
1999 1.000 1.603 --
MFS(R) Total Return Portfolio (7/99)..... 2005 1.371 1.400 659,159
2004 1.240 1.371 337,809
2003 1.073 1.240 153,776
2002 1.141 1.073 135,391
2001 1.150 1.141 53,295
A-9
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MFS(R) Total Return Portfolio (continued).............. 2000 0.994 1.150 --
1999 1.000 0.994 --
MFS(R) Value Portfolio (5/04).......................... 2005 1.127 1.190 142,445
2004 1.000 1.127 21,046
Mondrian International Stock Portfolio (8/99).......... 2005 0.971 1.055 6,318
2004 0.846 0.971 6,318
2003 0.663 0.846 6,318
2002 0.768 0.663 6,318
2001 1.049 0.768 4,591
2000 1.194 1.049 4,591
1999 1.000 1.194 4,591
Pioneer Fund Portfolio (8/99).......................... 2005 0.847 0.890 36,743
2004 0.768 0.847 18,862
2003 0.625 0.768 31,058
2002 0.903 0.625 24,128
2001 1.183 0.903 --
2000 0.959 1.183 --
1999 1.000 0.959 --
Pioneer Mid Cap Value Portfolio (1/05)................. 2005 1.000 1.001 --
Pioneer Strategic Income Portfolio (1/01).............. 2005 1.415 1.455 143,490
2004 1.285 1.415 32,760
2003 1.084 1.285 32,760
2002 1.032 1.084 27,083
2001 1.000 1.032 --
Strategic Equity Portfolio (7/99)...................... 2005 0.861 0.871 70,166
2004 0.787 0.861 81,278
2003 0.598 0.787 67,954
2002 0.908 0.598 67,954
2001 1.057 0.908 67,954
2000 1.303 1.057 56,806
1999 1.000 1.303 17,222
Style Focus Series: Small Cap Growth Portfolio (1/05).. 2005 1.000 1.000 --
A-10
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Style Focus Series: Small Cap Value Portfolio (1/05)......... 2005 1.000 1.000 --
Travelers Quality Bond Portfolio (8/99)...................... 2005 1.290 1.300 39,391
2004 1.259 1.290 40,044
2003 1.186 1.259 36,759
2002 1.130 1.186 19,941
2001 1.063 1.130 19,941
2000 1.002 1.063 19,941
1999 1.000 1.002 19,941
U.S. Government Securities Portfolio (8/99).................. 2005 1.396 1.445 480,652
2004 1.326 1.396 357,708
2003 1.301 1.326 328,667
2002 1.154 1.301 366,169
2001 1.099 1.154 20,423
2000 0.968 1.099 20,423
1999 1.000 0.968 20,423
Travelers Series Fund Inc.
SB Adjustable Rate Income Portfolio--Class I Shares (9/03)... 2005 1.005 1.020 --
2004 1.001 1.005 1,000
2003 1.000 1.001 1,000
Smith Barney Aggressive Growth Portfolio (5/01).............. 2005 0.923 1.022 319,390
2004 0.846 0.923 328,219
2003 0.634 0.846 251,625
2002 0.949 0.634 15,408
2001 1.000 0.949 2,646
Smith Barney High Income Portfolio (8/99).................... 2005 1.166 1.187 61,681
2004 1.065 1.166 63,799
2003 0.842 1.065 22,349
2002 0.877 0.842 20,231
2001 0.918 0.877 20,231
2000 1.007 0.918 20,231
1999 1.000 1.007 20,231
Smith Barney International All Cap Growth Portfolio (12/99).. 2005 0.883 0.978 17,480
2004 0.755 0.883 39,904
A-11
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Smith Barney International All Cap Growth
Portfolio (continued)....................................... 2003 0.597 0.755 3,291
2002 0.810 0.597 3,291
2001 1.186 0.810 3,291
2000 1.569 1.186 3,291
1999 1.000 1.569 --
Smith Barney Large Capitalization Growth Portfolio (10/99).. 2005 0.987 1.030 53,253
2004 0.991 0.987 40,912
2003 0.677 0.991 5,766
2002 0.907 0.677 --
2001 1.045 0.907 --
2000 1.132 1.045 --
1999 1.000 1.132 --
Social Awareness Stock Portfolio (7/99)..................... 2005 0.925 0.957 18,473
2004 0.877 0.925 18,473
2003 0.686 0.877 18,473
2002 0.921 0.686 14,167
2001 1.100 0.921 14,167
2000 1.115 1.100 14,167
1999 1.000 1.115 14,167
Van Kampen Life Investment Trust
Comstock Portfolio -- Class II Shares (5/03)................ 2005 1.464 1.512 14,254
2004 1.257 1.464 --
2003 1.000 1.257 --
Emerging Growth Portfolio -- Class II Shares (5/01)......... 2005 0.729 0.778 --
2004 0.688 0.729 --
2003 0.546 0.688 --
2002 0.817 0.546 --
2001 1.000 0.817 --
Enterprise Portfolio -- Class II Shares (5/01).............. 2005 0.817 0.875 --
2004 0.794 0.817 --
2003 0.637 0.794 --
2002 0.911 0.637 --
2001 1.000 0.911 --
A-12
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Variable Annuity Portfolios
Smith Barney Small Cap Growth Opportunities
Portfolio (5/01)................................... 2005 1.130 1.176 13,085
2004 0.986 1.130 29,945
2003 0.700 0.986 --
2002 0.949 0.700 --
2001 1.000 0.949 --
Variable Insurance Products Fund
Asset Manager Portfolio -- Service Class 2 (5/00).. 2005 0.990 1.019 --
2004 0.949 0.990 23,009
2003 0.813 0.949 23,009
2002 0.900 0.813 51,769
2001 0.949 0.900 --
2000 1.000 0.949 --
Contrafund<<Portfolio -- Service Class 2 (5/01).... 2005 1.238 1.432 138,871
2004 1.083 1.238 124,888
2003 0.852 1.083 75,992
2002 0.950 0.852 14,509
2001 1.000 0.950 --
Dynamic Capital Appreciation Portfolio -- Service
Class 2 (5/01)..................................... 2005 0.966 1.157 9,176
2004 0.962 0.966 12,814
2003 0.776 0.962 12,814
2002 0.846 0.776 12,814
2001 1.000 0.846 2,853
Mid Cap Portfolio -- Service Class 2 (5/01)........ 2005 1.563 1.830 246,839
2004 1.264 1.563 92,254
2003 0.921 1.264 47,487
2002 1.032 0.921 9,533
2001 1.000 1.032 --
Wells Fargo Variable Trust
Wells Fargo Advantage Multi Cap Value Fund (3/00).. 2005 1.175 1.358 8,864
2004 1.014 1.175 8,864
2003 0.739 1.014 8,864
2002 0.969 0.739 8,864
A-13
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Wells Fargo Advantage Multi Cap Value Fund (continued).. 2001 0.938 0.969 --
2000 1.000 0.938 --
A-14
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.25% 140 FL
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Greenwich Street Series Fund
Equity Index Portfolio -- Class II Shares (7/99).. 2005 0.850 0.862 --
2004 0.791 0.850 --
2003 0.636 0.791 --
2002 0.841 0.636 --
2001 0.986 0.841 --
2000 1.117 0.986 --
1999 1.000 1.117 --
NOTES
The date next to each funding option's name reflects the date money first came
into the funding option through the Separate Account.
Funding options not listed above had no amount allocated to them or where not
available as of December 31, 2005.
