<PAGE>

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

                UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

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

                                   FORM 10-Q

<Table>
<C>        <S>
   [X]     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934

           FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2005

                                        OR


   [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
           SECURITIES EXCHANGE ACT OF 1934

           FOR THE TRANSITION PERIOD FROM        TO
</Table>

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

                        COMMISSION FILE NUMBER 33-03094

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

                        THE TRAVELERS INSURANCE COMPANY
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
                 CONNECTICUT                                     06-0566090
       (State or other jurisdiction of                        (I.R.S. Employer
        incorporation or organization)                      Identification No.)

     ONE CITYPLACE, HARTFORD, CONNECTICUT                        06103-3415
   (Address of principal executive offices)                      (Zip Code)
</Table>

                                 (860) 308-1000
              (Registrant's telephone number, including area code)

     Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.  Yes [X]     No [ ]

     Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).  Yes [ ]     No [X]

     As of the date hereof, there were outstanding 40,000,000 shares of common
stock, par value $2.50 per share, of the registrant, all of which were owned by
MetLife, Inc.

                           REDUCED DISCLOSURE FORMAT

     The registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is therefore filing this Form 10-Q with the
reduced disclosure format.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                                               PAGE
                                                                               ----
<S>              <C>                                                           <C>
                          PART I -- FINANCIAL INFORMATION
ITEM 1.          FINANCIAL STATEMENTS
                 Interim Condensed Consolidated Statements of Income for the
                 three and six months ended June 30, 2005 and 2004
                 (unaudited).................................................    3
                 Interim Condensed Consolidated Balance Sheets at June 30,
                 2005 (unaudited) and December 31, 2004......................    4
                 Interim Condensed Consolidated Statements of Changes in
                 Shareholder's Equity for the six months ended June 30, 2005
                 and 2004 (unaudited)........................................    5
                 Interim Condensed Consolidated Statements of Cash Flows for
                 the six months ended June 30, 2005 and 2004 (unaudited).....    6
                 Notes to Interim Condensed Consolidated Financial Statements
                 (unaudited).................................................    7
ITEM 2.          MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION    18
                 AND RESULTS OF OPERATIONS...................................
ITEM 3.          QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET          26
                 RISK........................................................
ITEM 4.          CONTROLS AND PROCEDURES.....................................   26

                           PART II -- OTHER INFORMATION
ITEM 1.          LEGAL PROCEEDINGS...........................................   27
ITEM 6.          EXHIBITS....................................................   28
Signatures...................................................................   29
Exhibit Index................................................................   30
Exhibit 31.01................................................................   31
Exhibit 31.02................................................................   32
Exhibit 32.01................................................................   33
Exhibit 32.02................................................................   34
</Table>

                                        2
<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

              INTERIM CONDENSED CONSOLIDATED STATEMENTS OF INCOME

<Table>
<Caption>
                                                              THREE MONTHS       SIX MONTHS
                                                                  ENDED             ENDED
                                                                JUNE 30,          JUNE 30,
                                                             ---------------   ---------------
                                                              2005     2004     2005     2004
                                                             ------   ------   ------   ------
                                                                        (UNAUDITED)
                                                                      ($ IN MILLIONS)
<S>                                                          <C>      <C>      <C>      <C>
REVENUES
Premiums...................................................  $  172   $  168   $  325   $  323
Net investment income......................................     846      729    1,608    1,479
Realized investment gains (losses).........................     (28)     (25)      26      (16)
Fee income.................................................     205      172      406      330
Other revenues.............................................      53       11       70       44
                                                             ------   ------   ------   ------
  Total Revenues...........................................   1,248    1,055    2,435    2,160
                                                             ------   ------   ------   ------
BENEFITS AND EXPENSES
Current and future insurance benefits......................     314      284      599      571
Interest credited to contractholders.......................     351      316      698      626
Amortization of deferred acquisition costs.................     122       89      228      168
General and administrative expenses........................     101       52      169      120
                                                             ------   ------   ------   ------
  Total Benefits and Expenses..............................     888      741    1,694    1,485
                                                             ------   ------   ------   ------
Income from continuing operations before federal income
  taxes....................................................     360      314      741      675
Federal income taxes.......................................      94       91      205      171
                                                             ------   ------   ------   ------
Income from continuing operations..........................     266      223      536      504
                                                             ------   ------   ------   ------
Income from discontinued operations before federal income
  taxes....................................................     179      182      361      356
Federal income taxes.......................................      61       62      121      112
                                                             ------   ------   ------   ------
Income from discontinued operations, net of income taxes
  (see Note 4).............................................     118      120      240      244
                                                             ------   ------   ------   ------
Net Income.................................................  $  384   $  343   $  776   $  748
                                                             ======   ======   ======   ======
</Table>

       See Notes to Interim Condensed Consolidated Financial Statements.
                                        3
<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

                 INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

<Table>
<Caption>
                                                               JUNE 30,      DECEMBER 31,
                                                                 2005            2004
                                                              -----------   ---------------
                                                              (UNAUDITED)
                                                                     ($ IN MILLIONS)
<S>                                                           <C>           <C>
ASSETS
Investments (including $1,532 and $2,468 subject to
  securities lending agreements, respectively)..............    $49,737        $ 55,532
Separate and variable accounts..............................     30,427          30,742
Reinsurance recoverables....................................      3,897           3,884
Deferred acquisition costs..................................      2,968           2,772
Other assets................................................      2,572           2,894
Assets of discontinued operations (see Note 4)..............         --          10,019
                                                                -------        --------
  Total Assets..............................................    $89,601        $105,843
                                                                =======        ========


LIABILITIES
Contractholder funds........................................    $33,095        $ 33,770
Future policy benefits and claims...........................     13,422          13,263
Separate and variable accounts..............................     30,427          30,742
Other liabilities...........................................      4,450           8,018
Liabilities of discontinued operations (see Note 4).........         --           5,745
                                                                -------        --------
  Total Liabilities.........................................     81,394          91,538
                                                                -------        --------


SHAREHOLDER'S EQUITY
Common stock, par value $2.50 per share; 40 million shares
  authorized, issued and outstanding........................        100             100
Additional paid-in capital..................................      2,357           5,449
Retained earnings...........................................      4,294           7,159
Accumulated other changes in equity from nonowner sources...      1,456           1,597
                                                                -------        --------
  Total Shareholder's Equity................................      8,207          14,305
                                                                -------        --------
  Total Liabilities and Shareholder's Equity................    $89,601        $105,843
                                                                =======        ========
</Table>

       See Notes to Interim Condensed Consolidated Financial Statements.
                                        4
<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

            INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
                              SHAREHOLDER'S EQUITY

<Table>
<Caption>
                                                              SIX MONTHS ENDED
                                                                  JUNE 30,
                                                              -----------------
                                                               2005      2004
                                                              -------   -------
                                                                 (UNAUDITED)
                                                               ($ IN MILLIONS)
<S>                                                           <C>       <C>
COMMON STOCK
Balance, beginning of period................................  $   100   $   100
Changes in common stock.....................................       --        --
                                                              -------   -------
Balance, end of period......................................  $   100   $   100
                                                              =======   =======
ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period................................  $ 5,449   $ 5,446
Stock option tax benefit (expense)..........................        3         1
Restructuring transactions (see Note 5).....................   (3,095)       --
                                                              -------   -------
Balance, end of period......................................  $ 2,357   $ 5,447
                                                              =======   =======
RETAINED EARNINGS
Balance, beginning of period................................  $ 7,159   $ 6,451
Net income..................................................      776       748
Cash dividends to parent....................................     (675)     (620)
Restructuring transactions (see Note 5).....................   (2,966)       --
                                                              -------   -------
Balance, end of period......................................  $ 4,294   $ 6,579
                                                              =======   =======
ACCUMULATED OTHER CHANGES IN EQUITY FROM NONOWNER SOURCES
Balance, beginning of period................................  $ 1,597   $ 1,360
Foreign currency translation, net of income taxes...........       --         1
Unrealized gains (losses), net of income taxes..............      (32)     (606)
Derivative instrument hedging activity gains (losses), net
  of income taxes...........................................       57        60
Restructuring transactions (See Note 5).....................     (166)       --
                                                              -------   -------
Balance, end of period......................................  $ 1,456   $   815
                                                              =======   =======
SUMMARY OF CHANGES IN EQUITY FROM NONOWNER SOURCES
Net income..................................................  $   776   $   748
Other changes in equity from nonowner sources...............       25      (545)
                                                              -------   -------
Total changes in equity from nonowner sources...............  $   801   $   203
                                                              =======   =======
TOTAL SHAREHOLDER'S EQUITY
Balance, beginning of period................................  $14,305   $13,357
Changes in nonowner sources.................................      801       203
Dividends...................................................     (675)     (620)
Changes in additional paid-in capital.......................        3         1
Restructuring transactions (see Note 5).....................   (6,227)       --
                                                              -------   -------
Balance, end of period......................................  $ 8,207   $12,941
                                                              =======   =======
</Table>

       See Notes to Interim Condensed Consolidated Financial Statements.
                                        5
<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

            INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                          INCREASE (DECREASE) IN CASH

<Table>
<Caption>
                                                              SIX MONTHS ENDED
                                                                  JUNE 30,
                                                              -----------------
                                                               2005      2004
                                                              -------   -------
                                                                 (UNAUDITED)
                                                               ($ IN MILLIONS)
<S>                                                           <C>       <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES...................  $ 1,196   $   404
                                                              -------   -------
CASH FLOWS FROM INVESTING ACTIVITIES
  Proceeds from maturities of investments
     Fixed maturities.......................................    2,950     2,903
     Equity securities......................................        7        61
     Mortgage loans.........................................      248       379
  Proceeds from sales of investments
     Fixed maturities.......................................    2,875     4,168
     Equity securities......................................       97        47
     Mortgage loans.........................................       40        29
     Real estate held for sale..............................       11        12
  Purchases of investments
     Fixed maturities.......................................   (4,623)   (9,057)
     Equity securities......................................     (117)      (71)
     Mortgage loans.........................................     (452)     (439)
  Policy loans, net.........................................      201         1
  Short-term securities (purchases) sales, net..............      987      (258)
  Other investment (purchases) sales, net...................     (236)      195
  Securities transactions in course of settlement, net......   (1,555)      684
                                                              -------   -------
  Net cash provided by (used in) investing activities.......      433    (1,346)
                                                              -------   -------
CASH FLOWS FROM FINANCING ACTIVITIES
  Contractholder fund deposits..............................    3,252     4,557
  Contractholder fund withdrawals and maturities............   (3,927)   (2,960)
  Dividends to parent company...............................     (675)     (620)
  Restructuring transactions (see Note 3)(1)................     (259)       --
                                                              -------   -------
  Net cash (used in) provided by financing activities.......   (1,609)      977
                                                              -------   -------
Net increase in cash........................................       20        35
Cash at beginning of period.................................      215       139
                                                              -------   -------
Cash at end of period.......................................  $   235   $   174
                                                              =======   =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
  Income taxes (paid) received..............................  $  (406)  $    18
                                                              =======   =======
</Table>

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

(1) SEE NOTES 3 AND 5 FOR NONCASH RESTRUCTURING TRANSACTIONS.

