<PAGE>

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

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

                                    FORM 10-Q

           [X]    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                    THE SECURITIES EXCHANGE ACT OF 1934
                    FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2004

                                       OR

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

             FOR THE TRANSITION PERIOD FROM ___________ TO _________

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

                         COMMISSION FILE NUMBER 33-03094

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

                         THE TRAVELERS INSURANCE COMPANY
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

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

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


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

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

                          Yes [X]            No [ ]

Indicate by checkmark whether the registrant is an accelerated filer (as defined
in Exchange Act Rule 12b-2).

                          Yes [ ]            No [X]

As of the date hereof, there were outstanding 40,000,000 shares of common stock,
par value $2.50 per share, of the registrant, all of which were owned by
Citigroup Insurance Holding Corporation, an indirect wholly owned subsidiary of
Citigroup Inc.

                            REDUCED DISCLOSURE FORMAT

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

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                            Page
                                                                                                            ----
<S>                                                                                                         <C>
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Condensed Consolidated Statements of Income for the
three and nine months ended September 30, 2004 and 2003 (unaudited)......................................     3

Condensed Consolidated Balance Sheets as of September 30, 2004 (unaudited) and
December 31, 2003........................................................................................     4

Condensed Consolidated Statements of Changes in
Shareholder's Equity for the three and nine months ended September 30, 2004 and 2003 (unaudited).........     5

Condensed Consolidated Statements of Cash Flows for the
nine months ended September 30, 2004 and 2003 (unaudited)................................................     6

Notes to Condensed Consolidated Financial Statements (unaudited).........................................     7

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS............................................................    17

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.......................................    23

ITEM 4. CONTROLS AND PROCEDURES..........................................................................    23

PART II - OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................................................................    24

Signatures...............................................................................................    25

Exhibit 31.01............................................................................................    26

Exhibit 31.02............................................................................................    27

Exhibit 32.01............................................................................................    28
</TABLE>

                                        2

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
                                 ($ in millions)

<TABLE>
<CAPTION>
                                                     THREE MONTHS ENDED   NINE MONTHS ENDED
                                                        SEPTEMBER 30,       SEPTEMBER 30,
                                                     ------------------   ------------------
                                                       2004      2003      2004       2003
                                                     -------    -------   -------    -------
<S>                                                  <C>        <C>       <C>        <C>
REVENUES
Premiums                                             $   660    $   741   $ 1,634    $ 1,707
Net investment income                                    829        782     2,475      2,297
Net realized investment gains (losses)                    (1)        43       (13)        45
Fee income                                               197        158       574        447
Other revenues                                            49         40       103         96
                                                     -------    -------   -------    -------
     Total Revenues                                    1,734      1,764     4,773      4,592
                                                     -------    -------   -------    -------

BENEFITS AND EXPENSES
Current and future insurance benefits                    601        683     1,446      1,537
Interest credited to contractholders                     336        311       962        933
Amortization of deferred acquisition costs               186        128       481        373
General and administrative expenses                      111        115       353        337
                                                     -------    -------   -------    -------
     Total Benefits and Expenses                       1,234      1,237     3,242      3,180
                                                     -------    -------   -------    -------
Income from operations before federal income taxes       500        527     1,531      1,412
                                                     -------    -------   -------    -------
Federal income taxes                                     154        155       437        364
                                                     -------    -------   -------    -------
     Net Income                                      $   346    $   372   $ 1,094    $ 1,048
                                                     =======    =======   =======    =======
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.

                                        3

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 ($ in millions)

<TABLE>
<CAPTION>
                                                                     SEPTEMBER 30, 2004
                                                                         (UNAUDITED)       DECEMBER 31, 2003
                                                                     ------------------    -----------------
<S>                                                                  <C>                   <C>
ASSETS
Investments (including $3,047 and $2,170 subject to securities
   lending agreements)                                                     $ 60,382             $ 56,204
Separate and variable accounts                                               28,840               26,972
Reinsurance recoverables                                                      4,624                4,470
Deferred acquisition costs                                                    4,788                4,395
Other assets                                                                  2,869                3,307
                                                                           --------             --------
     Total Assets                                                          $101,503             $ 95,348
                                                                           --------             --------
LIABILITIES
Contractholder funds                                                       $ 32,967             $ 30,252
Future policy benefits and claims                                            16,555               15,964
Separate and variable accounts                                               28,840               26,972
Other liabilities                                                             9,340                8,803
                                                                           --------             --------
     Total Liabilities                                                       87,702               81,991
                                                                           --------             --------
SHAREHOLDER'S EQUITY
Common stock, par value $2.50; 40 million shares authorized,
     issued and outstanding                                                     100                  100
Additional paid-in capital                                                    5,448                5,446
Retained earnings                                                             6,773                6,451
Accumulated other changes in equity from nonowner sources                     1,480                1,360
                                                                           --------             --------
     Total Shareholder's Equity                                              13,801               13,357
                                                                           --------             --------

     Total Liabilities and Shareholder's Equity                            $101,503             $ 95,348
                                                                           ========             ========
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.

                                        4

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
      CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDER'S EQUITY
                                   (UNAUDITED)
                                 ($ in millions)

<TABLE>
<CAPTION>
                                                               THREE MONTHS ENDED      NINE MONTHS ENDED
                                                                  SEPTEMBER 30,          SEPTEMBER 30,
                                                              --------------------    --------------------
                                                                2004        2003        2004        2003
                                                              --------    --------    --------    --------
<S>                                                           <C>         <C>         <C>         <C>
COMMON STOCK
Balance, beginning of period                                  $    100    $    100    $    100    $    100
Changes in common stock                                              -           -           -           -
                                                              --------    --------    --------    --------
Balance, end of period                                        $    100    $    100    $    100    $    100
                                                              ========    ========    ========    ========

ADDITIONAL PAID-IN CAPITAL
Balance, beginning of period                                  $  5,447    $  5,444    $  5,446    $  5,443
Stock option tax benefit                                             1           -           2           1
                                                              --------    --------    --------    --------
Balance, end of period                                        $  5,448    $  5,444    $  5,448    $  5,444
                                                              ========    ========    ========    ========

RETAINED EARNINGS
Balance, beginning of period                                  $  6,579    $  6,151    $  6,451    $  5,638
Net income                                                         346         372       1,094       1,048
Dividends to parent                                               (152)       (117)       (772)       (280)
                                                              --------    --------    --------    --------
Balance, end of period                                        $  6,773    $  6,406    $  6,773    $  6,406
                                                              ========    ========    ========    ========