"Number of Units outstanding at the end of the period" may include units for
Contracts Owners in payout phase, where appropriate.
If a accumulate unit value has no assets and units across all sub-accounts
within the Separate Account, and has had no assets and units for the history
displayed on the Condensed Financial Information in the past, then it may not
be displayed.
Effective 04/18/2005: Lazard International Stock Portfolio changed its name to
Mondrian International Stock Portfolio.
Effective 04/18/2005: Merrill Lynch Large Cap Core Portfolio changed its name
to Mercury Large Cap Core Portfolio.
Effective 04/11/2005: Strong Multi Cap Value Fund II changed its name to Wells
Fargo Advantage Multi Cap Value Fund.
On 02/25/2005, The Travelers Series Trust: MFS(R)(R) Emerging Growth Portfolio
was merged into the Traveler Series Trust: MFS(R)(R) Mid Cap Growth Portfolio,
and is no longer available as a funding option.
On 02/25/2005, The AIM Equity Fund, Inc.: AIM Constellation Fund -- Class A was
replaced by the Travelers Series Trust: AIM Capital Appreciation Portfolio, and
is no longer available as a funding option.
On 02/25/2005, the Fidelity Advisor Series I: Advisor growth Opportunities Fund
- -- Class T was replaced by the Greenwich Street Series Fund: Appreciation
Portfolio, and is no longer available as a funding option.
A-15
On 02/25/2005, The AIM Equity Fund, Inc: AIM Charter Fund -- Class A was
replaced by the Greenwich Street Series Fund: Appreciation Portfolio, and is no
longer available as a funding option.
On 02/25/2005, The Dreyfus/Laurel Funds, Inc: Dreyfus Disciplined Stock Fund
was replaced by the Greenwich Street Series Fund: Equity Index Portfolio --
Class II Shares, and is no longer available as a funding option.
A-16
NOTES (CONTINUED)
On 02/25/2005, The Neuberger Berman Equity Assets: Neuberger Berman Guardian
Fund Advisor Class was replaced by the American Funds Insurance Series: Growth
- -- Income Fund -- Class 2 Shares, and is no longer available as a funding
option.
On 02/25/2005. the PBHG Funds: PBHG Growth Fund -- Advisor Class was replaced
by the Janus Aspen Series: Mid Cap Growth Portfolio -- Service Shares, and is
no longer available as a funding option.
On 02/25/2005. the Greenwich Street Series Funds: Diversified Strategic Income
Portfolio was replaced by the Travelers Series Trust: Pioneer Strategic Income
Portfolio, and is no longer available as a funding option.
On 02/25/2005. the Smith Barney Equity Funds: Smith Barney Social Awareness
Fund -- Class A was replaced by the Travelers Series Fund, Inc: Social
Awareness Stock Portfolio, and is no longer available as a funding option.
On 02/25/2005. the Dreyfus A Bonds Plus, Inc: Dreyfus A Bonds Plus, Inc was
replaced by the Travelers Series Trust: U.S. Government Securities Portfolio,
and is no longer available as a funding option.
AIM Variable Insurance Funds, Inc. : AIM Premier Equity Fund -- Series I is no
longer available to new contract owners.
Credit Suisse Trust: Emerging Markets Portfolio is no longer available to new
contract owners
Variable Insurance Products Fund III: Dynamic Capital Appreciation Portfolio --
Service Class 2 -- is no longer available to new contract owners
The Travelers Series Trust: Federated Stock Portfolio is no longer available to
new contract owners
Janus Aspen Series: Balanced Portfolio -- Service Shares -- is no longer
available to new contract owners
Janus Aspen Series: World Wide Growth Portfolio -- Service Shares is no longer
available to new contract holders.
Putnam Variable Trust: Putnam VT Discovery Growth Fund -- Class IB Share is no
longer available to new contract owners
Putnam Variable Trust: Putnam VT International Equity Fund -- Class IB Shares
is no longer available to new contract holders.
Salomon Brothers Variable Series Funds Inc.: Total Return Fund -- Class I is no
longer available to new contract holders.
Smith Barney Investment Series: Smith Barney Dividend Strategy Portfolio is no
longer available to new contract owners
Greenwich Street Series Fund: Fundamental Value Portfolio is no longer
available to new contract holders.
Travelers Series Fund Inc.: Smith Barney International All Cap Growth Portfolio
is no longer available to new contract owners
Strong Variable insurance Funds, Inc. : Strong Multi Cap Value Fund II is no
longer available to new contract owners.
Van Kampen Life Investment Trust: Enterprise Portfolio -- Class II Shares is no
longer available to new contract holders.
A-17
Fidelity VIP Asset Manager Portfolio- Service Class 2 is no longer available to
new contract owners.
Salomon Brothers Variable Small Cap Growth Fund -- Class I is no longer
available to new contract owners.
Smith Barney Premier Selections All Cap Growth Portfolio is no longer available
to new contract owners.
A-18
NOTES (CONTINUED)
Van Kampen Emerging Growth Portfolio -- Class 2 shares is no longer available
to new contract owners.
A-19
APPENDIX B
CONDENSED FINANCIAL INFORMATION
- --------------------------------------------------------------------------------
THE TRAVELERS SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES
ACCUMULATION UNIT VALUES (IN DOLLARS)
The following Accumulation Unit Value ("AUV") information should be read in
conjunction with the Separate Account's audited financial statement and notes,
which are included in the Statement of Additional Information ("SAI"). The
first table provides the AUV information for the MINIMUM Separate Account
Charge available under the contract. The second table provides the AUV
information for the MAXIMUM Separate Account Charge available under the
contract. The Separate Account Charges that fall in between this range are
included in the SAI, which is free of charge. You may request a copy of the SAI
by calling the toll-free number found on the first page of this prospectus or
by mailing in the coupon attached in Appendix H. Please refer to the Fee Table
section of this prospectus for more information on Separate Account Charges.
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Capital Appreciation Fund (5/00) 2005 0.597 0.700 1,713,108
2004 0.503 0.597 1,555,826
2003 0.406 0.503 1,630,081
2002 0.547 0.406 1,837,286
2001 0.745 0.547 1,046,590
2000 1.000 0.745 1,006,482
High Yield Bond Trust (5/99).... 2005 1.530 1.538 359,521
2004 1.418 1.530 368,425
2003 1.107 1.418 381,556
2002 1.067 1.107 411,756
2001 0.982 1.067 314,101
2000 0.980 0.982 101,750
1999 1.000 0.980 92,789
Managed Assets Trust (3/99)..... 2005 1.206 1.243 979,865
2004 1.111 1.206 946,294
2003 0.918 1.111 968,180
2002 1.013 0.918 1,042,680
2001 1.076 1.013 1,174,637
2000 1.102 1.076 913,007
1999 1.000 1.102 232,345
Money Market Portfolio (4/99) 2005 1.127 1.151 847,943
2004 1.125 1.127 1,106,052
2003 1.125 1.125 1,753,058
2002 1.119 1.125 1,258,377
2001 1.087 1.119 990,283
2000 1.032 1.087 700,403
1999 1.000 1.032 239,890
B-1
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
AIM Variable Insurance Funds
AIM V.I. Premier Equity Fund -- Series I (7/01)........ 2005 0.800 0.839 --
2004 0.763 0.800 103,702
2003 0.615 0.763 103,682
2002 0.888 0.615 55,895
2001 1.000 0.888 --
American Funds Insurance Series
Global Growth Fund -- Class 2 Shares (5/04)............ 2005 1.109 1.255 119,722
2004 1.010 1.109 31,153
Growth Fund -- Class 2 Shares (5/04)................... 2005 1.091 1.258 157,801
2004 0.970 1.091 16,521
Growth-Income Fund -- Class 2 Shares (5/04)............ 2005 1.082 1.136 385,501
2004 0.979 1.082 104,915
CitiStreet Funds, Inc.