       See Notes to Interim Condensed Consolidated Financial Statements.
                                        6
<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

          NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                  (UNAUDITED)

1.  BASIS OF PRESENTATION

     At June 30, 2005, The Travelers Insurance Company ("TIC," together with its
subsidiaries, the "Company"), was a wholly-owned subsidiary of Citigroup
Insurance Holding Corporation ("CIHC"), an indirect wholly-owned subsidiary of
Citigroup Inc. ("Citigroup"). On January 31, 2005, Citigroup announced its
intention to sell (the "sale") TIC and certain other domestic and international
insurance businesses (the "Life Insurance and Annuities Businesses") to MetLife,
Inc. ("MetLife"). The sale closed on July 1, 2005. See Notes 3 and 9. The
interim condensed consolidated financial statements of the Company and the notes
thereto are prepared in conformity with accounting principles generally accepted
in the United States of America ("GAAP") and are unaudited.

     The primary insurance subsidiaries of the Company are TIC and its
subsidiary, The Travelers Life and Annuity Company ("TLAC"). The unaudited
interim condensed consolidated financial statements of the Company include TIC
and its insurance and non-insurance entities on a fully consolidated basis.
Intercompany transactions and balances have been eliminated. The Company
consolidates entities deemed to be variable interest entities ("VIE") when the
Company is determined to be the primary beneficiary.

     The Primerica Life Insurance Company and its subsidiaries ("Primerica"),
formerly a fully consolidated subsidiary of the Company, was distributed to CIHC
on June 30, 2005 in connection with the sale. Primerica is reported in
discontinued operations for all periods presented. See Note 4.

     The preparation of financial statements in conformity with GAAP requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
benefits and expenses during the reporting period. Actual results could differ
from those estimates.

     The unaudited interim condensed consolidated financial statements reflect
all normal recurring adjustments necessary for a fair presentation of results
for the periods reported. The accompanying unaudited interim condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and related notes included in TIC's Annual
Report on Form 10-K for the year ended December 31, 2004 ("Form 10-K") filed
with the Securities and Exchange Commission ("SEC"). The condensed consolidated
balance sheet at December 31, 2004 was derived from the audited balance sheet
included in the Form 10-K. Certain financial information that is normally
included in annual financial statements prepared in accordance with GAAP, but is
not required for interim reporting purposes, has been condensed or omitted.
Certain prior year amounts have been reclassified to conform to the 2005
presentation. Interim results are not necessarily indicative of future
performance.

2.  ACCOUNTING STANDARDS

  CHANGES IN ACCOUNTING PRINCIPLES

  Accounting and Reporting by Insurance Enterprises for Certain Nontraditional
  Long-Duration Contracts and for Separate Accounts

     On January 1, 2004, the Company adopted the Accounting Standards Executive
Committee of the American Institute of Certified Public Accountants Statement of
Position 03-1, "Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long-Duration Contracts and for Separate Accounts" ("SOP 03-1").
The main components of SOP 03-1 provide guidance on accounting and reporting by
insurance enterprises for separate account presentation, accounting for an
insurer's interest in a separate account, transfers to a separate account,
valuation of certain liabilities, contracts with death or

                                        7
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

  NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                  (UNAUDITED)

other benefit features, contracts that provide annuitization benefits, and sales
inducements to contract holders.

     The following summarizes the more significant aspects of the Company's
adoption of SOP 03-1, effective January 1, 2004:

          Separate Account Presentation.  SOP 03-1 requires separate account
     products to meet certain criteria in order to be treated as separate
     account products. For products not meeting the specified criteria, these
     assets and liabilities are included in the reporting entities' general
     account.

          The Company's adoption of SOP 03-1 resulted in the consolidation on
     the Company's balance sheet at January 1, 2004 of approximately $500
     million of investments previously held in separate and variable account
     assets and approximately $500 million of contractholder funds previously
     held in separate and variable account liabilities.

          Variable Annuity Contracts with Guaranteed Minimum Death Benefit
     Features.  For variable annuity contracts with guaranteed minimum death
     benefit ("GMDB") features, SOP 03-1 requires the reporting entity to
     categorize the contract as either an insurance or investment contract based
     upon the significance of mortality or morbidity risk. SOP 03-1 provides
     explicit guidance for calculating a reserve for insurance contracts, and
     provides that the reporting entity does not hold reserves for investment
     contracts (i.e., there is no significant mortality risk).

          The Company determined that the mortality risk on its GMDB features
     was not a significant component of the overall variable annuity product,
     and accordingly continued to classify these products as investment
     contracts. Prior to the adoption of SOP 03-1, the Company held a reserve of
     approximately $8 million to cover potential GMDB exposure. This reserve was
     released during the first quarter of 2004 as part of the implementation of
     SOP 03-1. The Company evaluates new issues of variable products to
     determine whether mortality risk on GMDB features is insignificant.

          Reserving for Universal Life and Variable Universal Life
     Contracts.  SOP 03-1 requires that a reserve, in addition to the account
     balance, be established for certain insurance benefit features provided
     under universal life ("UL") and variable universal life ("VUL") products if
     the amounts assessed against the contract holder each period for the
     insurance benefit feature are assessed in a manner that is expected to
     result in profits in earlier years and losses in subsequent years from the
     insurance benefit function.

          The Company's UL and VUL products were reviewed to determine whether
     an additional reserve is required under SOP 03-1. The Company determined
     that SOP 03-1 applied to some of its UL and VUL contracts with these
     features and established an additional reserve of approximately $1 million.

          Sales Inducements to Contract Holders.  SOP 03-1 provides,
     prospectively, that sales inducements provided to contract holders meeting
     certain criteria are capitalized and amortized over the expected life of
     the contract as a component of benefit expense. During the first six months
     of 2005 and 2004, the Company capitalized sales inducements of
     approximately $33.7 million and $19.6 million, respectively, in accordance
     with SOP 03-1. These inducements relate to bonuses on certain products
     offered by the Company. For the three and six months ended June 30, 2005
     and 2004, amortization of these capitalized amounts was insignificant.

  Consolidation of Variable Interest Entities

     On January 1, 2004, the Company adopted Financial Accounting Standards
Board ("FASB") Interpretation No. 46, "Consolidation of Variable Interest
Entities -- An Interpretation of ARB No. 51" ("FIN 46") (revised December 2003,
"FIN 46-R"), which includes substantial changes from the original
                                        8
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

  NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                  (UNAUDITED)

FIN 46. Included in these changes, the calculation of expected losses and
expected residual returns has been altered to reduce the impact of decision
maker and guarantor fees in the calculation of expected residual returns and
expected losses. In addition, the definition of a variable interest has been
changed in the revised guidance. The adoption of the provisions of FIN 46-R on
January 1, 2004 did not require the Company to consolidate any additional VIEs
that were not previously consolidated. See Note 6.

     FIN 46 and FIN 46-R change the method of determining whether certain
entities, including securitization entities, should be included in the Company's
condensed consolidated financial statements. An entity is subject to FIN 46 and
FIN 46-R and is called a VIE if it has (1) equity that is insufficient to permit
the entity to finance its activities without additional subordinated financial
support from other parties, or (2) equity investors that cannot make significant
decisions about the entity's operations or that do not absorb the expected
losses or receive the expected returns of the entity. All other entities are
evaluated for consolidation under Statement of Financial Accounting Standards
("SFAS") No. 94, "Consolidation of All Majority-Owned Subsidiaries" ("SFAS 94").
A VIE is consolidated by its primary beneficiary, which is the party involved
with the VIE that has a majority of the expected losses or a majority of the
expected residual returns or both.

  FUTURE APPLICATION OF ACCOUNTING STANDARDS

  Other-Than-Temporary Impairments of Certain Investments

     In June 2005, the FASB completed its review of Emerging Issues Task Force
("EITF") Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments" ("EITF 03-1"). EITF 03-1 provides accounting
guidance regarding the determination of when an impairment of debt and
marketable equity securities and investments accounted for under the cost method
should be considered other-than-temporary and recognized in income. EITF 03-1
also requires certain quantitative and qualitative disclosures for debt and
marketable equity securities classified as available-for-sale or
held-to-maturity under SFAS No. 115, "Accounting for Certain Investments in Debt
and Equity Securities" ("SFAS 115"), that are impaired at the balance sheet date
but for which an other-than-temporary impairment has not been recognized. The
FASB decided not to provide additional guidance on the meaning of
other-than-temporary impairment but will issue a FASB Staff Position Paper
("FSP") 115-1, "The Meaning of Other-Than-Temporary Impairment and its
Application to Certain Investments" ("FSP 115-1"), superseding EITF 03-1 and
EITF Topic D-44, "Recognition of Other-Than-Temporary Impairment on the Planned
Sale of a Security Whose Cost Exceeds Fair Value" ("Topic D-44"). FSP 115-1 will
nullify the accounting guidance on the determination of whether an investment is
other-than-temporarily impaired as set forth in EITF 03-1. FSP 115-1 will be
effective for other-than-temporary impairment analysis conducted in periods
beginning after September 15, 2005. The Company has complied with the disclosure
requirements of EITF 03-1, which were effective December 31, 2003 and remain in
effect.

