<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 JUNE 30, 2004

                                       OR

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

              FOR THE TRANSITION PERIOD FROM           TO
                                             ---------    ---------

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

                         COMMISSION FILE NUMBER 33-03094

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

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

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

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

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



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

                     Yes     X                 No
                        -----------              -----------

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

                     Yes                       No     X
                        -----------              -----------


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

                            REDUCED DISCLOSURE FORMAT

The registrant meets the conditions set forth in General Instruction H(1)(a) and
(b) of Form 10-Q and is therefore filing this Form 10-Q with the reduced
disclosure format.
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION                                                                                               Page
                                                                                                                             ----
<S>                                                                                                                          <C>
ITEM 1.  FINANCIAL STATEMENTS

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

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

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

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

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

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.........................................................................        14

ITEM 4.  CONTROLS AND PROCEDURES......................................................................................        20

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS............................................................................................        21

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K.............................................................................        21

Signatures............................................................................................................        22

Exhibit 31.01.........................................................................................................        23

Exhibit 31.02.........................................................................................................        24

Exhibit 32.01.........................................................................................................        25
</TABLE>




                                       2
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
                   CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                   (UNAUDITED)
                                 ($ in millions)

<TABLE>
<CAPTION>
                                                        THREE MONTHS ENDED         SIX MONTHS ENDED
                                                             JUNE 30,                  JUNE 30,
                                                       --------------------      --------------------
                                                         2004         2003         2004         2003
                                                       -------      -------      -------      -------
<S>                                                    <C>          <C>          <C>          <C>
REVENUES
Premiums                                               $   494      $   498      $   974      $   966
Net investment income                                      812          751        1,646        1,515
Realized investment gains (losses)                         (25)          (1)         (12)           2
Fee income                                                 195          144          377          289
Other revenues                                              15           29           54           56
                                                       -------      -------      -------      -------
     Total Revenues                                      1,491        1,421        3,039        2,828
                                                       -------      -------      -------      -------

BENEFITS AND EXPENSES
Current and future insurance benefits                      415          439          845          854
Interest credited to contractholders                       316          314          626          622
Amortization of deferred acquisition costs                 153          121          295          245
General and administrative expenses                        111          111          242          222
                                                       -------      -------      -------      -------
     Total Benefits and Expenses                           995          985        2,008        1,943
                                                       -------      -------      -------      -------
Income from operations before federal income taxes         496          436        1,031          885
                                                       -------      -------      -------      -------
Federal income taxes                                       153          121          283          209
                                                       -------      -------      -------      -------
     Net Income                                        $   343      $   315      $   748      $   676
                                                       =======      =======      =======      =======
</TABLE>




            See Notes to Condensed Consolidated Financial Statements.




                                       3
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
                      CONDENSED CONSOLIDATED BALANCE SHEETS
                                 ($ in millions)

<TABLE>
<CAPTION>
                                                                JUNE 30, 2004   DECEMBER 31, 2003
                                                                 (UNAUDITED)
                                                                -------------   -----------------
<S>                                                             <C>             <C>
ASSETS
Investments (including $2,736 and $2,170 subject to securities
   lending agreements)                                             $58,002           $56,204
Separate and variable accounts                                      28,487            26,972
Reinsurance recoverable                                              4,574             4,470
Deferred acquisition costs                                           4,658             4,395
Other assets                                                         2,840             3,307
                                                                   -------           -------
     Total Assets                                                  $98,561           $95,348
                                                                   -------           -------

LIABILITIES
Contractholder funds                                               $32,202           $30,252
Future policy benefits and claims                                   16,191            15,964
Separate and variable accounts                                      28,487            26,972
Other liabilities                                                    8,740             8,803
                                                                   -------           -------
     Total Liabilities                                              85,620            81,991
                                                                   -------           -------

SHAREHOLDER'S EQUITY
Common stock, par value $2.50; 40 million shares authorized,
     issued and outstanding                                            100               100
Additional paid-in capital                                           5,447             5,446
Retained earnings                                                    6,579             6,451
Accumulated other changes in equity from nonowner sources              815             1,360
                                                                   -------           -------
     Total Shareholder's Equity                                     12,941            13,357
                                                                   -------           -------

     Total Liabilities and Shareholder's Equity                    $98,561           $95,348
                                                                   =======           =======
</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           SIX MONTHS ENDED
                                                                  JUNE 30,                    JUNE 30,
                                                           ----------------------      ----------------------
COMMON STOCK                                                 2004          2003          2004          2003
                                                           --------      --------      --------      --------
<S>                                                        <C>           <C>           <C>           <C>
Balance, beginning of period                               $    100      $    100      $    100      $    100
Changes in common stock                                          --            --            --            --
                                                           --------      --------      --------      --------
Balance, end of period                                     $    100      $    100      $    100      $    100
                                                           ========      ========      ========      ========