CitiStreet Diversified Bond Fund -- Class I (3/99)..... 2005 1.360 1.377 4,657,584
2004 1.310 1.360 4,115,266
2003 1.251 1.310 3,142,575
2002 1.157 1.251 3,360,816
2001 1.092 1.157 2,080,975
2000 0.979 1.092 601,543
1999 1.000 0.979 139,623
CitiStreet International Stock Fund -- Class I (3/99).. 2005 1.024 1.165 2,279,498
2004 0.899 1.024 2,148,904
2003 0.697 0.899 2,010,293
2002 0.904 0.697 2,025,194
2001 1.160 0.904 1,238,125
2000 1.272 1.160 474,746
1999 1.000 1.272 90,221
CitiStreet Large Company Stock Fund -- Class I (3/99).. 2005 0.746 0.789 4,775,451
2004 0.683 0.746 4,498,084
2003 0.537 0.683 4,110,325
2002 0.702 0.537 3,575,681
2001 0.840 0.702 2,080,499
B-2
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
CitiStreet Large Company Stock Fund -- Class I (continued).. 2000 0.995 0.840 959,029
1999 1.000 0.995 228,230
CitiStreet Small Company Stock Fund -- Class I (3/99)....... 2005 1.974 2.101 940,105
2004 1.732 1.974 879,208
2003 1.220 1.732 844,568
2002 1.612 1.220 739,822
2001 1.600 1.612 542,731
2000 1.465 1.600 462,418
1999 1.000 1.465 113,574
Credit Suisse Trust
Credit Suisse Trust Emerging Markets Portfolio (5/99)....... 2005 1.412 1.793 35,759
2004 1.140 1.412 44,528
2003 0.804 1.140 46,418
2002 0.916 0.804 45,812
2001 1.022 0.916 54,766
2000 1.506 1.022 71,391
1999 1.000 1.506 54,662
Delaware VIP Trust
Delaware VIP REIT Series -- Standard Class (7/99)........... 2005 2.368 2.517 312,481
2004 1.816 2.368 330,738
2003 1.366 1.816 282,138
2002 1.318 1.366 242,450
2001 1.221 1.318 128,487
2000 0.937 1.221 102,023
1999 1.000 0.937 --
Delaware VIP Small Cap Value Series -- Standard
Class (4/99)................................................ 2005 2.050 2.225 232,445
2004 1.701 2.050 203,692
2003 1.208 1.701 177,208
2002 1.289 1.208 139,177
2001 1.162 1.289 13,468
2000 0.991 1.162 5,110
1999 1.000 0.991 --
B-3
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Dreyfus Variable Investment Fund
Dreyfus VIF -- Appreciation Portfolio -- Initial Shares (3/99).. 2005 0.992 1.027 318,098
2004 0.952 0.992 330,399
2003 0.792 0.952 331,736
2002 0.958 0.792 356,023
2001 1.065 0.958 396,091
2000 1.081 1.065 311,873
1999 1.000 1.081 244,529
Dreyfus VIF -- Developing Leaders Portfolio --
Initial Shares (4/99)........................................... 2005 1.503 1.577 463,289
2004 1.360 1.503 619,182
2003 1.041 1.360 589,418
2002 1.298 1.041 540,784
2001 1.394 1.298 388,047
2000 1.240 1.394 305,761
1999 1.000 1.240 45,091
Franklin Templeton Variable Insurance Products Trust
Mutual Shares Securities Fund -- Class 2 Shares (8/03).......... 2005 1.345 1.475 61,250
2004 1.204 1.345 23,498
2003 1.000 1.204 17,090
Templeton Developing Markets Securities Fund --.................
Class 2 Shares (6/04)........................................... 2005 1.234 1.560 102,975
2004 0.972 1.234 --
Templeton Foreign Securities Fund -- Class 2 Shares (5/04)...... 2005 1.156 1.264 193,399
2004 0.962 1.156 40,991
Templeton Growth Securities Fund -- Class 2 Shares (6/04)....... 2005 1.126 1.216 196,213
2004 1.021 1.126 57,703
Greenwich Street Series Fund
Appreciation Portfolio (8/01)................................... 2005 1.029 1.065 264,932
2004 0.954 1.029 162,864
2003 0.772 0.954 100,091
B-4
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Appreciation Portfolio (continued)................... 2002 0.943 0.772 82,395
2001 1.000 0.943 14,712
Equity Index Portfolio -- Class II Shares (3/99)..... 2005 0.945 0.978 1,770,764
2004 0.864 0.945 1,899,361
2003 0.682 0.864 1,719,505
2002 0.886 0.682 1,579,821
2001 1.019 0.886 1,055,882
2000 1.133 1.019 842,129
1999 1.000 1.133 207,054
Fundamental Value Portfolio (5/01)................... 2005 1.065 1.107 584,303
2004 0.992 1.065 630,507
2003 0.722 0.992 637,061
2002 0.924 0.722 486,577
2001 1.000 0.924 106,535
Janus Aspen Series
Balanced Portfolio -- Service Shares (5/01).......... 2005 1.080 1.154 157,215
2004 1.005 1.080 157,215
2003 0.891 1.005 123,022
2002 0.962 0.891 83,565
2001 1.000 0.962 --
Mid Cap Growth Portfolio -- Service Shares (8/01).... 2005 0.880 0.978 23,960
2004 0.736 0.880 --
2003 0.551 0.736 --
2002 0.772 0.551 --
2001 1.000 0.772 --
Worldwide Growth Portfolio -- Service Shares (5/00).. 2005 0.577 0.604 254,343
2004 0.556 0.577 303,997
2003 0.453 0.556 319,311
2002 0.615 0.453 382,579
2001 0.801 0.615 441,531
2000 1.000 0.801 424,750
Lazard Retirement Series, Inc.
Lazard Retirement Small Cap Portfolio (5/04)......... 2005 1.127 1.162 3,023
2004 1.009 1.127 --
B-5
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Lord Abbett Series Fund, Inc.
Growth and Income Portfolio (5/04)............................ 2005 1.111 1.138 87,476
2004 0.968 1.111 --
Mid-Cap Value Portfolio (7/04)................................ 2005 1.165 1.251 97,239
2004 1.007 1.165 34,410
Metropolitan Series Fund
MetLife Aggressive Allocation Portfolio (1/05)................ 2005 1.000 1.000 --
MetLife Conservative Allocation Portfolio (1/05).............. 2005 1.000 1.000 --
MetLife Conservative to Moderate Allocation Portfolio (1/05).. 2005 1.000 1.000 --
MetLife Moderate Allocation Portfolio (1/05).................. 2005 1.000 1.000 --
MetLife Moderate to Aggressive Allocation Portfolio (1/05).... 2005 1.000 1.000 --
Oppenheimer Variable Account Funds
Oppenheimer Main Street Fund/VA -- Service Shares (5/04)...... 2005 1.078 1.131 14,297
2004 0.975 1.078 10,342
PIMCO Variable Insurance Trust
Real Return Portfolio -- Administrative Class (7/05).......... 2005 1.000 1.012 42,479
Total Return Portfolio -- Administrative Class (6/01)......... 2005 1.240 1.260 569,639
2004 1.192 1.240 378,880
2003 1.144 1.192 385,107
2002 1.057 1.144 388,046
2001 1.000 1.057 42,621
Putnam Variable Trust
Putnam VT Discovery Growth Fund --
Class IB Shares (12/01)....................................... 2005 0.789 0.839 11,671
2004 0.739 0.789 11,671
2003 0.564 0.739 11,671
2002 0.808 0.564 11,671
2001 1.000 0.808 --
B-6
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Putnam VT International Equity Fund --
Class IB Shares (5/01).................................... 2005 1.033 1.150 81,614
2004 0.897 1.033 85,063
2003 0.703 0.897 88,330
2002 0.861 0.703 89,130
2001 1.000 0.861 36,530
Putnam VT Small Cap Value Fund -- Class IB Shares (6/01).. 2005 1.647 1.749 319,412
2004 1.315 1.647 205,632
2003 0.886 1.315 173,137
2002 1.093 0.886 235,414
2001 1.000 1.093 1,734
Salomon Brothers Variable Series Funds Inc.