  Accounting Changes and Error Corrections

     In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections, a replacement of Accounting Principles Board ("APB") Opinion No. 20
and SFAS No. 3" ("SFAS 154"). SFAS 154 is a result of a broader effort by the
FASB to converge standards with the International Accounting Standards Board.
The statement requires retrospective application to prior periods' financial
statements for a voluntary change in accounting principle unless it is
impracticable. It also requires that a change in method of depreciation,
amortization, or depletion for long-lived, nonfinancial assets be accounted for
as a change in accounting estimate rather than a change in accounting principle.
SFAS 154 is effective for accounting changes and corrections of errors made in
fiscal years beginning after

                                        9
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

  NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                  (UNAUDITED)

December 15, 2005. SFAS 154 is not expected to have a material impact on the
Company's condensed consolidated financial statements.

  Stock-Based Compensation

     In December 2004, the FASB issued SFAS No. 123 (Revised 2004), "Share-Based
Payment" ("SFAS 123-R"), which replaces the existing SFAS 123 and supersedes APB
Opinion No. 25, "Accounting for Stock Issued to Employees." SFAS 123-R requires
companies to measure and record compensation expense for stock options and other
share-based payments based on the instruments' fair value. SFAS 123-R is
effective for interim and annual reporting periods beginning after June 15,
2005. In April 2005, the SEC issued a final ruling allowing public companies to
defer adoption of SFAS 123-R until the beginning of the first fiscal year
following June 15, 2005. At the close of the sale on July 1, 2005, all
outstanding options and awards of Citigroup stock held by the Company's
employees vested. All related stock option expense was recorded at the time of
vesting by Citigroup. As such, the Company does not expect the adoption of SFAS
123-R to have any impact on its financial statements.

3.  RESTRUCTURING TRANSACTIONS

     As described in Note 1, on January 31, 2005, Citigroup announced its
intention to sell its Life Insurance and Annuities Businesses to MetLife. Prior
to the sale, certain restructuring transactions were required pursuant to the
Acquisition Agreement. The sale closed on July 1, 2005. See Note 9. The
following transfers to CIHC occurred on June 30, 2005:

          1. All TIC's membership in Keeper Holdings LLC, which holds an
     interest in CitiStreet LLC;

          2. All TIC's shares of Citigroup Series YYY and YY preferred stock;

          3. All TIC's shares of American Financial Life Insurance Company
     stock;

          4. All TIC's shares of Primerica stock (see Note 4);

          5. All TIC's obligations in the amount of $105 million and the related
     deferred tax assets of $37 million and cash in the amount of $68 million
     associated with the Connecticut River Plaza lease;

          6. All owned intellectual property and all trademarks used in
     connection with products offered only by or through the Company. This
     includes, but is not limited to, the "umbrella" trademark and umbrella
     design trademark, and any trademarks which include the terms "citi,"
     "Citi," the arc design and the blue wave design;

          7. All TIC's net obligations in the amount of $443 million related to
     non-qualified employee benefit plans (including retiree welfare, pension,
     long-term disability, workers compensation and deferred compensation
     obligations) and associated assets consisting of $191 million in cash, and
     other assets, including a deferred tax asset, totaling $252 million; and

          8. All TIC's obligations and rights related to future gains and losses
     under all policies providing long-term care benefits.

     The State of Connecticut Insurance Department (the "Department") approved
the extraordinary dividend of all TIC's ownership interests and obligations as
included in items 1 through 6, and 8 as set forth above. Restructuring
transaction item number 7, as set forth above, was accounted for as an
asset/liability transfer, and did not require approval from the Department. The
accompanying interim condensed consolidated financial statements include the
results of operations related to the aforementioned restructuring transactions
through the date of distribution.

                                        10
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

  NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                  (UNAUDITED)

4.  DISCONTINUED OPERATIONS

     As described in Note 3, certain restructuring transactions were completed
prior to the close of the sale on July 1, 2005. In accordance with the
Acquisition Agreement, Primerica, a former operating segment of the Company, was
distributed via a dividend to CIHC on June 30, 2005.

     In accordance with SFAS No. 144 "Accounting for the Impairment or Disposal
of Long-Lived Assets" ("SFAS 144"), the distribution of Primerica by dividend to
CIHC qualifies as a disposal by means other than a sale. As such, Primerica was
treated as held for use (i.e. continuing operations) until the date of disposal
and, upon the date of disposal, the results from the operations were
reclassified as discontinued operations for all periods presented. Upon the
disposal of Primerica, the remaining operations of the Company are reported as a
single operating segment.

     The following summarizes Primerica's financial information:

<Table>
<Caption>
                                                           THREE MONTHS    SIX MONTHS
                                                               ENDED          ENDED
                                                             JUNE 30,       JUNE 30,
                                                           -------------   -----------
                                                           2005    2004    2005   2004
                                                           -----   -----   ----   ----
                                                                 ($ IN MILLIONS)
<S>                                                        <C>     <C>     <C>    <C>
Total Revenues...........................................  $442    $436    $900   $879
                                                           ====    ====    ====   ====
Income from discontinued operations......................  $179    $182    $361   $356
Provision for income taxes...............................    61      62     121    112
                                                           ----    ----    ----   ----
Income from discontinued operations, net of income
  taxes..................................................  $118    $120    $240   $244
                                                           ====    ====    ====   ====
</Table>

          The following is a summary of Primerica's assets and liabilities at
     December 31, 2004.

<Table>
<Caption>
                                                              ($ IN MILLIONS)
<S>                                                           <C>
Assets
------
Cash........................................................      $    31
Investments.................................................        5,891
Deferred acquisition costs..................................        2,177
Reinsurance recoverables....................................          783
Separate and variable accounts..............................          584
Other assets................................................          553
                                                                  -------
                                                                  $10,019
                                                                  =======


Liabilities
-----------
Future policy benefits and claims...........................      $ 3,545
Deferred federal income taxes...............................          849
Separate and variable accounts..............................          584
Other liabilities...........................................          767
                                                                  -------
                                                                  $ 5,745
                                                                  =======
</Table>

5.  SHAREHOLDER'S EQUITY

     Statutory capital and surplus of TIC was $7.9 billion at December 31, 2004.
Under the Insurance Law of the State of Connecticut, TIC's state of domicile,
TIC and TLAC are each permitted, without

                                        11
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

  NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                  (UNAUDITED)

prior insurance regulatory clearance, to pay a shareholder dividend to their
respective parents as long as the amount of such dividend, when aggregated with
all other dividends in the preceding 12 months, does not exceed the greater of
(i) 10% of its surplus to policyholders as of the immediately preceding calendar
year, or (ii) its statutory net gain from operations for the immediately
preceding calendar year. TIC and TLAC will each be permitted to pay a cash
dividend in excess of the greater of such two amounts only if it files notice of
its declaration of such a dividend and the amount thereof with the Connecticut
Commissioner of Insurance ("Commissioner") and the Commissioner does not
disapprove the payment within 30 days after notice or until the Commissioner has
approved the dividend, whichever is sooner. In addition, any dividend that
exceeds earned surplus (unassigned funds, reduced by 25% of unrealized
appreciation in value or revaluation of assets or unrealized profits on
investments) as of the last filed annual statutory statement requires insurance
regulatory approval. Under Connecticut Insurance Law, the Commissioner has broad
discretion in determining whether the financial condition of a stock life
insurance company would support the payment of such dividends to its
stockholders.

     The maximum amount of the dividend which could be paid by TIC to its parent
in 2005, without prior approval of the Department, was $908 million, depending
on the amount and timing of the payments. The Connecticut Insurance Law requires
prior approval for any dividends for a period of two years following a change in
control. As a result of the acquisition of TIC and TLAC by MetLife, under
Connecticut Insurance Law all dividend payments by TIC and TLAC through June 30,
2007 require prior approval of the Commissioner.

     TIC paid cash dividends to CIHC of $302.5 million, $147.5 million and
$225.0 million on January 3, 2005, March 30, 2005 and June 30, 2005,
respectively. As discussed in Note 3, in conjunction with the Acquisition
Agreement, several restructuring transactions requiring regulatory approval were
completed prior to the sale. TIC received regulatory approval from the
Department to complete the restructuring transactions via dividend, and to pay
its second quarter dividend plus the dividends related to its shares of
Citigroup Series YYY preferred stock. The total amount of these dividends, made
on June 30, 2005, was $4.5 billion on a statutory accounting basis.