ACCUMULATED OTHER CHANGES
IN EQUITY FROM NONOWNER SOURCES
Balance, beginning of period                                  $    815    $  1,598    $  1,360    $    454
Foreign currency translation, net of tax                             -           -           1           2
Unrealized gains (losses), net of tax                              681        (242)         75         870
Derivative instrument hedging activity gains (losses),
    net of tax                                                     (16)         32          44          62
                                                              --------    --------    --------    --------
Balance, end of period                                        $  1,480    $  1,388    $  1,480    $  1,388
                                                              ========    ========    ========    ========

SUMMARY OF CHANGES IN EQUITY
FROM NONOWNER SOURCES
Net income                                                    $    346    $    372    $  1,094    $  1,048
Other changes in equity from nonowner sources                      665        (210)        120         934
                                                              --------    --------    --------    --------
Total changes in equity from nonowner sources                 $  1,011    $    162    $  1,214    $  1,982
                                                              ========    ========    ========    ========

TOTAL SHAREHOLDER'S EQUITY
Balance, beginning of period                                  $ 12,941    $ 13,293    $ 13,357    $ 11,635
Changes in nonowner sources                                      1,011         162       1,214       1,982
Dividends                                                         (152)       (117)       (772)       (280)
Changes in additional paid-in capital                                1           -           2           1
                                                              --------    --------    --------    --------
Balance, end of period                                        $ 13,801    $ 13,338    $ 13,801    $ 13,338
                                                              ========    ========    ========    ========
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.

                                        5

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
                 CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                           INCREASE (DECREASE) IN CASH
                                   (UNAUDITED)
                                 ($ in millions)

<TABLE>
<CAPTION>
                                                                     NINE MONTHS ENDED
                                                                       SEPTEMBER 30,
                                                                    --------------------
                                                                      2004        2003
                                                                    --------    --------
<S>                                                                 <C>         <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES                           $  1,064    $    476
                                                                    --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from maturities of investments
              Fixed maturities                                         5,220       5,300
              Equity securities                                           81          28
              Mortgage loans                                             500         273

     Proceeds from sales of investments
              Fixed maturities                                         5,840       9,957
              Equity securities                                           69         121
              Mortgage Loans                                              29           -
              Real estate held for sale                                   53           5

     Purchases of investments
              Fixed maturities                                       (14,681)    (18,249)
              Equity securities                                          (95)       (178)
              Mortgage loans                                            (744)       (193)
     Policy loans, net                                                    12          20
     Short-term securities (purchases) sales, net                       (178)         45
     Other investment sales, net                                         382         112
     Securities transactions in course of settlement, net                962        (543)
                                                                    --------    --------
     Net cash used in investing activities                            (2,550)     (3,302)
                                                                    --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES
     Contractholder fund deposits                                      7,454       6,647
     Contractholder fund withdrawals                                  (5,089)     (3,588)
     Dividends to parent company                                        (772)       (280)
                                                                    --------    --------
     Net cash provided by financing activities                         1,593       2,779
                                                                    --------    --------
Net increase (decrease) in cash                                          107         (47)
Cash at beginning of period                                              149         186
                                                                    --------    --------
Cash at end of period                                               $    256    $    139
                                                                    ========    ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
     Income taxes paid                                              $    146    $    305
                                                                    ========    ========
</TABLE>

            See Notes to Condensed Consolidated Financial Statements.

                                        6

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

1.    BASIS OF PRESENTATION

      The Travelers Insurance Company (TIC, together with its subsidiaries, the
      Company), is a wholly owned subsidiary of Citigroup Insurance Holding
      Corporation (CIHC), an indirect wholly owned subsidiary of Citigroup Inc.
      (Citigroup). Citigroup is a diversified global financial services holding
      company whose businesses provide a broad range of financial services to
      consumer and corporate customers around the world. The condensed
      consolidated financial statements and accompanying footnotes of the
      Company are prepared in conformity with accounting principles generally
      accepted in the United States of America (GAAP) and are unaudited. The
      preparation of financial statements in conformity with GAAP requires
      management to make estimates and assumptions that affect the reported
      amounts of assets and liabilities and disclosure of contingent assets and
      liabilities at the date of the financial statements and the reported
      amounts of revenues and benefits and expenses during the reporting period.
      Actual results could differ from those estimates.

      The Company's two reportable business segments are Travelers Life &
      Annuity and Primerica. The primary insurance entities of the Company are
      TIC and its subsidiary The Travelers Life and Annuity Company (TLAC),
      included in the Travelers Life & Annuity segment, and Primerica Life
      Insurance Company (Primerica Life) and its subsidiaries, Primerica Life
      Insurance Company of Canada, CitiLife Financial Limited (CitiLife) and
      National Benefit Life Insurance Company (NBL), included in the Primerica
      segment. Significant intercompany transactions and balances have been
      eliminated. The condensed consolidated financial statements include the
      accounts of the insurance entities of the Company and Tribeca Citigroup
      Investments Ltd., among others, on a fully consolidated basis.

      In the opinion of management, the interim financial statements reflect all
      normal recurring adjustments necessary for a fair presentation of results
      for the periods reported. The accompanying condensed consolidated
      financial statements should be read in conjunction with the consolidated
      financial statements and related notes included in the Company's Annual
      Report on Form 10-K for the year ended December 31, 2003. The condensed
      consolidated balance sheet as of December 31, 2003 was derived from the
      audited balance sheet included in the Form 10-K. Certain financial
      information that is normally included in annual financial statements
      prepared in accordance with GAAP, but is not required for interim
      reporting purposes, has been condensed or omitted. Certain prior year
      amounts have been reclassified to conform to the 2004 presentation.

2.    ACCOUNTING STANDARDS

      CHANGES IN ACCOUNTING PRINCIPLES

      ACCOUNTING AND REPORTING BY INSURANCE ENTERPRISES FOR CERTAIN
      NONTRADITIONAL LONG-DURATION CONTRACTS AND FOR SEPARATE ACCOUNTS

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

                                        7

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

      transfers to a separate account, valuation of certain liabilities,
      contracts with death or other benefit features, contracts that provide
      annuitization benefits, and sales inducements to contract holders.

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

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

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

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

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

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

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

      Sales Inducements to Contract Holders. SOP 03-1 provides, prospectively,
      that sales inducements provided to contract holders meeting certain
      criteria are capitalized and amortized over the expected life of the
      contract as a component of benefit expense. During the first nine months
      of 2004, the Company capitalized sales inducements of approximately $34.7
      million in accordance with SOP 03-1. These inducements relate to bonuses
      on certain products offered by the Company. For the three and nine months
      ended September 30, 2004, amortization of these capitalized amounts was
      insignificant.