All Cap Fund -- Class I (3/99)............................ 2005 1.596 1.648 338,497
2004 1.486 1.596 344,257
2003 1.077 1.486 357,262
2002 1.449 1.077 340,827
2001 1.433 1.449 172,311
2000 1.222 1.433 70,934
1999 1.000 1.222 13,279
Investors Fund -- Class I (3/99).......................... 2005 1.298 1.372 128,604
2004 1.185 1.298 149,763
2003 0.903 1.185 151,723
2002 1.183 0.903 140,603
2001 1.244 1.183 102,276
2000 1.088 1.244 20,655
1999 1.000 1.088 5,119
Small Cap Growth Fund -- Class I (6/01)................... 2005 1.064 1.107 5,596
2004 0.932 1.064 --
2003 0.631 0.932 --
2002 0.974 0.631 --
2001 1.000 0.974 997
Total Return Fund -- Class I (3/99)....................... 2005 1.209 1.239 23,410
2004 1.121 1.209 29,201
2003 0.975 1.121 13,990
2002 1.055 0.975 10,605
2001 1.072 1.055 7,423
B-7
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Total Return Fund -- Class I (continued)......... 2000 1.002 1.072 5,470
1999 1.000 1.002 --
Smith Barney Investment Series
Smith Barney Dividend Strategy Portfolio (5/01).. 2005 0.828 0.819 23,093
2004 0.807 0.828 23,093
2003 0.659 0.807 20,096
2002 0.897 0.659 20,096
2001 1.000 0.897 20,096
Smith Barney Premier Selections All Cap Growth
Portfolio (6/01)................................. 2005 0.887 0.935 2,816
2004 0.869 0.887 2,816
2003 0.652 0.869 --
2002 0.898 0.652 --
2001 1.000 0.898 --
The Travelers Series Trust
AIM Capital Appreciation Portfolio (11/01)....... 2005 0.887 0.957 51,831
2004 0.840 0.887 72,426
2003 0.654 0.840 35,106
2002 0.867 0.654 38,688
2001 1.000 0.867 --
Convertible Securities Portfolio (5/04).......... 2005 1.040 1.035 5,612
2004 0.990 1.040 --
Disciplined Mid Cap Stock Portfolio (6/99)....... 2005 1.625 1.812 288,657
2004 1.406 1.625 300,148
2003 1.060 1.406 298,395
2002 1.247 1.060 244,570
2001 1.310 1.247 156,409
2000 1.132 1.310 87,378
1999 1.000 1.132 --
Equity Income Portfolio (3/99)................... 2005 1.240 1.285 1,344,215
2004 1.137 1.240 1,226,765
2003 0.874 1.137 1,133,992
2002 1.024 0.874 1,011,873
2001 1.105 1.024 343,935
B-8
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Equity Income Portfolio (continued)......... 2000 1.021 1.105 212,588
1999 1.000 1.021 216,322
Federated Stock Portfolio (4/99)............ 2005 1.113 1.163 59,781
2004 1.015 1.113 60,043
2003 0.802 1.015 60,043
2002 1.002 0.802 52,941
2001 0.993 1.002 24,072
2000 0.965 0.993 4,126
1999 1.000 0.965 --
Large Cap Portfolio (3/99).................. 2005 0.852 0.919 512,059
2004 0.807 0.852 512,693
2003 0.652 0.807 524,562
2002 0.851 0.652 448,487
2001 1.038 0.851 409,069
2000 1.224 1.038 334,348
1999 1.000 1.224 247,021
Mercury Large Cap Core Portfolio (3/99)..... 2005 0.897 0.997 49,017
2004 0.780 0.897 15,265
2003 0.649 0.780 15,265
2002 0.874 0.649 16,447
2001 1.136 0.874 17,029
2000 1.213 1.136 80,150
1999 1.000 1.213 --
MFS(R)(R) Emerging Growth Portfolio (8/01).. 2005 0.761 0.739 --
2004 0.681 0.761 --
2003 0.531 0.681 --
2002 0.814 0.531 --
2001 1.000 0.814 --
MFS(R)(R) Mid Cap Growth Portfolio (5/99)... 2005 1.029 1.052 189,859
2004 0.909 1.029 247,955
2003 0.668 0.909 256,356
2002 1.317 0.668 249,539
2001 1.739 1.317 238,188
2000 1.603 1.739 201,277
1999 1.000 1.603 22,378
B-9
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
MFS(R)(R) Total Return Portfolio (4/99)........ 2005 1.371 1.400 1,402,006
2004 1.240 1.371 1,303,774
2003 1.073 1.240 1,112,494
2002 1.141 1.073 994,730
2001 1.150 1.141 458,197
2000 0.994 1.150 177,102
1999 1.000 0.994 56,338
MFS(R)(R) Value Portfolio (5/04)............... 2005 1.127 1.190 25,099
2004 0.969 1.127 --
Mondrian International Stock Portfolio (4/99).. 2005 0.971 1.055 80,241
2004 0.846 0.971 81,385
2003 0.663 0.846 57,438
2002 0.768 0.663 39,307
2001 1.049 0.768 43,074
2000 1.194 1.049 43,159
1999 1.000 1.194 13,922
Pioneer Fund Portfolio (5/99).................. 2005 0.847 0.890 62,738
2004 0.768 0.847 128,011
2003 0.625 0.768 139,015
2002 0.903 0.625 177,705
2001 1.183 0.903 175,971
2000 0.959 1.183 136,065
1999 1.000 0.959 52,624
Pioneer Mid Cap Value Portfolio (7/05)......... 2005 1.000 1.001 --
Pioneer Strategic Income Portfolio (6/99)...... 2005 1.415 1.455 99,903
2004 1.285 1.415 48,519
2003 1.084 1.285 37,669
2002 1.032 1.084 29,999
2001 0.998 1.032 17,469
2000 1.010 0.998 --
1999 1.000 1.010 --
Strategic Equity Portfolio (3/99).............. 2005 0.861 0.871 578,902
2004 0.787 0.861 781,329
2003 0.598 0.787 861,404
2002 0.908 0.598 907,697
B-10
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Strategic Equity Portfolio (continued)................. 2001 1.057 0.908 1,013,052
2000 1.303 1.057 787,876
1999 1.000 1.303 274,568
Style Focus Series: Small Cap Growth Portfolio (1/05).. 2005 1.000 1.000 --
Style Focus Series: Small Cap Value Portfolio (1/05)... 2005 1.000 1.000 --
Travelers Quality Bond Portfolio (3/99)................ 2005 1.290 1.300 453,665
2004 1.259 1.290 428,682
2003 1.186 1.259 336,903
2002 1.130 1.186 324,873
2001 1.063 1.130 229,303
2000 1.002 1.063 89,190
1999 1.000 1.002 30,445
U.S. Government Securities Portfolio (3/99)............ 2005 1.396 1.445 664,291
2004 1.326 1.396 612,998
2003 1.301 1.326 641,656
2002 1.154 1.301 674,168
2001 1.099 1.154 329,688
2000 0.968 1.099 147,364
1999 1.000 0.968 81,239
Travelers Series Fund Inc.