     In connection with the restructuring transactions, the Company's retained
earnings, additional paid-in capital ("APIC") and nonowner sources were changed
as follows:

<Table>
<Caption>
                                                          RETAINED             NONOWNER
                                                          EARNINGS    APIC     SOURCES
                                                          --------   -------   --------
                                                                 ($ IN MILLIONS)
<S>                                                       <C>        <C>       <C>
RESTRUCTURING TRANSACTIONS
Keeper Holdings LLC.....................................  $   (26)   $    (8)   $  --
Citigroup Series YYY preferred stock....................       --     (2,225)      --
Citigroup Series YY preferred stock.....................       --       (596)      --
Stock of American Financial Life Insurance Company......      210       (218)      --
Stock of Primerica Life Insurance Company...............   (3,150)    (1,100)    (166)
Deferred tax liabilities YYY and YY preferred stock.....       --        974       --
Tax liabilities.........................................       --         78       --
                                                          -------    -------    -----
  TOTAL.................................................  $(2,966)   $(3,095)   $(166)
                                                          =======    =======    =====
</Table>

                                        12
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

  NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                  (UNAUDITED)

6.  INVESTMENTS

  FIXED MATURITIES

     The amortized cost and fair value of investments in fixed maturities were
as follows at:

<Table>
<Caption>
                                                            GROSS        GROSS
                                              AMORTIZED   UNREALIZED   UNREALIZED    FAIR
JUNE 30, 2005                                   COST        GAINS        LOSSES      VALUE
-------------                                 ---------   ----------   ----------   -------
                                                             ($ IN MILLIONS)
<S>                                           <C>         <C>          <C>          <C>
AVAILABLE FOR SALE:
  Mortgage-backed securities -- CMOs and
     pass-through securities................   $ 7,130      $  241        $ 10      $ 7,361
  U.S. Treasury securities and obligations
     of U.S. Government and government
     agencies and authorities...............     1,572         210          --        1,782
  Obligations of states, municipalities and
     political subdivisions.................       346          78          --          424
  Debt securities issued by foreign
     governments............................       538          63           1          600
  All other corporate bonds.................    23,068       1,266          79       24,255
  Other debt securities.....................     6,493         334          23        6,804
  Redeemable preferred stock................       143          47           2          188
                                               -------      ------        ----      -------
     Total Available For Sale...............   $39,290      $2,239        $115      $41,414
                                               =======      ======        ====      =======
</Table>

<Table>
<Caption>
                                                            GROSS        GROSS
                                              AMORTIZED   UNREALIZED   UNREALIZED    FAIR
DECEMBER 31, 2004                               COST        GAINS        LOSSES      VALUE
-----------------                             ---------   ----------   ----------   -------
                                                             ($ IN MILLIONS)
<S>                                           <C>         <C>          <C>          <C>
AVAILABLE FOR SALE:
  Mortgage-backed securities -- CMOs and
     pass-through securities................   $ 8,568      $  311        $ 9       $ 8,870
  U.S. Treasury securities and obligations
     of U.S. Government and government
     agencies and authorities...............     2,143         106         --         2,249
  Obligations of states, municipalities and
     political subdivisions.................       364          41          1           404
  Debt securities issued by foreign
     governments............................       847          81          1           927
  All other corporate bonds.................    25,603       1,466         40        27,029
  Other debt securities.....................     7,613         421         14         8,020
  Redeemable preferred stock................       176          41          1           216
                                               -------      ------        ---       -------
     Total Available For Sale...............   $45,314      $2,467        $66       $47,715
                                               =======      ======        ===       =======
</Table>

                                        13
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

  NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                  (UNAUDITED)

  AGING OF GROSS UNREALIZED LOSSES ON AVAILABLE FOR SALE

     The aging of gross unrealized losses on fixed maturity investments is as
follows:

<Table>
<Caption>
                                              TOTAL FIXED MATURITIES   TOTAL FIXED MATURITIES
                                                 IN AN UNREALIZED       WITH UNREALIZED LOSS
                                                  LOSS POSITION         TOTALING 20% OR MORE
                                              ----------------------   ----------------------
                                              AMORTIZED   UNREALIZED   AMORTIZED   UNREALIZED
JUNE 30, 2005                                   COST         LOSS        COST         LOSS
-------------                                 ---------   ----------   ---------   ----------
                                                              ($ IN MILLIONS)
<S>                                           <C>         <C>          <C>         <C>
Six months or less..........................   $4,480        $ 56         $58         $15
Greater than six months to nine months......    1,538          26          --          --
Greater than nine months to twelve months...      344           6          --          --
Greater than twelve months..................      867          27          --          --
                                               ------        ----         ---         ---
  Total.....................................   $7,229        $115         $58         $15
                                               ======        ====         ===         ===
</Table>

<Table>
<Caption>
                                              TOTAL FIXED MATURITIES   TOTAL FIXED MATURITIES
                                                 IN AN UNREALIZED       WITH UNREALIZED LOSS
                                                  LOSS POSITION         TOTALING 20% OR MORE
                                              ----------------------   ----------------------
                                              AMORTIZED   UNREALIZED   AMORTIZED   UNREALIZED
DECEMBER 31, 2004                               COST         LOSS        COST         LOSS
-----------------                             ---------   ----------   ---------   ----------
                                                              ($ IN MILLIONS)
<S>                                           <C>         <C>          <C>         <C>
Six months or less..........................   $4,435        $31         $   1       $  --
Greater than six months to nine months......    1,029         14            --          --
Greater than nine months to twelve months...      215          5            --          --
Greater than twelve months..................      597         16            --          --
                                               ------        ---         -----       -----
  Total.....................................   $6,276        $66         $   1       $  --
                                               ======        ===         =====       =====
</Table>

  NET REALIZED CAPITAL GAINS (LOSSES)

<Table>
<Caption>
                                                           FOR THE THREE    FOR THE SIX
                                                           MONTHS ENDED    MONTHS ENDED
                                                             JUNE 30,        JUNE 30,
                                                           -------------   -------------
                                                           2005    2004    2005    2004
                                                           -----   -----   -----   -----
                                                                  ($ IN MILLIONS)
<S>                                                        <C>     <C>     <C>     <C>
NET REALIZED CAPITAL GAINS (LOSSES) BY ASSET CLASS:
  Fixed maturities.......................................  $ 17    $(91)   $ 17    $(56)
  Equities...............................................     4       4      35      12
  Derivatives:
     Guaranteed minimum withdrawal benefit derivatives,
       net...............................................    (2)     13      (3)      8
     Other derivatives...................................   (48)     53     (33)     19
  Other..................................................     1      (4)     10       1
                                                           ----    ----    ----    ----
       Total.............................................  $(28)   $(25)   $ 26    $(16)
                                                           ====    ====    ====    ====
</Table>

                                        14
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

  NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                  (UNAUDITED)

  VARIABLE INTEREST ENTITIES

     The following table represents the carrying amounts and classification of
consolidated assets that are collateral for VIE obligations. The Company's VIEs
are a collateralized debt obligation and a real estate joint venture.

<Table>
<Caption>
                                                           JUNE 30, 2005      DECEMBER 31, 2004
                                                          ----------------   --------------------
                                                                      ($ IN MILLIONS)
<S>                                                       <C>                <C>
Investments.............................................        $355                 $386
Cash....................................................          25                    9
Other...................................................           1                    2
                                                                ----                 ----
Total assets of consolidated VIEs.......................        $381                 $397
                                                                ====                 ====
</Table>

     The debt holders of these VIEs have no recourse to the Company. The
Company's maximum exposure to loss is limited to its investment of approximately
$8 million.

     The Company regularly becomes involved with VIEs through its investment
activities. This involvement is generally restricted to minor passive debt and
equity investments.

7.  DEPOSIT FUNDS AND RESERVES

     At June 30, 2005 and December 31, 2004, the Company had $44.1 billion and
$48.2 billion of life and annuity deposit funds and reserves, respectively, as
follows:

<Table>
<Caption>
                                                           JUNE 30, 2005      DECEMBER 31, 2004
                                                          ----------------   --------------------
                                                                      ($ IN MILLIONS)
<S>                                                       <C>                <C>
Subject to discretionary withdrawal:
  With fair value adjustments...........................      $ 7,430              $ 7,541
  Subject to surrender charges..........................        5,143                4,852
  Surrenderable without charge..........................        7,760                8,105
                                                              -------              -------
  Total.................................................      $20,333              $20,498
Not subject to discretionary withdrawal.................       23,775               27,730
                                                              -------              -------
  Total.................................................      $44,108              $48,228
                                                              =======              =======
</Table>

     There are $497 million and $519 million of life insurance reserves included
in surrenderable without charge at June 30, 2005 and December 31, 2004,
respectively. The life insurance risks would have to be underwritten again if
transferred to another carrier, which is considered a significant deterrent for
long-term policyholders. Insurance liabilities that are surrendered or withdrawn
from the Company are reduced by outstanding policy loans and related accrued
interest prior to payout.

                                        15
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

  NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                  (UNAUDITED)

     Included in contractholder funds and in the preceding table are guaranteed
investment contracts ("GICs") totaling $13.6 billion. The scheduled maturities
for these GICs are as follows:

<Table>
<Caption>
                                               FIXED RATE GIC   VARIABLE RATE GIC    TOTAL
                                               --------------   -----------------   -------
                                                             ($ IN MILLIONS)
<S>                                            <C>              <C>                 <C>
2005 remaining...............................      $  551            $2,310         $ 2,861
2006.........................................       1,832             1,570           3,402
2007.........................................       1,538                --           1,538
2008.........................................       1,397                --           1,397
2009.........................................       1,444                --           1,444
2010 and thereafter..........................       2,985                --           2,985
                                                   ------            ------         -------
  Total......................................      $9,747            $3,880         $13,627
                                                   ======            ======         =======
</Table>

8.  COMMITMENTS AND CONTINGENCIES

  LITIGATION AND REGULATORY PROCEEDINGS

     In August 1999, an amended putative class action complaint captioned Lisa
Macomber, et al. vs. Travelers Property Casualty Corporation, et al. was filed
in New Britain, Connecticut Superior Court against TLAC, Travelers Equity Sales,
Inc. and certain former affiliates. The amended complaint alleges Travelers
Property Casualty Corporation, a former affiliate, purchased structured
settlement annuities from TLAC and spent less on the purchase of those
structured settlement annuities than agreed with claimants; and that commissions
paid to brokers of structured settlement annuities, were paid, in part, to
Travelers Property Casualty Corporation. The amended complaint was dismissed
and, following an appeal by the plaintiff in September 2002, the Connecticut
Supreme Court reversed the dismissal of several of the plaintiff's claims. On
May 26, 2004, the Connecticut Superior Court certified a nationwide class action
involving the following claims: violation of the Connecticut Unfair Trade
Practice Statute, unjust enrichment and civil conspiracy. On June 15, 2004, the
defendants appealed the Connecticut Superior Court's May 26, 2004 class
certification order.