                                        8

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

     CONSOLIDATION OF VARIABLE INTEREST ENTITIES

     On January 1, 2004, the Company adopted Financial Accounting Standards
     Board (FASB) Interpretation No. 46, "Consolidation of Variable Interest
     Entities (revised December 2003)," (FIN 46-R), which includes substantial
     changes from the original FIN 46. Included in these changes, the
     calculation of expected losses and expected residual returns has been
     altered to reduce the impact of decision maker and guarantor fees in the
     calculation of expected residual returns and expected losses. In addition,
     the definition of a variable interest has been changed in the revised
     guidance. The Company has evaluated the impact of applying FIN 46-R to
     existing VIEs in which it has variable interests. The effect of adopting
     FIN 46-R on the Company's consolidated balance sheet is immaterial. See
     Note 3.

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

     For any VIEs that must be consolidated under FIN 46 that were created
     before February 1, 2003, the assets, liabilities, and noncontrolling
     interests of the VIE are initially measured at their carrying amounts with
     any difference between the net amount added to the balance sheet and any
     previously recognized interest being recognized as the cumulative effect of
     an accounting change. If determining the carrying amounts is not
     practicable, fair value at the date FIN 46 first applies may be used to
     measure the assets, liabilities, and noncontrolling interests of the VIE.
     In October 2003, FASB announced that the effective date of FIN 46 was
     deferred from July 1, 2003 to periods ending after December 15, 2003 for
     VIEs created prior to February 1, 2003. TIC elected to implement the
     provisions of FIN 46 in the 2003 third quarter, resulting in the
     consolidation of VIEs increasing both total assets and total liabilities by
     approximately $407 million. The implementation of FIN 46 encompassed a
     review of numerous entities to determine the impact of adoption and
     considerable judgment was used in evaluating whether or not a VIE should be
     consolidated.

     STOCK-BASED COMPENSATION

     On January 1, 2003, the Company adopted the fair value recognition
     provisions of SFAS No. 123, "Accounting for Stock-Based Compensation" (SFAS
     123), prospectively for all awards granted, modified, or settled after
     December 31, 2002. The prospective method is one of the adoption methods
     provided for under SFAS No. 148, "Accounting for Stock-Based Compensation -
     Transition and Disclosure," issued in December 2002. SFAS 123 requires that
     compensation cost for all stock awards be calculated and recognized over
     the service period (generally equal to the vesting period). This
     compensation cost is determined using option pricing models, intended to
     estimate the fair value of the awards at the grant date. Similar to
     Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
     Employees," the alternative method of accounting, an offsetting increase to
     stockholders' equity under SFAS 123 is recorded equal to the amount of
     compensation expense charged. During the 2004 first quarter, the Company
     changed its option valuation from the Black-Scholes model to the Binomial
     Method. The impact of this change was

                                        9
<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                  (CONTINUED)

      immaterial. Compensation expense and proforma compensation expense had the
      Company applied SFAS 123 to stock awards granted prior to 2003 was
      insignificant for the three and nine month periods ended September 30,
      2004 and 2003.

      FUTURE APPLICATION OF ACCOUNTING STANDARDS

      OTHER-THAN-TEMPORARY IMPAIRMENTS OF CERTAIN INVESTMENTS

      On September 30, 2004, the FASB voted unanimously to delay the effective
      date of Emerging Issues Task Force (EITF) No. 03-1, "The Meaning of
      Other-Than-Temporary Impairment and its Application to Certain
      Investments" (EITF 03-1). The delay applies to both debt and equity
      securities and specifically applies to impairments caused by interest rate
      and sector spreads. In addition, the provisions of EITF 03-1 that have
      been delayed relate to the requirements that a company declare its intent
      to hold the security to recovery and designate a recovery period in order
      to avoid recognizing an other-than-temporary impairment charge through
      earnings.

      The FASB will be issuing proposed implementation guidance shortly. The
      Company is closely monitoring this issue and will evaluate the impact of
      adopting EITF 03-1 once the implementation guidance is available.

3.    INVESTMENTS

      FIXED MATURITIES

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

<TABLE>
<CAPTION>
                                                                        GROSS        GROSS
SEPTEMBER 30, 2004                                       AMORTIZED   UNREALIZED   UNREALIZED      FAIR
($ in millions)                                            COST         GAINS        LOSSES       VALUE
------------------                                       ---------   ----------   ----------     -------
<S>                                                      <C>         <C>          <C>            <C>
AVAILABLE FOR SALE:
     Mortgage-backed securities - CMOs and
       pass-through securities                            $ 8,205      $   332      $    14      $ 8,523
     U.S. Treasury securities and obligations of
       U.S. Government and government agencies and
       authorities                                          1,988           91            -        2,079
     Obligations of states, municipalities and
       political subdivisions                                 376           40            1          415
     Debt securities issued by foreign governments            802           59            3          858
     All other corporate bonds                             25,313        1,454           48       26,719
     Other debt securities                                  7,361          396           19        7,738
     Redeemable preferred stock                               168           49            2          215
                                                          -------      -------      -------      -------
         Total Available For Sale                         $44,213      $ 2,421      $    87      $46,547
                                                          =======      =======      =======      =======
</TABLE>

                                       10

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

<TABLE>
<CAPTION>
                                                                        GROSS       GROSS
DECEMBER 31, 2003                                        AMORTIZED   UNREALIZED   UNREALIZED      FAIR
($ in millions)                                            COST         GAINS       LOSSES       VALUE
-----------------                                        ---------   ----------   ----------     -------
<S>                                                      <C>         <C>          <C>            <C>
AVAILABLE FOR SALE:
     Mortgage-backed securities - CMOs and
       pass-through securities                            $ 8,061      $   326      $    18      $ 8,369
     U.S. Treasury securities and obligations of
       U.S. Government and government agencies and
       authorities                                          2,035           22           12        2,045
     Obligations of states, municipalities and
       political subdivisions                                 379           21            2          398
     Debt securities issued by foreign governments            690           51            1          740
     All other corporate bonds                             23,098        1,507           64       24,541
     Other debt securities                                  5,701          377           22        6,056
     Redeemable preferred stock                               155           20            1          174
                                                          -------      -------      -------      -------
         Total Available For Sale                         $40,119      $ 2,324      $   120      $42,323
                                                          =======      =======      =======      =======
</TABLE>

      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
                                                                              WITH UNREALIZED LOSS
                                                  TOTAL FIXED MATURITIES      TOTALING 20% OR MORE
                                                  ----------------------     ----------------------
SEPTEMBER 30, 2004                                 AMORTIZED  UNREALIZED     AMORTIZED   UNREALIZED
($ in millions)                                      COST        LOSS           COST        LOSS
------------------                                 ---------  ----------     ---------   ----------
<S>                                                <C>        <C>            <C>         <C>
Six months or less                                  $4,392      $   46         $   18      $    4
Greater than six months to nine months                 522          11              -           -
Greater than nine months to twelve months              182           3              -           -
Greater than twelve months                             781          27              -           -
                                                    ------      ------         ------      ------
    Total                                           $5,877      $   87         $   18      $    4
                                                    ======      ======         ======      ======
</TABLE>