SB Adjustable Rate Income Portfolio --
Class I Shares (10/03)................................. 2005 1.005 1.020 65,137
2004 1.001 1.005 56,767
2003 1.000 1.001 12,265
Smith Barney Aggressive Growth Portfolio (5/01)........ 2005 0.923 1.022 833,193
2004 0.846 0.923 947,296
2003 0.634 0.846 829,147
2002 0.949 0.634 372,023
2001 1.000 0.949 148,073
Smith Barney High Income Portfolio (5/99).............. 2005 1.166 1.187 46,658
2004 1.065 1.166 12,147
2003 0.842 1.065 20,424
2002 0.877 0.842 17,421
B-11
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Smith Barney High Income Portfolio (continued)............ 2001 0.918 0.877 26,499
2000 1.007 0.918 12,407
1999 1.000 1.007 --
Smith Barney International All Cap Growth
Portfolio (3/99)........................................ 2005 0.883 0.978 131,177
2004 0.755 0.883 176,162
2003 0.597 0.755 182,229
2002 0.810 0.597 184,371
2001 1.186 0.810 202,204
2000 1.569 1.186 76,324
1999 1.000 1.569 33,821
Smith Barney Large Capitalization Growth Portfolio (3/99).. 2005 0.987 1.030 269,310
2004 0.991 0.987 338,275
2003 0.677 0.991 414,434
2002 0.907 0.677 335,753
2001 1.045 0.907 323,325
2000 1.132 1.045 265,016
1999 1.000 1.132 100,647
Social Awareness Stock Portfolio (3/99).................... 2005 0.925 0.957 142,054
2004 0.877 0.925 210,284
2003 0.686 0.877 190,338
2002 0.921 0.686 205,434
2001 1.100 0.921 252,885
2000 1.115 1.100 338,770
1999 1.000 1.115 204,232
Van Kampen Life Investment Trust
Comstock Portfolio -- Class II Shares (8/03)............... 2005 1.464 1.512 32,763
2004 1.257 1.464 35,463
2003 1.000 1.257 15,449
Emerging Growth Portfolio -- Class II Shares (1/02)........ 2005 0.729 0.778 --
2004 0.688 0.729 --
2003 0.546 0.688 --
2002 0.817 0.546 --
2001 1.000 0.817 --
B-12
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Enterprise Portfolio -- Class II Shares (10/01).......................... 2005 0.817 0.875 --
2004 0.794 0.817 --
2003 0.637 0.794 --
2002 0.911 0.637 --
2001 1.000 0.911 --
Variable Annuity Portfolios
Smith Barney Small Cap Growth Opportunities
Portfolio (5/01)......................................................... 2005 1.130 1.176 27,437
2004 0.986 1.130 2,533
2003 0.700 0.986 --
2002 0.949 0.700 --
2001 1.000 0.949 --
Variable Insurance Products Fund
Asset Manager Portfolio -- Service Class 2 (6/00)........................ 2005 0.990 1.019 229,844
2004 0.949 0.990 291,168
2003 0.813 0.949 262,244
2002 0.900 0.813 227,798
2001 0.949 0.900 178,530
2000 1.000 0.949 133,640
Contrafund(double left angle quote) Portfolio -- Service Class 2 (9/01).. 2005 1.238 1.432 307,737
2004 1.083 1.238 274,073
2003 0.852 1.083 244,184
2002 0.950 0.852 208,513
2001 1.000 0.950 --
Dynamic Capital Appreciation Portfolio -- Service
Class 2 (5/01)........................................................... 2005 0.966 1.157 16,820
2004 0.962 0.966 16,820
2003 0.776 0.962 5,993
2002 0.846 0.776 5,993
2001 1.000 0.846 --
Mid Cap Portfolio -- Service Class 2 (7/01).............................. 2005 1.563 1.830 373,612
2004 1.264 1.563 181,421
2003 0.921 1.264 103,818
2002 1.032 0.921 100,887
2001 1.000 1.032 --
B-13
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 0.80% 3% AIR (CONTINUED)
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Wells Fargo Variable Trust
Wells Fargo Advantage Multi Cap Value Fund (7/99).. 2005 1.175 1.358 6,351
2004 1.014 1.175 6,351
2003 0.739 1.014 9,511
2002 0.969 0.739 9,511
2001 0.938 0.969 6,351
2000 0.877 0.938 6,351
1999 1.000 0.877 6,351
B-14
ACCUMULATION UNIT VALUES (IN DOLLARS)
SEPARATE ACCOUNT CHARGES 1.25% 140 FL
UNIT VALUE AT NUMBER OF UNITS
BEGINNING OF UNIT VALUE AT OUTSTANDING AT
PORTFOLIO NAME YEAR YEAR END OF YEAR END OF YEAR
- -------------- ---- ------------- ------------- ---------------
Greenwich Street Series Fund
Equity Index Portfolio -- Class II Shares (3/99). 2005 0.850 0.862 --
2004 0.791 0.850 --
2003 0.636 0.791 --
2002 0.841 0.636 --
2001 0.986 0.841 --
2000 1.117 0.986 --
1999 1.000 1.117 --
NOTES
The date next to each funding option's name reflects the date money first came
into the funding option through the Separate Account.
Funding options not listed above had no amount allocated to them or where not
available as of December 31, 2005.
"Number of Units outstanding at the end of the period" may include units for
Contracts Owners in payout phase, where appropriate.
If a accumulate unit value has no assets and units across all sub-accounts
within the Separate Account, and has had no assets and units for the history
displayed on the Condensed Financial Information in the past, then it may not
be displayed.
Effective 04/18/2005: Lazard International Stock Portfolio changed its name to
Mondrian International Stock Portfolio.
Effective 04/18/2005: Merrill Lynch Large Cap Core Portfolio changed its name
to Mercury Large Cap Core Portfolio.
Effective 04/11/2005: Strong Multi Cap Value Fund II changed its name to Wells
Fargo Advantage Multi Cap Value Fund.
On 02/25/2005, The Travelers Series Trust: MFS(R)(R) Emerging Growth Portfolio
was merged into the Traveler Series Trust: MFS(R) Mid Cap Growth Portfolio, and
is no longer available as a funding option.
On 02/25/2005, The AIM Equity Fund, Inc.: AIM Constellation Fund -- Class A was
replaced by the Travelers Series Trust: AIM Capital Appreciation Portfolio, and
is no longer available as a funding option.
On 02/25/2005, the Fidelity Advisor Series I: Advisor growth Opportunities Fund
- -- Class T was replaced by the Greenwich Street Series Fund: Appreciation
Portfolio, and is no longer available as a funding option.
B-15
On 02/25/2005, The AIM Equity Funds, Inc: AIM Charter Fund -- Class A was
replaced by the Greenwich Street Series Fund: Appreciation Portfolio, and is no
longer available as a funding option.
On 02/25/2005, The Dreyfus/Laurel Funds, Inc: Dreyfus Disciplined Stock Fund
was replaced by the Greenwich Street Series Fund: Equity Index Portfolio --
Class II Shares, and is no longer available as a funding option.