     A former registered representative of Tower Square Securities, Inc. ("Tower
Square"), a broker-dealer subsidiary of TIC, is alleged to have defrauded
individuals by diverting funds for his personal use. In June 2005, the SEC
issued a formal order of investigation with respect to Tower Square and served
Tower Square with a subpoena. The Securities and Business Investments Division
of the Connecticut Department of Banking and the National Association of
Securities Dealers ("NASD") are also reviewing this matter. Tower Square intends
to fully cooperate with the SEC, the NASD and the Department of Banking. One
arbitration matter was commenced in June 2005 against Tower Square and the other
unaffiliated broker-dealers with whom the registered representative was formerly
registered. It is reasonably possible that other matters will be brought
regarding this matter. Tower Square intends to defend itself vigorously in all
such cases.

     In 2003 and 2004, several issues in the mutual fund and variable insurance
product industries have come under the scrutiny of federal and state regulators.
Like many other companies in our industry, the Company has received a request
for information from the SEC and a subpoena from the New York Attorney General
regarding market timing and late trading. During 2004, the SEC requested
additional information about the Company's variable product operations on market
timing, late trading and revenue sharing, and the SEC, the NASD and the New York
Insurance Department have made inquiries into these issues and other matters
associated with the sale and distribution of insurance products. In addition,
like many insurance companies and agencies, in 2004 and 2005 the Company
received inquiries from

                                        16
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

  NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
                                  (UNAUDITED)

certain state Departments of Insurance regarding producer compensation and
bidding practices. The Company is cooperating fully with all of these requests
and is not able to predict their outcomes.

     In addition, the Company is a defendant or co-defendant in various other
litigation matters in the normal course of business. These include civil
actions, arbitration proceedings and other matters arising in the normal course
of business out of activities as an insurance company, a broker and dealer in
securities or otherwise.

     In the opinion of the Company's management, the ultimate resolution of
these legal and regulatory proceedings would not be likely to have a material
adverse effect on the Company's consolidated financial condition or liquidity,
but, if involving monetary liability, may be material to the Company's operating
results for any particular period.

  OTHER

     TIC is a member of the Federal Home Loan Bank of Boston (the "Bank"), and
in this capacity has entered into a number of funding agreements (the "funding
agreements") with the Bank where the Bank has been granted a blanket lien on
TIC's residential mortgages and mortgage-backed securities to collateralize
TIC's obligations under the funding agreements. TIC maintains control of these
assets, and may use, commingle, encumber or dispose of any portion of the
collateral as long as there is no event of default and the remaining qualified
collateral is sufficient to satisfy the collateral maintenance level. The
funding agreements and the related security agreement provide that upon any
event of default, the Bank's recovery is limited to the amount of TIC's
liability under the outstanding funding agreements. The amount of the Company's
liability for funding agreements with the Bank as of June 30, 2005 is $1.125
billion, included in contractholder funds. The Company holds $69.7 million of
common stock of the Bank, included in Investments.

     TIC has provided a guarantee on behalf of Citicorp International Life
Insurance Company, Ltd. ("CILIC"), an affiliate. This guarantee takes effect if
CILIC cannot pay claims because of insolvency, liquidation or rehabilitation.
The agreement was terminated as of December 31, 2004, but termination does not
affect policies previously guaranteed. Life insurance coverage in force under
this guarantee at June 30, 2005 is $466 million. The Company does not hold any
collateral related to this guarantee.

9.  SUBSEQUENT EVENT -- METLIFE, INC. TRANSACTION

     On July 1, 2005, Citigroup completed the sale of the Life Insurance and
Annuities Businesses to MetLife pursuant to an Acquisition Agreement. In the
normal course of accounting for acquisitions, purchase accounting ("PGAAP")
adjustments will be made to the assets and liabilities of the Company during the
third quarter of 2005. These PGAAP adjustments will mark to market the assets
and liabilities of the Company as of the closing date of the sale. At this time
the Company cannot predict the effect the PGAAP adjustments may have on the
financial statements of the Company, although such adjustments may be material.

     Consistent with MetLife's business plan filed with the Department, the
Company will generally phase out the products that it currently issues by the
end of 2006. This phase out of the products will likely result in fewer assets
and liabilities reported by the Company.

                                        17
<PAGE>

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

     Management's narrative analysis of the results of operations of The
Travelers Insurance Company ("TIC," together with its subsidiaries, the
"Company"), is presented in lieu of Management's Discussion and Analysis of
Financial Condition and Results of Operations ("MD&A"), pursuant to General
Instruction H(2)(a) of Form 10-Q. This MD&A should be read in conjunction with
the MD&A included in TIC's Annual Report on Form 10-K for the year ended
December 31, 2004.

     TIC's Annual Reports on Form 10-K, its Quarterly Reports on Form 10-Q, and
all amendments to these reports are available at www.metlife.com by selecting
"Investor Relations." The information found on the website is not part of this
or any other report filed with or furnished to the Securities and Exchange
Commission ("SEC").

     At June 30, 2005, TIC was a wholly-owned subsidiary of Citigroup Insurance
Holding Corporation ("CIHC"), an indirect wholly-owned subsidiary of Citigroup
Inc. ("Citigroup"). On January 31, 2005, Citigroup announced its intention to
sell (the "sale") TIC and certain other domestic and international insurance
businesses (the "Life Insurance and Annuities Businesses") to MetLife, Inc.
("MetLife"). The sale closed on July 1, 2005. See "-- Subsequent Event."

     Pursuant to the Acquisition Agreement between Citigroup and MetLife, the
Primerica Life Insurance Company and its subsidiaries ("Primerica"), formerly a
fully consolidated subsidiary of TIC, was distributed to CIHC on June 30, 2005.
Primerica is now reported in discontinued operations for all periods presented.
The remaining operations of the Company are reported as one operating segment.

     The Company's core offerings include retail annuities, individual life
insurance, corporate-owned life insurance ("COLI") and institutional annuity
insurance products distributed by TIC and The Travelers Life and Annuity Company
("TLAC") principally under the Travelers Life & Annuity name. The Company has a
license from The St. Paul Travelers Companies, Inc. to use the names "Travelers
Life & Annuity," "The Travelers Insurance Company," "The Travelers Life and
Annuity Company" and related names in connection with the Company's business.
Among the range of retail annuity products offered are fixed and variable
deferred annuities and payout annuities. Individual life insurance products
offered include term, universal and variable life insurance. The COLI product is
a variable universal life product distributed through independent specialty
brokers. The institutional annuity products include institutional pensions,
including guaranteed investment contracts ("GICs"), payout annuities, group
annuities sold to employer-sponsored retirement and savings plans and structured
settlements and funding agreements.

RESULTS OF OPERATIONS

<Table>
<Caption>
                                                               FOR THE THREE
                                                               MONTHS ENDED
                                                                 JUNE 30,
                                                              ---------------
                                                               2005     2004
                                                              ------   ------
                                                              ($ IN MILLIONS)
<S>                                                           <C>      <C>
Revenues....................................................  $1,248   $1,055
Insurance benefits and interest credited....................     665      600
Operating expenses..........................................     223      141
                                                              ------   ------
  Income from continuing operations before income taxes.....     360      314
Income taxes................................................      94       91
                                                              ------   ------
Income from continuing operations...........................     266      223
Discontinued operations, net of income taxes................     118      120
                                                              ------   ------
Net income..................................................  $  384   $  343
                                                              ======   ======
</Table>

     Income from continuing operations of $266 million in the second quarter of
2005 increased 19% from $223 million in the second quarter of 2004. The increase
reflects higher net investment income ("NII") and higher fees from asset-based
charges related to increased account balances ("business volumes"),

                                        18
<PAGE>

partially offset by higher expenses due to an increase in the amortization of
deferred acquisition costs ("DAC"), from the business volume increase and
expenses related to net transaction costs of a statutory reinsurance transaction
with an affiliate. See "-- Outlook."

     Revenues were $1.2 billion and $1.1 billion for the three months ended June
30, 2005 and 2004, respectively. This increase was driven by a $117 million
increase in NII from higher investment yields, which were 7.29% and 6.36% for
the three months ended June 30, 2005 and 2004, respectively, and a larger
invested asset base related to business volume growth over the previous twelve
months. The increase in the investment yields was due primarily to a one-time
real estate joint venture transaction totaling $80 million.

     The majority of the annuity business and a substantial portion of the life
business written by the Company are accounted for as investment contracts;
therefore the deposits collected are reported as liabilities. Deposits represent
an operating statistic which management of the Company uses to manage the life
insurance and annuities operations, and may not be comparable to similarly
captioned measurements used by other life insurance companies. The following
table shows net written premiums and deposits by product type for each of the
quarters ended June 30, 2005 and 2004.

<Table>
<Caption>
                                                        2005                  2004
                                                 -------------------   -------------------
                                                 PREMIUMS   DEPOSITS   PREMIUMS   DEPOSITS
                                                 --------   --------   --------   --------
                                                              ($ IN MILLIONS)
<S>                                              <C>        <C>        <C>        <C>
Retail annuities
  Fixed........................................    $ --      $  146      $ --      $  134
  Variable.....................................      --       1,112        --       1,254
  Individual payout............................      35          14        10           8
                                                   ----      ------      ----      ------
Total retail annuities.........................      35       1,272        10       1,396
Institutional annuities........................     109       1,064       127       2,001
Individual life insurance:
  Direct periodic premiums & deposits..........      34         172        35         170
  Single premium deposits......................      --         146        --         173
  Reinsurance..................................     (14)        (32)      (13)        (25)
                                                   ----      ------      ----      ------
Total individual life insurance................      20         286        22         318
Other..........................................       8          --         9          --
                                                   ----      ------      ----      ------
     Total.....................................    $172      $2,622      $168      $3,715
                                                   ====      ======      ====      ======
</Table>

     Retail annuity deposits of $1.3 billion in the second quarter of 2005
decreased 9% from the second quarter of 2004, reflecting competitive pressures
and uncertainty relating to the announced acquisition of the Company by MetLife.
Retail annuity account balances were $37.8 billion at June 30, 2005, up from
$34.7 billion at June 30, 2004. This increase reflects equity market growth in
variable annuity investments of $1.7 billion subsequent to June 30, 2004, and
$1.8 billion of net sales over the previous twelve months.