<TABLE>
<CAPTION>
                                                                            TOTAL FIXED MATURITIES
                                                                             WITH UNREALIZED LOSS
                                                 TOTAL FIXED MATURITIES      TOTALING 20% OR MORE
                                                 ----------------------     ----------------------
DECEMBER 31, 2003                                 AMORTIZED  UNREALIZED      AMORTIZED  UNREALIZED
($ in millions)                                     COST        LOSS           COST        LOSS
-----------------                                 ---------  ----------      ---------  ----------
<S>                                               <C>        <C>             <C>        <C>
Six months or less                                 $4,356      $   68         $   24      $    7
Greater than six months to nine months                558          17              -           -
Greater than nine months to twelve months             199           6              2           -
Greater than twelve months                            650          29              3           1
                                                   ------      ------         ------      ------
   Total                                           $5,763      $  120         $   29      $    8
                                                   ======      ======         ======      ======
</TABLE>

                                       11

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

      NET REALIZED CAPITAL GAINS (LOSSES)

<TABLE>
<CAPTION>
                                         FOR THE THREE MONTHS   FOR THE NINE MONTHS
                                          ENDED SEPTEMBER 30,   ENDED SEPTEMBER 30,
                                         --------------------   -------------------
                                             2004    2003          2004    2003
($ in millions)                              ----    ----          ----    ---
<S>                                          <C>     <C>           <C>     <C>
NET REALIZED CAPITAL GAINS (LOSSES)
     BY ASSET CLASS:
     Fixed maturities                        $ 29    $(40)         $(23)   $ (4)
     Equities                                   1       3            13       9
     Derivatives:
        Guaranteed minimum withdrawal
          benefit derivatives, net             18       -            27       -
        Other derivatives                     (49)     34           (30)     13
     Other                                      -      46             -      27
                                             ----    ----          ----    ----
         Total                               $ (1)   $ 43          $(13)   $ 45
                                             ====    ====          ====    ====
</TABLE>

      VARIABLE INTEREST ENTITIES

      The following table represents the carrying amounts and classification of
      consolidated assets that are collateral for VIE obligations.

<TABLE>
<CAPTION>
$ in millions                                    SEPTEMBER 30, 2004           DECEMBER 31, 2003
-------------                                    ------------------           -----------------
<S>                                              <C>                          <C>
Investments                                             $389                         $400
Cash                                                       2                           11
Other                                                      3                            4
                                                        ----                         ----
Total assets of consolidated VIEs                       $394                         $415
                                                        ====                         ====
</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 small passive debt
      and equity investments.

4.    OPERATING SEGMENTS

      The Company has two reportable business segments that are separately
      managed due to differences in products, services, marketing strategy and
      resource management. The business of each segment is maintained and
      reported through separate legal entities within the Company. The
      management groups of each segment report separately to the Company's
      ultimate parent, Citigroup.

                                       12

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

     TRAVELERS LIFE & ANNUITY (TLA) core offerings include retail annuities,
     individual life insurance, corporate owned life insurance (COLI) and
     institutional annuity insurance products distributed by TIC and TLAC
     principally under the Travelers Life & Annuity name. The retail annuities
     products offered include fixed and variable deferred annuities and payout
     annuities. The individual life insurance products include term, universal
     and variable life insurance. The COLI product is a variable universal life
     product distributed through independent specialty brokers. The
     institutional annuity products include institutional pensions, including
     guaranteed investment contracts (GICs), payout annuities, group annuities
     sold to employer-sponsored retirement and savings plans and structured
     settlements and funding agreements.

     The PRIMERICA business segment consolidates the business of Primerica Life,
     Primerica Life Insurance Company of Canada, CitiLife and NBL. The Primerica
     business segment offers individual life products, primarily term insurance,
     to customers through a sales force of approximately 108,000 agents. A great
     majority of the domestic licensed sales force works on a part-time basis.

     For a detailed description of accounting policies of the segments, see the
     Company's Annual Report on Form 10-K for the year ended December 31, 2003.
     The amount of investments in equity method investees and total expenditures
     for additions to long-lived assets other than financial instruments,
     long-term customer relationships of a financial institution, mortgage and
     other servicing rights, and deferred tax assets, were not material.

<TABLE>
<CAPTION>
                          FOR THE THREE MONTHS     FOR THE NINE MONTHS
                           ENDED SEPTEMBER 30,     ENDED SEPTEMBER 30,
                             2004       2003         2004       2003
                            ------     ------       ------     ------
<S>                         <C>        <C>          <C>        <C>
REVENUES BY SEGMENT
TLA                         $1,297     $1,352       $3,457     $3,359
Primerica                      437        412        1,316      1,233
                            ------     ------       ------     ------
Total Revenues              $1,734     $1,764       $4,773     $4,592
                            ======     ======       ======     ======

NET INCOME BY SEGMENT
TLA                         $  223     $  265       $  727     $  725
Primerica                      123        107          367        323
                            ------     ------       ------     ------
Net Income                  $  346     $  372       $1,094     $1,048
                            ======     ======       ======     ======
</TABLE>

<TABLE>
<CAPTION>
                    AT SEPTEMBER 30,  AT DECEMBER 31,
                         2004              2003
                         ----              ----
<S>                 <C>               <C>
ASSETS BY SEGMENT
TLA                    $ 91,661         $ 85,881
Primerica                 9,842            9,467
                       --------         --------
Total Assets           $101,503         $ 95,348
                       ========         ========
</TABLE>

                                       13

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

The following tables contain key segment measurements:

BUSINESS SEGMENT INFORMATION:

<TABLE>
<CAPTION>
                                                                             2004                              2003
FOR THE THREE MONTHS ENDED                                        --------------------------         ------------------------
SEPTEMBER 30, ($ in millions)                                      TLA             PRIMERICA          TLA           PRIMERICA
-----------------------------                                     -----            ---------         -----          ---------
<S>                                                               <C>              <C>               <C>            <C>
Premiums                                                          $ 333              $327             $428             $313
Net investment income                                               746                83              706               76
Interest credited to contractholders                                336                 -              311                -
Amortization of deferred acquisition costs                          123                63               68               60
Capitalized deferred acquisition costs                              209               107              156               90
Federal income taxes                                                 90                64              100               55
</TABLE>

<TABLE>
<CAPTION>
                                                                             2004                              2003
FOR THE NINE MONTHS ENDED                                         --------------------------         ------------------------
SEPTEMBER 30, ($ in millions)                                      TLA             PRIMERICA          TLA           PRIMERICA
-----------------------------                                     ------           ---------         ------         ---------
<S>                                                               <C>              <C>               <C>            <C>
Premiums                                                          $  656             $978            $  780            $927
Net investment income                                              2,225              250             2,065             232
Interest credited to contractholders                                 962                -               933               -
Amortization of deferred acquisition costs                           291              190               200             173
Capitalized deferred acquisition costs                               586              288               406             276
Federal income taxes                                                 261              176               197             167
</TABLE>

The majority of the annuity business and a substantial portion of the life
business written by TLA are accounted for as investment contracts, with the
result that the deposits collected are reported as liabilities and are not
included in revenues. Deposits represent an operating statistic integral to
managing TLA operations, which management uses for measuring business volumes,
and may not be comparable to similarly captioned measurements used by other life
insurance companies. For the three months ended September 30, 2004 and 2003,
deposits collected amounted to $4.0 billion and $3.5 billion, respectively. For
the nine months ended September 30, 2004 and 2003, deposits amounted to $11.0
billion and $9.2 billion, respectively.