B-16
NOTES (CONTINUED)
On 02/25/2005, The Neuberger Berman Equity Assets: Neuberger Berman Guardian
Fund Advisor Class was replaced by the American Funds Insurance Series: Growth
- -- Income Fund -- Class 2 Shares, and is no longer available as a funding
option.
On 02/25/2005. the PBHG Funds: PBHG Growth Fund -- Advisor Class was replaced
by the Janus Aspen Series: Mid Cap Growth Portfolio -- Service Shares, and is
no longer available as a funding option.
On 02/25/2005. the Greenwich Street Series Funds: Diversified Strategic Income
Portfolio was replaced by the Travelers Series Trust: Pioneer Strategic Income
Portfolio, and is no longer available as a funding option.
On 02/25/2005. the Smith Barney Equity Funds: Smith Barney Social Awareness
Fund -- Class A was replaced by the Travelers Series Fund, Inc: Social
Awareness Stock Portfolio, and is no longer available as a funding option.
On 02/25/2005. the Dreyfus A Bonds Plus, Inc: Dreyfus A Bonds Plus, Inc was
replaced by the Travelers Series Trust: U.S. Government Securities Portfolio,
and is no longer available as a funding option.
AIM Variable Insurance Funds, Inc. : AIM Premier Equity Fund -- Series I is no
longer available to new contract owners.
Credit Suisse Trust: Emerging Markets Portfolio is no longer available to new
contract owners
Variable Insurance Products Fund III: Dynamic Capital Appreciation Portfolio --
Service Class 2 -- is no longer available to new contract owners
The Travelers Series Trust: Federated Stock Portfolio is no longer available to
new contract owners
Janus Aspen Series: Balanced Portfolio -- Service Shares -- is no longer
available to new contract owners
Janus Aspen Series: World Wide Growth Portfolio -- Service Shares is no longer
available to new contract holders.
Putnam Variable Trust: Putnam VT Discovery Growth Fund -- Class IB Share is no
longer available to new contract owners
Putnam Variable Trust: Putnam VT International Equity Fund -- Class IB Shares
is no longer available to new contract holders.
Salomon Brothers Variable Series Funds Inc.: Total Return Fund -- Class I is no
longer available to new contract holders.
Smith Barney Investment Series: Smith Barney Dividend Strategy Portfolio is no
longer available to new contract owners
Greenwich Street Series Fund: Fundamental Value Portfolio is no longer
available to new contract holders.
Travelers Series Fund Inc.: Smith Barney International All Cap Growth Portfolio
is no longer available to new contract owners
Strong Variable insurance Funds, Inc. : Strong Multi Cap Value Fund II is no
longer available to new contract owners.
Van Kampen Life Investment Trust: Enterprise Portfolio -- Class II Shares is no
longer available to new contract holders.
B-17
Fidelity VIP Asset Manager Portfolio- Service Class 2 is no longer available to
new contract owners.
Salomon Brothers Variable Small Cap Growth Fund -- Class I is no longer
available to new contract owners.
Smith Barney Premier Selections All Cap Growth Portfolio is no longer available
to new contract owners.
B-18
NOTES (CONTINUED)
Van Kampen Emerging Growth Portfolio -- Class 2 shares is no longer available
to new contract owners.
B-19
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.
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.
C-1
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.
C-2
APPENDIX D
- --------------------------------------------------------------------------------
MARKET VALUE ADJUSTMENT
If you have selected any period certain option, you may elect to surrender a
payment equal to a portion 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 a 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 that 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:
N
Present Value = (sigma) [Payment\\s\\ X (1/1 + iC)/t/365/
s = 1
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, then 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,
if applicable, will increase to the level they would have been had no
liquidation taken place.
ILLUSTRATION:
Amount Annuitized $12,589.80
Annuity Option Life with 10 year certain period
Annuity Payments $1,000 Annually -- first payment immediately
For the purposes of illustration, assume after two years (immediately preceding
the third payment), you choose to receive full liquidity, and the current rate
of return that 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)^2 + (1000/1.04)^3 + (1000/1.04)^4 +
(1000/1.04)^5 + (1000/1.04)^6 + (1000/1.04)^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 $1,000 annually until your death.
D-1
APPENDIX E
- --------------------------------------------------------------------------------
WHAT YOU NEED TO KNOW IF YOU ARE A TEXAS OPTIONAL
RETIREMENT PROGRAM PARTICIPANT
If you are a participant in the Texas Optional Retirement Program, Texas law
permits us to make withdrawals on your behalf only if you die, retire or
terminate employment in all Texas institutions of higher education, as defined
under Texas law. Any withdrawal you ask for requires a written statement from
the appropriate Texas institution of higher education verifying your vesting
status and (if applicable) termination of employment. Also, we require a
written statement from you that you are not transferring employment to another
Texas institution of higher education. If you retire or terminate employment in
all Texas institutions of higher education or die before being vested, amounts
provided by the state's matching contribution will be refunded to the
appropriate Texas institution. We may change these restrictions or add others
without your consent to the extent necessary to maintain compliance with the
law.
APPENDIX -- F:
ADDITIONAL INFORMATION REGARDING THE UNDERLYING FUNDS
ADDITIONAL INFORMATION REGARDING THE UNDERLYING FUNDS:
UNDERLYING FUND NAME CHANGES
FORMER NAME NEW NAME
- --------------------------------------------------------- ------------------------------------------------------------
CitiStreet Funds, Inc. Met Investment Funds, Inc.
CitiStreet Diversified Bond Fund -- Class I MetLife Investment Diversified Bond Fund -- Class I
CitiStreet International Stock Fund -- Class I MetLife Investment International Stock Fund -- Class I
CitiStreet Large Company Stock Fund -- Class I MetLife Investment Large Company Stock Fund -- Class I
CitiStreet Small Company Stock Fund -- Class I MetLife Investment Small Company Stock Fund -- Class I
Greenwich Street Series Fund Legg Mason Partners Variable Portfolios II
Appreciation Portfolio Legg Mason Partners Variable Appreciation Portfolio
Equity Index Portfolio -- Class I Legg Mason Partners Variable Equity Index Portfolio --
Fundamental Value Portfolio+ Class II
Legg Mason Partners Variable Fundamental Value Portfolio+
Salomon Brothers Variable Series Funds Inc Legg Mason Partners Variable Portfolios I, Inc
Salomon Brothers Variable All Cap Fund -- Class I Legg Mason Partners Variable All Cap Portfolio -- Class 1
Salomon Brothers Variable Investors Fund -- Class I Legg Mason Partners Variable Investors Portfolio -- Class 1*
Salomon Brothers Variable Total Return Fund -- Class I+ Legg Mason Partners Variable Total Return Portfolio -- Class
Salomon Brothers Variable Small Cap Growth Fund -- 1+
Class -- 1+ Legg Mason Partners Variable Small Cap Growth Portfolio --
Class -- 1 +
Smith Barney Investment Series Legg Mason Partners Investment Series
Smith Barney Dividend Strategy Portfolio+ Legg Mason Partners Variable Dividend Strategy Portfolio+
Smith Barney Premier Selections All Cap Growth Portfolio+ Legg Mason Partners Variable Premier Selections All Cap
Growth Portfolio+
Travelers Series Fund Inc. Legg Mason Partners Variable Portfolios III, Inc.