     Institutional annuities deposits (excluding the Company's employee pension
plan deposits) decreased 47% in the second quarter of 2005 to $1.1 billion from
the comparable period of 2004, reflecting decreased GIC sales primarily due to
the absence of medium term note production in the 2005 quarter versus second
quarter 2004 production of $557 million. In addition, other fixed GIC production
of $146 million was down from $512 million in the comparable period of 2004 as
customers began to address diversification issues within their portfolios driven
by the announced acquisition of the Company by MetLife. Institutional annuity
account balances and benefits reserves remained level at $26.5 billion at June
30, 2005, in comparison to June 30, 2004. The decline in fixed GIC account
balance and benefit reserves from decreased sales was offset by growth within
structured settlements.

     Deposits for the individual life insurance business for the second quarter
of 2005 decreased 10% to $286 million from the 2004 second quarter, primarily
due to a decrease of $27 million in universal life

                                        19
<PAGE>

single premium sales, reflecting a slowdown in sales from a single premium
product introduced in the first quarter of 2004. Life insurance in-force was
$105.8 billion at June 30, 2005, up from $101.0 billion at December 31, 2004.

     Insurance benefits and interest credited increased 11% to $665 million for
the three months ended June 30, 2005 from $600 million in the prior year period,
primarily related to higher business volumes over the previous twelve months.

     In the second quarter of 2005, operating expenses increased 58% to $223
million from $141 million in the prior year quarter, primarily due to DAC
amortization and expenses related to net transaction costs of a statutory
reinsurance transaction with an affiliate, which began in the fourth quarter of
2004, totaling $40 million. See "-- Outlook." The amortization of capitalized
DAC is a significant component of expenses and totaled $122 million and $89
million for the three months ended June 30, 2005 and 2004, respectively. The
increase in amortization was primarily driven by business volume growth and an
increased amortization rate resulting from adjustments made in the prior year.

<Table>
<Caption>
                                                                FOR THE SIX
                                                               MONTHS ENDED
                                                                 JUNE 30,
                                                              ---------------
                                                               2005     2004
                                                              ------   ------
                                                              ($ IN MILLIONS)
<S>                                                           <C>      <C>
Revenues....................................................  $2,435   $2,160
Insurance benefits and interest credited....................   1,297    1,197
Operating expenses..........................................     397      288
                                                              ------   ------
  Income from continuing operations before income taxes.....     741      675
Income taxes................................................     205      171
                                                              ------   ------
Income from continuing operations...........................     536      504
Discontinued operations, net of income taxes................     240      244
                                                              ------   ------
Net income..................................................  $  776   $  748
                                                              ======   ======
</Table>

     Income from continuing operations for the six months ended June 30, 2005
increased 6% to $536 million from $504 million from the prior year period,
primarily related to higher business volumes, higher NII and higher fees from
asset-based charges related to business volume increases. These increases were
partially offset by insurance benefits and interest credited, higher DAC
amortization and tax benefits related to the dividends received deduction of $12
million in 2005 versus $23 million in 2004.

     Revenues were $2.4 billion and $2.2 billion for the six months ended June
30, 2005 and 2004, respectively. This increase was driven by a $129 million
increase in NII from higher investment yields, which were 6.80% and 6.54% for
the six months ended June 30, 2005 and 2004, respectively, and a larger invested
asset base related to business volume growth over the previous twelve months.
The increase in the investment yields was due primarily to a one-time real
estate joint venture transaction totaling $80 million in the second quarter of
2005.

                                        20
<PAGE>

     The majority of the annuity business and a substantial portion of the life
business written by the Company are accounted for as investment contracts, such
that the premiums are considered deposits and are not included in revenues.
Deposits represent an operating statistic which management of the Company uses
to manage the life insurance and annuities operations, and may not be comparable
to similarly captioned measurements used by other life insurance companies. The
following table shows net written premiums and deposits by product type for the
six months ended June 30, 2005 and 2004.

<Table>
<Caption>
                                                        2005                  2004
                                                 -------------------   -------------------
                                                 PREMIUMS   DEPOSITS   PREMIUMS   DEPOSITS
                                                 --------   --------   --------   --------
                                                              ($ IN MILLIONS)
<S>                                              <C>        <C>        <C>        <C>
Retail annuities
  Fixed........................................    $ --      $  322      $ --      $  282
  Variable.....................................      --       2,350        --       2,471
  Individual payout............................      62          33        16          16
                                                   ----      ------      ----      ------
Total retail annuities.........................      62       2,705        16       2,769
Institutional annuities........................     206       2,080       245       3,460
Individual life insurance:
  Direct periodic premiums & deposits..........      67         471        70         424
  Single premium deposits......................      --         343        --         342
  Reinsurance..................................     (27)        (64)      (25)        (51)
                                                   ----      ------      ----      ------
Total individual life insurance................      40         750        45         715
Other..........................................      17          --        17          --
                                                   ----      ------      ----      ------
     Total.....................................    $325      $5,535      $323      $6,944
                                                   ====      ======      ====      ======
</Table>

     Retail annuity deposits of $2.7 billion in the first six months of 2005
decreased 2% from the prior period. The decrease was primarily driven by
competitive pressures and uncertainty relating to the announced acquisition of
the Company by MetLife.

     Institutional annuity deposits (excluding the Company's employee pension
plan deposits) of $2.1 billion in the first six months of 2005 were down 40%
from $3.5 billion in the comparable period of 2004, primarily reflecting
decreased GIC sales, and the absence of medium term note production in 2005
versus $946 million in the first six months of 2004. In addition, other fixed
GIC production of $361 million was down from $688 million in the comparable
period of 2004 as customers began to address diversification issues within their
portfolios driven by the announced acquisition of the Company by MetLife.

     Deposits for the life insurance business in the first six months of 2005
were up 5% from the comparable period of 2004, driven by higher direct periodic
sales.

     For the first six months of 2005, operating expenses increased 38% from the
comparable prior year six month period, primarily due to an increase of $60
million of DAC amortization.

SUBSEQUENT EVENT

     On July 1, 2005 MetLife completed the acquisition of the Company. In the
normal course of accounting for acquisitions, purchase accounting ("PGAAP")
adjustments will be made to the assets and liabilities of the Company during the
third quarter of 2005. These PGAAP adjustments will mark to market the assets
and liabilities of the Company as of the closing date of the sale. At this time,
the Company cannot predict the effect the PGAAP adjustments may have on the
financial statements of the Company, although such adjustments may be material.

                                        21
<PAGE>

OUTLOOK

     On January 31, 2005, Citigroup, the Company's ultimate parent at June 30,
2005, agreed to sell its Life Insurance and Annuities Business to MetLife. The
sale closed on July 1, 2005, and at that time, the Company became part of
MetLife. MetLife filed with the State of Connecticut Insurance Department (the
"Department") an Amended and Restated Form A Statement Regarding the Acquisition
of Control of or Merger with a Domestic Insurer, dated April 19, 2005 (the "Form
A"), seeking the approval of the Department to acquire control of the Company.
The Form A was approved by the Department on June 30, 2005. The Form A includes
MetLife's post-acquisition business plan and financial projections for the
Company after the closing date. Consistent with MetLife's business plan, the
Company will generally phase out the products that it currently issues by the
end of 2006. This phase out of the products will likely result in fewer assets
and liabilities reported by the Company over time.

     The in-force business of the Company is significantly affected by movements
in the U.S. equity and fixed income credit markets. U.S. equity and credit
market events can have both positive and negative effects on the deposit,
revenue and policy retention performance of the business. A sustained weakness
in the equity markets will decrease revenues and earnings in variable annuity
products. Declines in credit quality of issuers will have a negative effect on
earnings. The retail annuities business is interest rate and equity market
sensitive. The Company's variable annuities include products with guaranteed
features that are equity market sensitive. The guaranteed minimum death benefit
feature pays benefits when at the time of death of a contractholder the account
value is below the guaranteed amount. Another guaranteed feature offered is a
guaranteed minimum withdrawal benefit, which is considered an embedded
derivative. Exposure increases with the decline in equity markets and exposure
decreases with equity market growth. This exposure creates earnings volatility
because the embedded derivative is marked to market through income. The Company
has entered into an alternative hedging strategy to reduce the earnings
volatility.

     A significant portion of life insurance mortality risk is reinsured.
Increasing prices and reduced capacity may adversely impact assets, liabilities
and earnings of the Company. Also, the Company's universal life secondary
guarantee created a large statutory-only reserve from Regulation AXXX. This
reserve is reinsured on a statutory basis to an affiliate. Disruption of this
reinsurance contract could significantly affect the statutory capital of the
Company.

     Due to the recent transaction, there is likely to be a negative impact on
institutional annuity sales in the remainder of 2005, in particular fixed rate
GICs, as potential customers assess the concentration risk associated with the
combination of MetLife and the Company.

     Federal and state regulators have focused on, and continue to devote
substantial attention to, the mutual fund and variable insurance product
industries. As a result of publicity relating to widespread perceptions of
industry abuses, there have been numerous proposals for legislative and
regulatory reforms, including mutual fund governance, new disclosure
requirements concerning mutual fund share classes, commission breakpoints,
revenue sharing, advisory fees, market timing, late trading, portfolio pricing,
annuity products, hedge funds, producer compensation and other issues. It is
difficult to predict at this time whether changes resulting from new laws and
regulations will affect the industries or the Company's businesses, and, if so,
to what degree.

     The statements above are forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. See "-- Forward-Looking
Statements."

INSURANCE REGULATIONS

     Risk-based capital requirements are used as minimum capital requirements by
the National Association of Insurance Commissioners ("NAIC") and the states to
identify companies that merit further regulatory action. At December 31, 2004,
the Company had adjusted capital in excess of amounts requiring any regulatory
action as defined by the NAIC.