The Company's revenue was derived almost entirely from U.S. domestic business.
Revenue attributable to foreign countries was insignificant.

The Company had no transactions with a single customer representing 10% or more
of its revenue.

                                       14

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

5. DEPOSIT FUNDS AND RESERVES

At September 30, 2004 and December 31, 2003, the Company had $46.8 billion and
$43.5 billion of life and annuity deposit funds and reserves respectively, as
follows:

<TABLE>
<CAPTION>
                                                         September 30, 2004           December 31, 2003
($ IN MILLIONS)                                          ------------------           -----------------
<S>                                                      <C>                          <C>
Subject to discretionary withdrawal:
    With fair value adjustments                               $ 7,529                     $ 6,974
    Subject to surrender charges                                4,611                       6,057
    Surrenderable without charge                                8,126                       5,756
                                                              -------                     -------
    Total                                                     $20,266                     $18,787

Not subject to discretionary withdrawal:                      $26,575                     $24,693
                                                              -------                     -------
    Total                                                     $46,841                     $43,480
                                                              =======                     =======
</TABLE>

There are $511 million and $526 million of life insurance reserves included in
surrenderable without charge at September 30, 2004 and December 31, 2003,
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.

Included in contractholder funds and in the preceding paragraph are GICs
totaling $13.8 billion. The scheduled maturities for these GICs are as follows:

<TABLE>
<CAPTION>
                                       FIXED GIC            VARIABLE GIC              TOTAL
($ in millions)                        ---------            ------------              -----
<S>                                    <C>                  <C>                      <C>
2004 remaining                          $   185                $  690                $   875
2005                                      1,245                 2,928                  4,173
2006                                      1,879                     -                  1,879
2007                                      1,541                     -                  1,541
2008                                      1,329                     -                  1,329
2009 and thereafter                       3,972                     -                  3,972
                                        -------                ------                -------

      Total                             $10,151                $3,618                $13,769
                                        =======                ======                =======
</TABLE>

6. SHAREHOLDER'S EQUITY

Statutory capital and surplus of the Company was $7.6 billion at December 31,
2003. 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 maximum of $845 million is
available by the end of the year 2004 for such dividends without prior approval
of the State of Connecticut Insurance Department, depending upon the amount and
timing of the payments. TLAC may not pay a dividend to TIC without such
approval. Primerica may pay up to $242 million to TIC in 2004 without prior
approval of the Commonwealth of Massachusetts Insurance Department. The Company
paid dividends of $467 million, $153 million and $152 million, totaling $772
million, to its parent on March 30, 2004, June 30, 2004 and September 30, 2004,
respectively. Due to the timing of the payments, these dividends were considered
extraordinary. The State of Connecticut Insurance Department approved these
extraordinary dividends.

                                       15

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)

7. COMMITMENTS AND CONTINGENCIES

Litigation

In August 1999, an amended putative class action complaint captioned Lisa
Macomber, et al. vs. Travelers Property Casualty Corporation, et al. was filed
in New Britain, Connecticut Superior Court against the Company, its parent
corporation, certain of the Company's affiliates (collectively TLA), and the
Company's former affiliate, Travelers Property Casualty Corporation. The amended
complaint alleges Travelers Property Casualty Corporation purchased structured
settlement annuities from the Company and spent less on the purchase of those
structured settlement annuities than agreed with claimants; and that commissions
paid to brokers of structured settlement annuities, including an affiliate of
the Company, were paid, in part, to Travelers Property Casualty Corporation. The
amended complaint was dismissed and following an appeal by 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 nation wide class action involving the following claims against TLA:
violation of the Connecticut Unfair Trade Practice Statute, unjust enrichment
and civil conspiracy. On June 15, 2004, the Defendants, including TLA, appealed
the Connecticut Superior Court's May 26, 2004 class certification order.

The Company is continuing to assess its potential exposure in connection with
this matter, but does not currently believe that its ultimate resolution is
likely to have a material adverse effect on the Company's financial condition.

The Company is a defendant or co-defendant in various other litigation matters
in the normal course of business. These include civil actions, arbitration
proceedings and other matters arising in the normal course of business out of
activities as an insurance company, a broker and dealer in securities or
otherwise. In the opinion of the Company's management, the ultimate resolution
of these legal proceedings would not be likely to have a material adverse effect
on the Company's consolidated results of operations, financial condition or
liquidity.

Other

The Company is a member of the Federal Home Loan Bank of Boston (the Bank), and
in this capacity has entered into a funding agreement (the agreement) with the
Bank where a blanket-lien has been granted to collateralize the Bank's deposits.
The Company maintains control of these assets, and may use, commingle, encumber
or dispose of any portion of the collateral as long as there is no event of
default and the remaining qualified collateral is sufficient to satisfy the
collateral maintenance level. The agreement further states that upon any event
of default, the Bank's recovery is limited to the amount of the member's
outstanding funding agreement. The amount of the Company's liability for funding
agreements with the Bank as of September 30, 2004 is $1 billion, included in
contractholder funds. The Company holds $56.9 million of common stock of the
Bank, included in Investments.

The Company has provided a guarantee on behalf of Citicorp International Life
Insurance Company, Ltd. (CILIC), an affiliate. The Company has guaranteed to pay
claims up to $1 billion of life insurance coverage for CILIC. This guarantee
takes effect if CILIC cannot pay claims because of insolvency, liquidation or
rehabilitation. Life insurance coverage in force under this guarantee at
September 30, 2004 is $269 million. The Company does not hold any collateral
related to this guarantee.

                                       16

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

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

Management's narrative analysis of the results of operations is presented in
lieu of Management's Discussion and Analysis of Financial Condition and Results
of Operations (MDA), pursuant to General Instruction H (2)(a) of Form 10-Q. This
MDA should be read in conjunction with the MDA included in the Company's Annual
Report on Form 10-K for the year ended December 31, 2003.