SB Adjustable Rate Income Portfolio Legg Mason Partners Variable Adjustable Rate Income
Smith Barney Aggressive Growth Portfolio Portfolio
Smith Barney High Income Legg Mason Partners Variable Aggressive Growth Portfolio
Smith Barney Large Capitalization Growth Portfolio Legg Mason Partners Variable High Income Portfolio
Social Awareness Stock Portfolio Legg Mason Partners Variable Large Cap Growth Portfolio
Smith Barney International All Cap Growth Legg Mason Partners Variable Social Awareness Stock
Portfolio
Legg Mason Partners Variable International All Cap Growth*
Variable Annuity Portfolios Legg Mason Partners Variable Portfolios V
Smith Barney Small Cap Growth Opportunities Legg Mason Partners Small Cap Growth Opportunities
Portfolio
Wells Fargo Variable Trust Wells Fargo Variable Trust
Wells Fargo Advantage Multi Cap Value Fund+ Wells Fargo Advantage VT Small/MidCap Value Fund+
F-1
UNDERLYING FUND MERGERS/REORGANIZATIONS
The former Underlying Funds were merged with and into the new Underlying Funds.
Former Underlying Fund New Underlying Fund
Capital Appreciation Fund Met Investors Series Trust Janus Capital Appreciation
Portfolio -- Class A
Managed Assets Trust Metropolitan Series Fund, Inc.
Legg Mason Partners Managed Assets Portfolio -- Class A
Money Market Portfolio BlackRock Money Market Portfolio -- Class A
High Yield Bond Trust Western Asset Management High Yield Bond Portfolio --
Class A
Travelers Series Trust Met Investors Series Trust
Disciplined Mid Cap Stock Portfolio Batterymarch Mid-Cap Stock Portfolio -- Class A
Style Focus Series: Small Cap Value Portfolio Dreman Small-Cap Value Portfolio -- Class A
Mondrian International Stock Portfolio Harris Oakmark International Stock Portfolio -- Class A
Convertible Securities Portfolio Lord Abbett Bond Debenture Portfolio Class A
Federated Stock Portfolio + Lord Abbett Growth and Income Portfolio -- Class B
Mercury Large Cap Core Portfoliot Mercury Large-Cap Core Portfolio -- Class A
AIM Capital Appreciation Portfolio Met/AIM Capital Appreciation Portfolio -- Class A
MFS(R) Value Portfolio MFS(R) Value Portfolio -- Class A
Pioneer Fund Portfolio* Pioneer Fund Portfolio -- Class A
Pioneer Mid-Cap Value Portfolio Pioneer Mid-Cap Value Portfolio
Pioneer Strategic Income Portfolio -- Class A * Pioneer Strategic Income Portfolio
Metropolitan Series Fund
MFS(R) Mid Cap Growth Portfolio BlackRock Aggressive Growth Portfolio -- Class D
Travelers Quality Bond Portfolio BlackRock Bond Income Portfolio -- Class A
Large Cap Portfolio FI Large Cap Portfolio Class A
Strategic Equity Portfolio Trust FI Large Cap Portfolio Class A
Equity Income Portfolio FI Value Leaders Portfolio -- Class D
MFS(R) Total Return* MFS(R) Total Return Portfolio -- Class F
U.S. Government Securities Portfolio Western Asset Management U.S. Government Portfolio
UNDERLYING FUND SUBSTITUTIONS
The following new Underlying Funds were substituted for the former Underlying
Funds.
FORMER UNDERLYING FUND NEW UNDERLYING FUND
- ----------------------------------------------------------- -------------------------------------------------------
Lord Abbett Series Fund, Inc.. Met Investors Series Trust
Growth and Income Portfolio Lord Abbett Growth and Income Portfolio -- Class B Lord
Mid Cap Value Portfolio Abbett Mid Cap Value Portfolio -- Class B
Oppenheimer Variable Account Funds
Oppenheimer Main Street Fund/VA -- Service Shares of the Lord Abbett Growth and Income Portfolio -- Class B
Franklin Templeton VIP Trust
Mutual Shares Securities Fund -- Class 2 Shares Lord Abbett Growth and Income Portfolio -- Class B
Delaware VIP Trust
Delaware VIP REIT Series -- Standard Class Neuberger Berman Real Estate Portfolio -- Class A
Fidelity Variable Insurance Products Metropolitan Series Fund, Inc.
Fidelity VIP Asset Manager Portfolio -- Service Class 2 MFS(R) Total Return Portfolio -- Class F
Janus Aspen Series MFS(R) Total Return Portfolio -- Class F
Janus Aspen Balanced Portfolio -- Service Shares+
Franklin Templeton Variable Insurance Products
Trust
Franklin Templeton Growth Securities Fund -- Class 2 Shares Oppenheimer Global Equity Portfolio- Class B
Variable Insurance Product Fund, VIP Asset Manager MFS Total Return Portfolio -- Class F
Portfolio+
+ This funding option is closed to new investors.
F-2
APPENDIX G -- PORTFOLIO LEGAL AND MARKETING NAMES
SERIES FUND/ PORTFOLIO/ MARKETING
TRUST SERIES NAME
- --------------------------------------- ---------------------------- ------------------------
AMERICAN FUNDS INSURANCE SERIES Global Growth Fund American Funds Global
Growth Fund
AMERICAN FUNDS INSURANCE SERIES Growth - Income Fund American Funds Growth-
Income Fund
AMERICAN FUNDS INSURANCE SERIES Growth Fund American Funds Growth
Fund
CREDIT SUISSE TRUST Emerging Markets Portfolio Credit Suisse Emerging
Markets Portfolio
DREYFUS VARIABLE INVESTMENT FUND Appreciation Portfolio Dreyfus VIF Appreciation
Portfolio
DREYFUS VARIABLE INVESTMENT FUND Developing Leaders Portfolio Dreyfus VIF Developing
Leaders Portfolio
JANUS ASPEN SERIES Mid Cap Growth Portfolio Janus Aspen Series Mid
Cap Growth Portfolio
JANUS ASPEN SERIES Worldwide Growth Portfolio Janus Aspen Series
Worldwide Growth
Portfolio
METROPOLITAN SERIES FUND, INC. FI Large Cap Portfolio FI Large Cap Portfolio
(Fidelity)
G-1
SERIES FUND/ PORTFOLIO/ MARKETING
TRUST SERIES NAME
- --------------------------------------- -------------------------- --------------------------
METROPOLITAN SERIES FUND, INC. FI Value Leaders Portfolio FI Value Leaders Portfolio
(Fidelity)
PIMCO VARIABLE INSURANCE TRUST Real Return Portfolio PIMCO VIT Real Return
Portfolio
PIMCO VARIABLE INSURANCE TRUST Total Return Portfolio PIMCO VIT Total Return
Portfolio
REGISTERED FIX ACCOUNT Registered Fix Fixed Account
VAN KAMPEN LIFE INVESTMENT TRUST Van Kampen Life Investment Van Kampen LIT
Trust Comstock Portfolio Comstock Portfolio
VAN KAMPEN LIFE INVESTMENT TRUST Van Kampen Life Investment Van Kampen LIT Emerging
Trust Emerging Growth Growth Portfolio
Portfolio
VAN KAMPEN LIFE INVESTMENT TRUST Van Kampen Life Investment Van Kampen LIT Enterprise
Trust Enterprise Portfolio Portfolio
VARIABLE INSURANCE PRODUCTS Dynamic Capital Fidelity VIP Dynamic
Appreciation Portfolio Capital Appreciation
Portfolio
VARIABLE INSURANCE PRODUCTS Contrafund(R) Portfolio Fidelity VIP Contrafund(R)
Portfolio
VARIABLE INSURANCE PRODUCTS Mid Cap Portfolio Fidelity VIP Mid Cap
Portfolio
G-2
APPENDIX H
- --------------------------------------------------------------------------------
CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION
The Statement of Additional Information contains more specific information and
financial statements relating to MetLife Insurance Company of Connecticut or
MetLife Life and Annuity Company of Connecticut. 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
Net Investment Factor
Money Market Calculation
Federal Tax Considerations
Independent Registered Public Accounting Firms
Condensed Financial Information
Financial Statements
- --------------------------------------------------------------------------------
Copies of the Statement of Additional Information dated May 1, 2006 are
available without charge. To request a copy, please clip this coupon on the
line above, enter your name and address in the spaces provided below, and mail
to: MetLife Insurance Company of Connecticut or MetLife Life and Annuity
Company of Connecticut, Annuity Operations and Services, One Cityplace, 185
Asylum Street, Hartford, Connecticut 06103-3415. For the MetLife Insurance
Company of Connecticut Statement of Additional Information, please request MIC
Book 21 and for the MetLife Life and Annuity Company of Connecticut Statement
of Additional Information please request MLAC Book 21.