     The Company is subject to various regulatory restrictions that limit the
maximum amount of dividends available to be paid to its parent without prior
approval of insurance regulatory authorities. A
                                        22
<PAGE>

maximum of $908 million was available by the end of the year 2005 for such
dividends without prior approval of the Department, depending upon the amount
and timing of the payments. TLAC may not pay a dividend to TIC without such
approval. TIC paid cash dividends of $302.5 million, $147.5 million, and $225.0
million to its parent on January 3, 2005, March 30, 2005 and June 30, 2005,
respectively. Due to the timing of the payment, the January 3, 2005 dividend was
considered extraordinary. The Department approved this extraordinary dividend.
The Connecticut Insurance Law requires prior approval for any dividends for a
period of two years following a change in control. Accordingly, after July 1,
2005, TIC and TLAC would need prior approval to pay a dividend through June 30,
2007. This statement is a forward-looking statement within the meaning of the
Private Securities Litigation Reform Act. See "-- Forward-Looking Statements."

     In conjunction with the Acquisition Agreement between Citigroup and
MetLife, several restructuring transactions requiring regulatory approval were
completed prior to the sale. The Company received regulatory approval from the
Department to complete the restructuring transactions via dividend, and to pay
its second quarter cash dividend. The total amount of these dividends, made on
June 30, 2005, was $4.5 billion on a statutory accounting basis.

ACCOUNTING STANDARDS

  CHANGES IN ACCOUNTING PRINCIPLES

  Accounting and Reporting by Insurance Enterprises for Certain Nontraditional
  Long-Duration Contracts and for Separate Accounts

     On January 1, 2004, the Company adopted the Accounting Standards Executive
Committee of the American Institute of Certified Public Accountants Statement of
Position 03-1, "Accounting and Reporting by Insurance Enterprises for Certain
Nontraditional Long-Duration Contracts and for Separate Accounts" ("SOP 03-1").
The main components of SOP 03-1 provide guidance on accounting and reporting by
insurance enterprises for separate account presentation, accounting for an
insurer's interest in a separate account, transfers to a separate account,
valuation of certain liabilities, contracts with death or other benefit
features, contracts that provide annuitization benefits, and sales inducements
to contract holders.

     The following summarizes the more significant aspects of the Company's
adoption of SOP 03-1, effective January 1, 2004:

          Separate Account Presentation.  SOP 03-1 requires separate account
     products to meet certain criteria in order to be treated as separate
     account products. For products not meeting the specified criteria, these
     assets and liabilities are included in the reporting entities' general
     account.

          The Company's adoption of SOP 03-1 resulted in the consolidation on
     the Company's balance sheet at January 1, 2004 of approximately $500
     million of investments previously held in separate and variable account
     assets and approximately $500 million of contractholder funds previously
     held in separate and variable account liabilities.

          Variable Annuity Contracts with Guaranteed Minimum Death Benefit
     Features.  For variable annuity contracts with guaranteed minimum death
     benefit ("GMDB") features, SOP 03-1 requires the reporting entity to
     categorize the contract as either an insurance or investment contract based
     upon the significance of mortality or morbidity risk. SOP 03-1 provides
     explicit guidance for calculating a reserve for insurance contracts, and
     provides that the reporting entity does not hold reserves for investment
     contracts (i.e., there is no significant mortality risk).

          The Company determined that the mortality risk on its GMDB features
     was not a significant component of the overall variable annuity product,
     and accordingly continued to classify these products as investment
     contracts. Prior to the adoption of SOP 03-1, the Company held a reserve of
     approximately $8 million to cover potential GMDB exposure. This reserve was
     released during the

                                        23
<PAGE>

     first quarter of 2004 as part of the implementation of SOP 03-1. The
     Company evaluates new issues of variable products to determine whether
     mortality risk on GMDB features is insignificant.

          Reserving for Universal Life and Variable Universal Life
     Contracts.  SOP 03-1 requires that a reserve, in addition to the account
     balance, be established for certain insurance benefit features provided
     under universal life ("UL") and variable universal life ("VUL") products if
     the amounts assessed against the contract holder each period for the
     insurance benefit feature are assessed in a manner that is expected to
     result in profits in earlier years and losses in subsequent years from the
     insurance benefit function.

          The Company's UL and VUL products were reviewed to determine whether
     an additional reserve is required under SOP 03-1. The Company determined
     that SOP 03-1 applied to some of its UL and VUL contracts with these
     features and established an additional reserve of approximately $1 million.

          Sales Inducements to Contract Holders.  SOP 03-1 provides,
     prospectively, that sales inducements provided to contract holders meeting
     certain criteria are capitalized and amortized over the expected life of
     the contract as a component of benefit expense. During the first six months
     of 2005 and 2004, the Company capitalized sales inducements of
     approximately $33.7 million and $19.6 million, respectively, in accordance
     with SOP 03-1. These inducements relate to bonuses on certain products
     offered by the Company. For the three and six months ended June 30, 2005
     and 2004, amortization of these capitalized amounts was insignificant.

  Consolidation of Variable Interest Entities

     On January 1, 2004, the Company adopted Financial Accounting Standards
Board ("FASB"), Interpretation No. 46, "Consolidation of Variable Interest
Entities -- An Interpretation of ARB No. 51" ("FIN 46") (revised December 2003,
"FIN 46-R"), which includes substantial changes from the original FIN 46.
Included in these changes, the calculation of expected losses and expected
residual returns has been altered to reduce the impact of decision maker and
guarantor fees in the calculation of expected residual returns and expected
losses. In addition, the definition of a variable interest has been changed in
the revised guidance. The adoption of the provisions of FIN 46-R on January 1,
2004 did not require the Company to consolidate any additional VIEs that were
not previously consolidated. See Note 6.

     FIN 46 and FIN 46-R change the method of determining whether certain
entities, including securitization entities, should be included in the Company's
condensed consolidated financial statements. An entity is subject to FIN 46 and
FIN 46-R and is called a VIE if it has (1) equity that is insufficient to permit
the entity to finance its activities without additional subordinated financial
support from other parties, or (2) equity investors that cannot make significant
decisions about the entity's operations or that do not absorb the expected
losses or receive the expected returns of the entity. All other entities are
evaluated for consolidation under Statement of Financial Accounting Standards
("SFAS") No. 94, "Consolidation of All Majority-Owned Subsidiaries" ("SFAS 94").
A VIE is consolidated by its primary beneficiary, which is the party involved
with the VIE that has a majority of the expected losses or a majority of the
expected residual returns or both.

FUTURE APPLICATIONS OF ACCOUNTING STANDARDS

  Other-Than-Temporary Impairments of Certain Investments

     In June 2005, the FASB completed its review of Emerging Issues Task Force
("EITF") Issue No. 03-1, "The Meaning of Other-Than-Temporary Impairment and Its
Application to Certain Investments" ("EITF 03-1"). EITF 03-1 provides accounting
guidance regarding the determination of when an impairment of debt and
marketable equity securities and investments accounted for under the cost method
should be considered other-than-temporary and recognized in income. EITF 03-1
also requires certain quantitative and qualitative disclosures for debt and
marketable equity securities classified as available-for-sale or
held-to-maturity under SFAS No. 115, "Accounting for Certain Investments in Debt
and Equity Securities" ("SFAS 115"), that are impaired at the balance sheet date
but for which an

                                        24
<PAGE>

other-than-temporary impairment has not been recognized. The FASB decided not to
provide additional guidance on the meaning of other-than-temporary impairment
but will issue a FASB Staff Position Paper ("FSP") 115-1, "The Meaning of
Other-Than-Temporary Impairment and its Application to Certain Investments"
("FSP 115-1"), superseding EITF 03-1 and EITF Topic D-44, "Recognition of Other-
Than-Temporary Impairment on the Planned Sale of a Security Whose Cost Exceeds
Fair Value" ("Topic D-44"). FSP 115-1 will nullify the accounting guidance on
the determination of whether an investment is other-than-temporarily impaired as
set forth in EITF 03-1. FSP 115-1 will be effective for other-than-temporary
impairment analysis conducted in periods beginning after September 15, 2005. The
Company has complied with the disclosure requirements of EITF 03-1, which were
effective December 31, 2003 and remain in effect.

  Accounting Changes and Error Corrections

     In May 2005, the FASB issued SFAS No. 154, "Accounting Changes and Error
Corrections, a replacement of Accounting Principles Board ("APB") Opinion No. 20
and SFAS No. 3" ("SFAS 154"). SFAS 154 is a result of a broader effort by the
FASB to converge standards with the International Accounting Standards Board.
The statement requires retrospective application to prior periods' financial
statements for a voluntary change in accounting principle unless it is
impracticable. It also requires that a change in method of depreciation,
amortization, or depletion for long-lived, nonfinancial assets be accounted for
as a change in accounting estimate rather than a change in accounting principle.
SFAS 154 is effective for accounting changes and corrections of errors made in
fiscal years beginning after December 15, 2005. SFAS 154 is not expected to have
a material impact on the Company's condensed consolidated financial statements.

  Stock-Based Compensation

     In December 2004, the FASB issued SFAS No. 123 (Revised 2004), "Share-Based
Payment" ("SFAS 123-R"), which replaces the existing SFAS 123 and supersedes APB
Opinion No. 25, "Accounting for Stock Issued to Employees." SFAS 123-R requires
companies to measure and record compensation expense for stock options and other
share-based payments based on the instruments' fair value. SFAS 123-R is
effective for interim and annual reporting periods beginning after June 15,
2005. In April 2005, the SEC issued a final ruling allowing public companies to
defer adoption of SFAS 123-R until the beginning of the first fiscal year
following June 15, 2005. At the close of the sale on July 1, 2005, all
outstanding options and awards of Citigroup stock held by the Company's
employees vested. All related stock option expense was recorded at the time of
vesting by Citigroup. As such, the Company does not expect the adoption of SFAS
123-R to have any impact on its financial statements.