The Company's Annual Report on Form 10-K, its quarterly reports on Form 10-Q and
any current reports on Form 8-K, and all amendments to these reports, are
available on the Travelers Life & Annuity website at
http://www.travelerslife.com by selecting the "Financial Information" page and
selecting "SEC Filings."

CONSOLIDATED OVERVIEW ($ in millions)

<TABLE>
<CAPTION>
                                                    FOR THE THREE MONTHS         FOR THE NINE MONTHS
                                                     ENDED SEPTEMBER 30,          ENDED SEPTEMBER 30,
                                                      2004         2003           2004         2003
                                                      ----         ----           ----         ----
<S>                                                  <C>          <C>            <C>          <C>
Revenues                                             $1,734       $1,764         $4,773       $ 4,592
Insurance benefits and interest credited                937          994          2,408         2,470
Operating expenses                                      297          243            834           710
                                                     ------       ------         ------       -------
         Income before taxes                            500          527          1,531         1,412
Income taxes                                            154          155            437           364
                                                     ------       ------         ------       -------
Net income                                           $  346       $  372         $1,094       $ 1,048
                                                     ======       ======         ======       =======
</TABLE>

The Travelers Insurance Company (TIC, together with its subsidiaries, the
Company), is comprised of two business segments, Travelers Life & Annuity (TLA)
and Primerica. Net income decreased 7% to $346 million for the quarter ended
September 30, 2004 from $372 million in the prior year quarter. Net income
increased 4% to $1,094 million for the nine months ended September 30, 2004 from
$1,048 million in the prior year period. Net income by segment was:

<TABLE>
<CAPTION>
                                                   FOR THE THREE MONTHS        FOR THE NINE MONTHS
                                                    ENDED SEPTEMBER 30,         ENDED SEPTEMBER 30,
                                                    2004          2003          2004          2003
($ in millions)                                     ----          ----         -----         ------
<S>                                                 <C>           <C>          <C>           <C>
TLA                                                 $223          $265         $ 727         $  725
Primerica                                            123           107           367            323
                                                    ----          ----         ------        ------
                                                    $346          $372         $1,094        $1,048
                                                    ====          ====         ======        ======
</TABLE>

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

The Primerica business segment offers individual life products, primarily term
insurance, to customers through a sales force of approximately 108,000 agents. A
great majority of the domestic licensed sales force works on a part-time basis.

                                       17

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

The following discussion presents in more detail each business segment's
performance.

TRAVELERS LIFE & ANNUITY

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED SEPTEMBER 30,                         2004        2003
($ in millions)                                                  ----        ----
<S>                                                             <C>         <C>
Revenues                                                        $1,297      $1,352
Insurance benefits and interest credited                           797         859
Operating expenses                                                 187         128
                                                                ------      ------
          Income before taxes                                      313         365
Income taxes                                                        90         100
                                                                ------      ------
Net income                                                      $  223      $  265
                                                                ======      ======
</TABLE>

Net income of $223 million in the third quarter of 2004 decreased 16% from $265
million in the third quarter of 2003. The decrease reflects the absence of prior
year after-tax realized investment gains of $29 million, higher expenses due to
increased business volumes and higher deferred acquisition cost (DAC)
amortization, partially offset by the impact of higher business volumes and $13
million after-tax reserve releases from the settlement of litigation.

Net investment income (NII) increased $40 million to $746 million for the third
quarter of 2004 from $706 million in the third quarter of 2003. This increase
was driven by a larger invested asset base from continued growth in business
volumes, partially offset by reduced investment yields, which were 6.37% and
6.63% in the three-month periods ended September 30, 2004 and 2003,
respectively.

The majority of the annuity business and a substantial portion of the life
business written by TLA are accounted for as investment contracts, with the
result that the deposits collected are reported as liabilities. Deposits
represent an operating statistic used for measuring business volumes, which
management of the Company uses to manage the life insurance and annuities
operations, and may not be comparable to similarly captioned measurements used
by other life insurance companies. The following table shows net written
premiums and deposits by product type for each of the quarters ended September,
2004 and 2003.

<TABLE>
<CAPTION>
                                                      2004                 2003
                                                      ----                 ----
                                              Premiums   Deposits    Premiums   Deposits
($ IN MILLIONS)                               --------   --------    --------   --------
<S>                                           <C>        <C>         <C>        <C>
Retail annuities
    Fixed                                      $     -    $   155    $     -    $   114
    Variable                                         -      1,233          -      1,096
    Individual payout                               28         10          5          6
                                               -------    -------    -------    -------
Total retail annuities                              28      1,398          5      1,216
Institutional annuities                            278      2,291        389      2,020
Individual life insurance:
    Direct periodic premiums & deposits             32        201         35        168
    Single premium deposits                          -        184          -        125
    Reinsurance                                    (13)       (31)       (10)       (26)
                                               -------    -------    -------    -------
Total individual life insurance                     19        354         25        267
Other                                                8          -          9          -
                                               -------    -------    -------    -------
                      Total                    $   333    $ 4,043    $   428    $ 3,503
                                               =======    =======    =======    =======
</TABLE>

Retail annuity deposits of $1.4 billion in the third quarter of 2004 increased
15% from the third quarter of 2003, reflecting strong variable annuity sales due
to improved equity market conditions in 2004 and sales of variable annuity
products with a guaranteed minimum withdrawal benefit feature. Retail annuity
account balances were $34.9 billion at September 30, 2004, up from $30.8 billion
at September 30, 2003. This increase reflects equity market growth in variable
annuity investments of $2.2 billion subsequent to September 30, 2003, primarily
$1.8

                                       18

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

billion in the fourth quarter of 2003, and $2.1 billion of net sales over the
previous twelve months, due to sales growth and lower surrender rates.

Institutional annuities deposits (excluding the Company's employee pension plan
deposits) increased 13% in the third quarter of 2004 to $2.3 billion from the
comparable period of 2003, reflecting strong third quarter 2004 GIC sales
compared to the prior year quarter. Institutional annuities premiums declined
$111 million to $278 million in the three months ended September 30, 2004 versus
the prior year period, reflecting the absence of a $291 million pension close
out sale in the third quarter of 2003. Institutional annuity account balances
and benefits reserves reached $27.2 billion at September 30, 2004, up 9% from
$24.9 billion at September 30, 2003. This volume growth reflects an increase in
GIC and payout institutional annuities benefit reserves over the last 12 months.

Deposits for the individual life insurance business for the third quarter of
2004 increased 33% to $354 million from the 2003 third quarter, primarily due to
an increase of $59 million in universal life single deposits and a $33 million
increase in direct periodic premium deposits. Life insurance in force was $97.1
billion at September 30, 2004, up from $89.5 billion at December 31, 2003.