Check Box:
[ ] MIC Book 21
[ ] MLAC Book 21
Name:
-------------------------
Address:
-------------------------
-------------------------
H-1
METLIFE RETIREMENT ACCOUNT ANNUITY PROSPECTUS:
(Formerly Travelers Retirement Account Annuity)
METLIFE OF CT SEPARATE ACCOUNT FIVE FOR VARIABLE ANNUITIES
(Formerly The Travelers Separate Account Five for Variable Annuities)
METLIFE OF CT SEPARATE ACCOUNT SIX FOR VARIABLE ANNUITIES
(Formerly The Travelers Separate Account Six for Variable Annuities)
The Travelers Insurance Company has filed for approval to change its name to
MetLife Insurance Company of Connecticut. The Travelers Life and Annuity
Company has filed for approval to change its name to MetLife Life and Annuity
Company of Connecticut. The change will be effective May 1, 2006 pending
regulatory approval. You will receive a contract endorsement notifying you of
the name change once it has occurred.
May 1, 2006
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 13. Other Expenses of Issuance and Distribution
Estimate of Printing Costs: $10,000
Cost of Independent Auditors: $5,000
Item 14. 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.
C.G.S. Section 33-778 provides an exclusive remedy; a Connecticut corporation
cannot indemnify a director or officer to an extent either greater or lesser
than that authorized by the statute, e.g., pursuant to its certificate of
incorporation, by-laws, or any separate contractual arrangement. However, the
statute does specifically authorize a corporation to procure indemnification
insurance to provide greater indemnification rights. The premiums for such
insurance may be shared with the insured individuals on an agreed basis.
The Registrant's parent, MetLife, Inc. ("MetLife") has secured a Financial
Institutions Bond in the amount of $50,000,000, subject to a $5,000,000
deductible. MetLife also maintains Directors' and Officers' Liability insurance
coverage with limits of $400 million under which the Registrant and
Registrant's underwriter, as well as certain other subsidiaries of MetLife are
covered.
Rule 484 Undertaking
Insofar as indemnification for liability arising under the Securities Act of
1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
Item 15. Recent Sales of Unregistered Securities
None
Item 16. Exhibits
(a) Exhibits
Exhibit
Number Description
- ------- ---------------------------------------------------------------------
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).
a. Certificate of Amendment of the Charter as Amended and Restated of
The Travelers Insurance Company effective May 1, 2006.
(Incorporated herein by reference to Exhibit 6(c) to Post-
Effective Amendment No. 14 to The Travelers Fund ABD for Variable
Annuities Registration Statement on Form N-4 , File No. 033-65343
filed April 5, 2006.)
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.)
4(a) Company Name Change Endorsement The Travelers Insurance Company
effective May 1, 2006. (Incorporated herein by reference to Exhibit
4(c) to Post-Effective Amendment No. 14 to The Travelers Fund ABD for
Variable Annuities to the Registration Statement on Form N-4, File
No. 033-65343 filed April 5, 2006.)
5. Opinion Re: Legality, Including Consent. (Incorporated herein by
reference to Exhibit 5 to the Registration Statement on Form S-2,
File No. 333-69793 filed December 28, 1998.)
8. None.
9. None.
10. None.
11. None.
12. None.
13. None.
15. None.
16. None.
23(a). 1. Consent of KPMG LLP, Independent Registered Public Accounting
Firm. Filed herewith.
2. Consent of Deloitte & Touche LLP, Independent Registered Public
Accounting Firm. Filed herewith.
23(b). Consent of Counsel (see Exhibit 5).
24. Powers of Attorney authorizing --Michele H. Abate, John E. Connolly,
Jr., James L. Lipscomb, Gina C. Sandonato, Myra L. Saul, Paul G.
Cellupica, Richard S. Colllins, and Marie C. Swift to act as
signatory for C. Robert Henrikson, Leland C. Launer, Jr., Lisa M.
Weber, Stanley J. Talbi, and Jospeh J. Prochaska, Jr. (Filed
herewith).
25. None.
26. None.
27. None.
(b)Financials pursuant to Regulation S-X. Incorporated by reference to Form
10-K for the fiscal year ended December 31, 2005 (File No. 033-03094), as
filed with the Commission on March 31, 2006 (Accession No.
0000950144-06-003059) and by reference to Form 10-Q for the period ended
September 30, 2005 (File No. 033-03094), as filed with the Commission on
November 18, 2005 (Accession No 0000950123-05-013893.
..
Item 17. Undertakings
The undersigned registrant hereby undertakes as follows, pursuant to Item 512
of Regulation S-K:
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.
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--1 and has duly caused 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 26, 2006.
THE TRAVELERS INSURANCE COMPANY
(Registrant)
By: /S/ BENNETT D. KLEINBERG
------------------------------
Bennett D. Kleinberg, Vice
President and Actuary
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 , 2006.
Name Title
---- -----
/S/ *C. ROBERT HENRIKSON L Chairman, President and Chief
- --------------------------------------- Executive Officer
(C. Robert Henrikson)
/S/ LELAND C. LAUNER, JR. Director
- ---------------------------------------
(Leland C. Launer, Jr)
/S/ *LISA M. WEBER Director
- ---------------------------------------
Lisa M. Weber
/S/ STANLEY J. TALBI Senior Vice President and Chief
- --------------------------------------- Financial Officer
(Stanley J. Talbi )
/S/ JOSEPH J. PROCHASKA, JR. Senior Vice President and Chief
- --------------------------------------- Accounting Officer
(JOSEPH J. PROCHASKA, JR )
By: /S/ MYRA L. SAUL, ATTORNEY-IN-FACT
--------------------------------------
EXHIBIT INDEX
Exhibit
number Description
- ------- ---------------------------------------------------------------------
23(a). 1. Consent of KPMG LLP, Independent Registered Public Accounting
Firm. Filed herewith.
2. Consent of Deloitte & Touche LLP, Independent Registered Public
Accounting Firm. Filed herewith.
24. Powers of Attorney authorizing Michele H. Abate, John E. Connolly,
Jr., James L. Lipscomb, Gina C. Sandonato, Myra L. Saul, Paul G.
Cellupica, Richard S. Collins, and Marie C. Swift to act as signatory
for C. Robert Henrikson, Leland C. Launer, Jr., Lisa M. Weber,
Stanley J. Talbi, and Joseph J. Prochaska, Jr.