FORWARD-LOOKING STATEMENTS

     Certain of the statements contained herein that are not historical facts
are forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. The Company's actual results may differ materially from
those included in the forward-looking statements. Forward-looking statements are
typically identified by the words "believe," "expect," "anticipate," "intend,"
"estimate," "may increase," "predict," and similar expressions or future or
conditional verbs such as "will," "should," "would," and "could."
Forward-looking statements are made based on management's current expectations
and beliefs concerning future developments and their potential effects on the
Company. Such forward-looking statements are not guarantees of future
performance. Actual results may differ materially from those included in the
forward-looking statements as a result of risks and uncertainties including, but
not limited to, the following: (i) changes in general economic conditions,
including the performance of financial markets and interest rates; (ii)
heightened competition, including with respect to pricing, entry of new
competitors and the development of new products by new and existing competitors;
(iii) unanticipated changes in industry trends; (iv) adverse results or other
consequences from litigation, arbitration or regulatory investigations; (v)
regulatory, accounting or tax changes that may affect the cost of, or demand
for, the Company's products or services; (vi) downgrades in the Company's and
its affiliates' claims paying

                                        25
<PAGE>

ability, financial strength or credit ratings; (vii) changes in rating agency
policies or practices; (viii) discrepancies between actual claims experience and
assumptions used in setting prices for the Company's products and establishing
the liabilities for the Company's obligations for future policy benefits and
claims; (ix) discrepancies between actual experience and assumptions used in
establishing liabilities related to other contingencies or obligations; (x) the
effects of business disruption or economic contraction due to terrorism or other
hostilities; (xi) changes in results of the Company arising from the acquisition
by MetLife and integration of its businesses into MetLife's operations; and
(xii) other risks and uncertainties described from time to time in TIC's filings
with the SEC. The Company specifically disclaims any obligation to update or
revise any forward-looking statement, whether as a result of new information,
future developments or otherwise.

ITEM 3.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

SENSITIVITY ANALYSIS

     Sensitivity analysis is defined as the measurement of potential loss in
future earnings, fair values or cash flows of market-sensitive instruments
resulting from one or more selected hypothetical changes in interest rates and
other market rates or prices over a selected time. In the Company's sensitivity
analysis model, a hypothetical change in market rates is selected that is
expected to reflect reasonably possible near-term changes in those rates. The
term "near-term" means a period of time going forward up to one year from the
date of the financial statements. Actual results may differ from the
hypothetical change in market rates assumed in this report, especially since
this sensitivity analysis does not reflect the results of any actions that would
be taken by the Company to mitigate such hypothetical losses in fair value.

     For invested assets, duration modeling is used to calculate changes in fair
values. Durations on invested assets are adjusted for call, put and reset
features. Portfolio durations are calculated on a market value weighted basis,
including accrued investment income, using trade date holdings as of June 30,
2005 and December 31, 2004. The current duration of invested assets as of June
30, 2005 is 4.5 years. The sensitivity analysis model used by the Company
produces a loss in fair value of interest rate sensitive invested assets of
approximately $2.1 billion and $2.4 billion based on a 100 basis point increase
in interest rates as of June 30, 2005 and December 31, 2004, respectively.

     Liability durations are determined consistently with the determination of
liability fair values. Where fair values are determined by discounting expected
cash flows, the duration is the percentage change in the fair value for a 100
basis point change in the discount rate. Where liability fair values are set
equal to surrender values, option-adjusted duration techniques are used to
calculate changes in fair values. The duration of liabilities as of June 30,
2005 is 5.0 years. The sensitivity analysis model used by the Company produces a
decrease in fair value of interest rate sensitive insurance policy and claims
reserves of approximately $2.0 billion and $1.9 billion based on a 100 basis
point increase in interest rates as of June 30, 2005 and December 31, 2004,
respectively. Based on the sensitivity analysis model used by the Company, the
net loss in fair value of market sensitive instruments, including non-financial
instrument liabilities, as a result of a 100 basis point increase in interest
rates as of June 30, 2005 and December 31, 2004 is not material.

ITEM 4.  CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

     TIC's management, with the participation of TIC's Chief Executive Officer
and Chief Financial Officer, has evaluated the effectiveness of the design and
operation of TIC's disclosure controls and procedures (as such term is defined
in Rules 13a-15(e) or 15d-15(e) under the Securities Exchange Act of 1934, as
amended ("Exchange Act")) as of the end of the period covered by this report.
Based on such evaluation, TIC's Chief Executive Officer and Chief Financial
Officer have concluded that TIC's disclosure controls and procedures are
effective.

                                        26
<PAGE>

INTERNAL CONTROL OVER FINANCIAL REPORTING

     There were no changes in TIC's internal control over financial reporting
(as such term is defined in Rules 13a-15(f) or 15d-15(f) under the Exchange Act)
during the quarter ended June 30, 2005 that have materially affected, or are
reasonably likely to materially affect, TIC's internal control over financial
reporting.

                          PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     In August 1999, an amended putative class action complaint captioned Lisa
Macomber, et al. vs. Travelers Property Casualty Corporation, et al. was filed
in New Britain, Connecticut Superior Court against TLAC, Travelers Equity Sales,
Inc. and certain former affiliates. The amended complaint alleges Travelers
Property Casualty Corporation, a former affiliate, purchased structured
settlement annuities from TLAC and spent less on the purchase of those
structured settlement annuities than agreed with claimants; and that commissions
paid to brokers of structured settlement annuities, were paid, in part, to
Travelers Property Casualty Corporation. The amended complaint was dismissed
and, following an appeal by the plaintiff in September 2002, the Connecticut
Supreme Court reversed the dismissal of several of the plaintiff's claims. On
May 26, 2004, the Connecticut Superior Court certified a nationwide class action
involving the following claims: violation of the Connecticut Unfair Trade
Practice Statute, unjust enrichment and civil conspiracy. On June 15, 2004, the
defendants appealed the Connecticut Superior Court's May 26, 2004 class
certification order.

     A former registered representative of Tower Square Securities, Inc. ("Tower
Square"), a broker-dealer subsidiary of TIC, is alleged to have defrauded
individuals by diverting funds for his personal use. In June 2005, the SEC
issued a formal order of investigation with respect to Tower Square and served
Tower Square with a subpoena. The Securities and Business Investments Division
of the Connecticut Department of Banking and the National Association of
Securities Dealers ("NASD") are also reviewing this matter. Tower Square intends
to fully cooperate with the SEC, the NASD and the Department of Banking. One
arbitration matter was commenced in June 2005 against Tower Square and the other
unaffiliated broker-dealers with whom the registered representative was formerly
registered. It is reasonably possible that other matters will be brought
regarding this matter. Tower Square intends to defend itself vigorously in all
such cases.

     In 2003 and 2004, several issues in the mutual fund and variable insurance
product industries have come under the scrutiny of federal and state regulators.
Like many other companies in our industry, the Company has received a request
for information from the SEC and a subpoena from the New York Attorney General
regarding market timing and late trading. During 2004, the SEC requested
additional information about the Company's variable product operations on market
timing, late trading and revenue sharing, and the SEC, the NASD and the New York
Insurance Department have made inquiries into these issues and other matters
associated with the sale and distribution of insurance products. In addition,
like many insurance companies and agencies, in 2004 and 2005 the Company
received inquiries from certain state Departments of Insurance regarding
producer compensation and bidding practices. The Company is cooperating fully
with all of these requests and is not able to predict their outcomes.

     In addition, the Company is a defendant or co-defendant in various other
litigation matters in the normal course of business. These include civil
actions, arbitration proceedings and other matters arising in the normal course
of business out of activities as an insurance company, a broker and dealer in
securities or otherwise.

     In the opinion of the Company's management, the ultimate resolution of
these legal and regulatory proceedings would not be likely to have a material
adverse effect on the Company's consolidated financial condition or liquidity,
but, if involving monetary liability, may be material to the Company's operating
results for any particular period.

                                        27
<PAGE>

ITEM 6.  EXHIBITS

<Table>
<S>            <C>
    3.01       Charter of The Travelers Insurance Company ("TIC"), as
               effective October 19, 1994, incorporated by reference to
               Exhibit 3.01 to TIC's Quarterly Report on Form 10-Q for the
               fiscal quarter ended September 30, 1994 (File No. 33-33691)
               (the "September 30, 1994 10-Q").
    3.02       By-laws of TIC, as effective October 20, 1994, incorporated
               by reference to Exhibit 3.02 to the September 30, 1994 10-Q.
   31.01+      Certification of chief executive officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002.
   31.02+      Certification of chief financial officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002.
   32.01+      Certification of chief executive officer pursuant Section
               906 of the Sarbanes-Oxley Act of 2002.
   32.02+      Certification of chief financial officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002.
</Table>

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

+ Filed herewith

                                        28
<PAGE>

                                   SIGNATURES

     Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                          THE TRAVELERS INSURANCE COMPANY
                                                       (Registrant)

                                          /s/ Joseph J. Prochaska, Jr.
                                          --------------------------------------
                                          Joseph J. Prochaska, Jr.
                                          Senior Vice President and Chief
                                          Accounting Officer
                                          (Authorized Signatory and Chief
                                          Accounting Officer)

Date: August 12, 2005

                                        29
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
EXHIBIT NO.                            DESCRIPTION
-----------                            -----------
<S>            <C>
    3.01       Charter of The Travelers Insurance Company ("TIC"), as
               effective October 19, 1994, incorporated by reference to
               Exhibit 3.01 to TIC's Quarterly Report on Form 10-Q for the
               fiscal quarter ended September 30, 1994 (File No. 33-33691)
               (the "September 30, 1994 10-Q").
    3.02       By-laws of TIC, as effective October 20, 1994, incorporated
               by reference to Exhibit 3.02 to the September 30, 1994 10-Q.
   31.01+      Certification of chief executive officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002.
   31.02+      Certification of chief financial officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002.
   32.01+      Certification of chief executive officer pursuant Section
               906 of the Sarbanes-Oxley Act of 2002.
   32.02+      Certification of chief financial officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002.
</Table>

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

+ Filed herewith

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