TLA insurance benefits and interest credited decreased 7.2% to $797 million for
the three months ended September 30, 2004 from $859 million in the prior year
period, primarily related to the absence of the $291 million pension close out
reserve in the prior year period and lower credited rates offset by higher
business volumes.

In the third quarter of 2004, TLA operating expenses of $187 million increased
46% from $128 million in the prior year quarter, primarily due to DAC
amortization. The amortization of capitalized DAC is a significant component of
TLA expenses and totaled $123 million and $68 million for the three months ended
September 30, 2004 and 2003, respectively. The increase related to a
retrospective adjustment of $39 million to universal life (UL) DAC and volume
growth in the UL and retail annuity lines of business. This UL adjustment
relates to the changing of the estimated gross profit pattern in the UL product
line related to mortality charges. Re-estimates of gross profits, which are
performed at least annually, result in retrospective adjustments to earnings by
a cumulative charge or credit to income.

PRIMERICA

<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED SEPTEMBER 30,                        2004            2003
($ in millions)                                                 ----            ----
<S>                                                             <C>             <C>
Revenues                                                        $ 437           $ 412
Insurance benefits                                                140             135
Operating expenses                                                110             115
                                                                -----           -----
        Income before taxes                                       187             162
Income taxes                                                       64              55
                                                                -----           -----
Net income                                                      $ 123           $ 107
                                                                =====           =====
</TABLE>

Net income of $123 million in the third quarter of 2004 increased 15% from $107
million in the third quarter of 2003, reflecting favorable business volumes, NII
and expenses largely due to the release of a $10 million legal reserve no longer
deemed necessary. NII increased 9% to $83 million in the third quarter of 2004
from the prior year quarter, primarily related to increased income from private
equities and hedge funds of $3 million and an increase of $8 million from growth
in volume of fixed maturities, partially offset by lower yields.

Total life insurance in force reached $534 billion at September 30, 2004, up
from $503 billion at December 31, 2003, reflecting good in-force policy
retention and higher volume of sales. The face amount of new term life insurance
sales was $23 billion for the three-month period ended September 30, 2004,
compared to $20 billion for the prior year period.

                                       19
<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

The amortization of capitalized DAC, which increased from $60 million in the
third quarter of 2003 to $63 million in the third quarter of 2004, is a
significant component of Primerica's expenses. All of Primerica's DAC is
associated with traditional life products, which are amortized in relation to
anticipated premiums. The increase in the amount of amortization over the third
quarter of 2003 is associated with growth in sales and in-force business.

Earned premiums net of reinsurance were $327 million in the third quarter of
2004 compared to $313 million in the prior year period, including $311 million
and $297 million, respectively, for Primerica individual term life policies.

TRAVELERS LIFE & ANNUITY

<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30,                     2004             2003
($ in millions)                                            -------           ------
<S>                                                       <C>               <C>
Revenues                                                  $ 3,457           $3,359
Insurance benefits and interest credited                    1,995            2,070
Operating expenses                                            474              367
                                                          -------           ------
          Income before taxes                                 988              922
Income taxes                                                  261              197
                                                          -------           ------
Net income                                                $   727           $  725
                                                          =======           ======
</TABLE>

Net income for the nine months ended September 30, 2004 remained level with the
prior year period, primarily related to higher business volumes and higher
retained investment margins, partially offset by a $36 million after-tax
increase in realized investment losses, higher DAC amortization and lower tax
benefits related to an adjustment to a dividends received deduction (DRD), which
was $23 million in the first nine months of 2004 compared to $39 million in the
prior year period. The DRD benefit reduced the effective tax rate to 21% for the
prior year nine-month period ended September 30, 2003 and to 26% in the current
year nine-month period ended September 30, 2004.

NII was $2.2 billion and $2.1 billion for the nine months ended September 30,
2004 and 2003, respectively. This increase was driven by a larger invested asset
base from increased business volumes, partially offset by reduced investment
yields, which were 6.48% and 6.61% for the nine-month periods ended September
30, 2004 and 2003, respectively.

The majority of the annuity business and a substantial portion of the life
business written by TLA are accounted for as investment contracts, such that the
premiums are considered deposits and are not included in revenues. Deposits
represent a statistic integral to managing TLA operations, which management uses
for measuring business volumes, and may not be comparable to similarly captioned
measurements used by other life insurance companies.

                                       20

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

The following table shows net written premiums and deposits by product type for
the nine months ended September 30, 2004 and 2003.

<TABLE>
<CAPTION>
                                                     2004                    2003
                                                     ----                    ----
                                             Premiums    Deposits    Premiums    Deposits
($ IN MILLIONS)                              --------    --------    --------    --------
<S>                                          <C>         <C>         <C>         <C>
Retail annuities
    Fixed                                    $      -    $    437    $      -    $    424
    Variable                                        -       3,704           -       2,852
    Individual payout                              44          26          20          22
                                             --------    --------    --------    --------
Total retail annuities                             44       4,167          20       3,298
Institutional annuities                           523       5,751         658       5,223
Individual life insurance:
    Direct periodic premiums & deposits           102         625         104         494
    Single premium deposits                         -         526           -         254
    Reinsurance                                   (38)        (82)        (28)        (72)
                                             --------    --------    --------    --------
Total individual life insurance                    64       1,069          76         676
Other                                              25           -          26           -
                                             --------    --------    --------    --------
                      Total                  $    656    $ 10,987    $    780    $  9,197
                                             ========    ========    ========    ========
</TABLE>

Retail annuity deposits in the first nine months of 2004 increased 26% from the
prior year period, reflecting strong variable annuity sales due to improved
equity market conditions in 2004 and sales of variable annuity products with a
guaranteed minimum withdrawal benefit feature. Weak equity markets and
competitive pressures adversely affected the first half of 2003.

Institutional annuities deposits (excluding the Company's employee pension plan
deposits) of $5.8 billion in the first nine months of 2004 were up 10% from $5.2
billion in the comparable period of 2003, driven by strong third quarter 2004
GIC sales. The nine-month 2003 sales included $1 billion in funding agreements
sold to the Federal Home Loan Bank of Boston.

Deposits for the life insurance business in the first nine months of 2004 were
up 58% from the comparable period of 2003, driven by very strong universal life
single deposits and higher direct periodic premium sales.

For the first nine months of 2004, TLA operating expenses increased 29% from the
comparable prior year nine-month period, primarily due to an increase of $91
million of DAC amortization, due to growth in business volumes and the UL DAC
retrospective adjustment.

PRIMERICA

<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED SEPTEMBER 30,                         2004              2003
($ in millions)                                                 ----              ----
<S>                                                            <C>               <C>
Revenues                                                       $1,316            $1,233
Insurance benefits                                                413               400
Operating expenses                                                360               343
                                                               ------            ------
        Income before taxes                                       543               490
Income taxes                                                      176               167
                                                               ------            ------
Net income                                                     $  367            $  323
                                                               ======            ======
</TABLE>

Net income for the nine months ended September 30, 2004 increased 14% to $367
million from $323 million for the nine months ended September 30, 2003,
primarily due to an increase in earned premiums and NII, as well as the release
of a $10 million legal reserve that was no longer deemed necessary. These were
partially offset by volume-related increases in DAC amortization.

Earned premiums net of reinsurance were $978 million in the first nine months of
2004 compared to $927 million in the prior year period, including $926 million
and $879 million, respectively, for Primerica Life individual term life
policies.

                                       21
<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

NII increased 8% to $250 million for the nine months of 2004 from the prior
year, primarily related to income of $12 million from private equities and hedge
funds and an increase of $12 million from a growth in volume of fixed
maturities, offset by slightly lower yields.

The amortization of capitalized DAC increased to $190 million in the first nine
months of 2004 from $173 million in the prior year period. Amortized DAC has
increased slightly as a percentage of direct premiums. The increase in the
amount of amortization over 2003 is associated with growth in sales and in-force
business.

OUTLOOK

The Company's business is significantly affected by movements in the U.S. equity
and fixed income credit markets. U.S. equity and credit market events can have
both positive and negative effects on the deposit, revenue and policy retention
performance of the business. A sustained weakness in the equity markets will
decrease revenues and earnings in variable products. Declines in credit quality
of issuers will have a negative effect on earnings. This statement is a
forward-looking statement within the meaning of the Private Securities
Litigation Reform Act. See "Forward-Looking Statements" on this page.

INSURANCE REGULATIONS

Risk-based capital requirements are used as minimum capital requirements by the
National Association of Insurance Commissioners and the states to identify
companies that merit further regulatory action. At December 31, 2003, the
Company had adjusted capital in excess of amounts requiring any regulatory
action.

The Company is subject to various regulatory restrictions that limit the maximum
amount of dividends available to be paid to its parent without prior approval of
insurance regulatory authorities in the state of domicile. A maximum of $845
million is available by the end of 2004 for such dividends without prior
approval of the State of Connecticut Insurance Department, depending upon the
amount and timing of the payments. TLAC may not pay a dividend to TIC without
such approval. Primerica may pay up to $242 million to TIC without prior
approval of the Commonwealth of Massachusetts Insurance Department. The Company
paid dividends of $467 million, $153 million and $152 million to its parent,
totaling $772 million, on March 30, 2004, June 30, 2004 and September 30, 2004,
respectively. Due to the timing of the payments, these dividends were considered
extraordinary. The State of Connecticut Insurance Department approved these
extraordinary dividends. The Company may seek approval from the State of
Connecticut Insurance Department for additional extraordinary dividend payments
during the remainder of 2004. This statement is a forward-looking statement
within the meaning of the Private Securities Litigation Reform Act. See
"Forward-Looking Statements" on this page.

FUTURE APPLICATIONS OF ACCOUNTING STANDARDS

See Note 2 of Notes to Condensed Consolidated Financial Statements for a
discussion of recently issued accounting pronouncements.

FORWARD-LOOKING STATEMENTS

Certain of the statements contained herein that are not historical facts are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act. The Company's actual results may differ materially from
those included in the forward-looking statements. Forward-looking statements are
typically identified by the words "believe," "expect," "anticipate," "intend,"
"estimate," "may increase," "predict," and similar expressions or future or
conditional verbs such as "will," "should," "would," and "could." These forward-
looking statements involve risks and uncertainties including, but not limited
to, regulatory matters, the resolution of legal proceedings and the potential
impact of a decline in credit quality of investments on earnings.

                                       22

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

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 September
30, 2004 and December 31, 2003. The current duration of invested assets as of
September 30, 2004 is 4.8 years. The sensitivity analysis model used by the
Company produces a loss in fair value of interest rate sensitive invested assets
of approximately $2.4 billion and $2.2 billion based on a 100 basis point
increase in interest rates as of September 30, 2004 and December 31, 2003,
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 September
30, 2004 is 5.1 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 $1.8 billion and $1.7 billion based on a
100 basis point increase in interest rates as of September 30, 2004 and December
31, 2003, 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 September 30, 2004 and December 31, 2003 is not
material.

ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

The Company's management, with the participation of the Company's Chief
Executive Officer and Chief Financial Officer, has evaluated the effectiveness
of the Company's disclosure controls and procedures (as such term is defined in
Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as
amended ("Exchange Act")) as of the end of the period covered by this report.
Based on such evaluation, the Company's Chief Executive Officer and Chief
Financial Officer have concluded that, as of the end of such period, the
Company's disclosure controls and procedures are effective in recording,
processing, summarizing and reporting, on a timely basis, information required
to be disclosed by the Company in the reports that it files or submits under the
Exchange Act.

INTERNAL CONTROL OVER FINANCIAL REPORTING

There have not been any changes in the Company's internal control over financial
reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the
Exchange Act) during the fiscal quarter to which this report relates that have
materially affected, or are reasonably likely to materially affect, the
Company's internal control over financial reporting.

                                       23

<PAGE>


                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

                           PART II - OTHER INFORMATION


ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT NO.                              DESCRIPTION
-----------                              -----------
<S>             <C>
   3.01         Charter of The Travelers Insurance Company (the "Company"), as
                effective October 19, 1994, incorporated by reference to Exhibit
                3.01 to the Company's Quarterly Report on Form 10-Q for the
                fiscal quarter ended September 30, 1994 (File No. 33-33691) (the
                "Company's September 30, 1994 10-Q").

   3.02         By-laws of the Company, as effective October 20, 1994,
                incorporated by reference to Exhibit 3.02 to the Company's
                September 30, 1994 10-Q.

   31.01+       Certification of chief financial officer pursuant to Section 302
                of the Sarbanes-Oxley Act of 2002.

   31.02+       Certification of chief executive officer pursuant to Section 302
                of the Sarbanes-Oxley Act of 2002.

   32.01+       Certification pursuant to 18 U.S.C. Section 1350 as adopted
                pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
</TABLE>

(b) REPORTS ON FORM 8-K

None

----------------------------
+Filed herewith

                                       24

<PAGE>

                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES

                                   SIGNATURES

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

                                      THE TRAVELERS INSURANCE COMPANY
                                      -------------------------------
                                                 (Registrant)

Date November 12, 2004     /s/ Glenn D. Lammey
                           -----------------------------------------------------

                           Glenn D. Lammey
                           Senior Executive Vice President,
                           Chief Financial Officer and Chief Accounting Officer
                           (Principal Financial Officer and Principal Accounting
                           Officer)

                                       25