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

RETAINED EARNINGS
Balance, beginning of period                               $  6,389      $  5,935      $  6,451      $  5,638
Net income                                                      343           315           748           676
Dividends to parent                                            (153)          (99)         (620)         (163)
                                                           --------      --------      --------      --------
Balance, end of period                                     $  6,579      $  6,151      $  6,579      $  6,151
                                                           ========      ========      ========      ========

ACCUMULATED OTHER CHANGES
IN EQUITY FROM NONOWNER SOURCES
Balance, beginning of period                               $  1,795      $    835      $  1,360      $    454
Foreign currency translation, net of tax                          1            --             1             2
Unrealized gains (losses), net of tax                        (1,060)          763          (606)        1,112
Derivative instrument hedging activity gains,
    net of tax                                                   79            --            60            30
                                                           --------      --------      --------      --------
Balance, end of period                                     $    815      $  1,598      $    815      $  1,598
                                                           ========      ========      ========      ========

SUMMARY OF CHANGES IN EQUITY
FROM NONOWNER SOURCES
Net income                                                 $    343      $    315      $    748      $    676
Other changes in equity from nonowner sources                  (980)          763          (545)        1,144
                                                           --------      --------      --------      --------
Total changes in equity from nonowner sources              $   (637)     $  1,078      $    203      $  1,820
                                                           ========      ========      ========      ========

TOTAL SHAREHOLDER'S EQUITY
Balance, beginning of period                               $ 13,732      $ 12,314      $ 13,357      $ 11,635
Changes in nonowner sources                                    (637)        1,078           203         1,820
Dividends                                                      (153)          (99)         (620)         (163)
Changes in additional paid-in capital                            (1)           --             1             1
                                                           --------      --------      --------      --------
Balance, end of period                                     $ 12,941      $ 13,293      $ 12,941      $ 13,293
                                                           ========      ========      ========      ========
</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>
                                                                 SIX MONTHS ENDED
                                                                     JUNE 30,
                                                              ----------------------
                                                                2004          2003
                                                              --------      --------
<S>                                                           <C>           <C>
NET CASH PROVIDED BY OPERATING ACTIVITIES                     $    280      $    274
                                                              --------      --------

CASH FLOWS FROM INVESTING ACTIVITIES
     Proceeds from maturities of investments
              Fixed maturities                                   3,344         3,227
              Equity securities                                     79            --
              Mortgage loans                                       379           128
     Proceeds from sales of investments
              Fixed maturities                                   4,752         6,064
              Equity securities                                     48            67
              Real estate held for sale                             41             5

     Purchases of investments
              Fixed maturities                                 (10,105)      (11,350)
              Equity securities                                    (72)         (105)
              Mortgage loans                                      (439)         (127)
     Policy loans, net                                               2            15
     Short-term securities purchases, net                         (104)          (60)
     Other investment sales, net                                   184           126
     Securities transactions in course of settlement, net          684            24
                                                              --------      --------
     Net cash used in investing activities                      (1,207)       (1,986)
                                                              --------      --------

CASH FLOWS FROM FINANCING ACTIVITIES
     Contractholder fund deposits                                4,557         4,186
     Contractholder fund withdrawals                            (2,960)       (2,334)
     Dividends to parent company                                  (620)         (163)
                                                              --------      --------
     Net cash provided by financing activities                     977         1,689
                                                              --------      --------
Net increase (decrease) in cash                                     50           (23)
Cash at beginning of period                                        149           186
                                                              --------      --------
Cash at end of period                                         $    199      $    163
                                                              ========      ========

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
     Income taxes paid                                        $     62      $    305
                                                              ========      ========
</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 six months of
     2004, the Company capitalized sales inducements of approximately
     $19.6 million in accordance with SOP 03-1. These inducements relate to
     bonuses on certain products offered by the Company. For the three and six
     months ended June 30, 2004, amortization of these capitalized amounts was
     immaterial.



                                       8
<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 six month periods ended June 30, 2004 and
     2003.

     FUTURE APPLICATION OF ACCOUNTING STANDARDS

     OTHER-THAN-TEMPORARY IMPAIRMENTS OF CERTAIN INVESTMENTS

     On March 31, 2004, the FASB ratified EITF Issue No. 03-1, "The Meaning of
     Other-Than-Temporary Impairment and Its Application to Certain
     Investments," (EITF 03-1) which provides guidance on recognizing
     other-than-temporary impairments on certain investments. The Issue is
     effective for other-than-temporary impairment evaluations for investments
     accounted for under SFAS No. 115, "Accounting for Certain Investments in
     Debt and Equity Securities," as well as non-marketable equity securities
     accounted for under the cost method for reporting periods beginning after
     June 15, 2004. The Company is evaluating the impact of adopting EITF 03-1
     and has not yet completed this analysis.

3.   INVESTMENTS

     VARIABLE INTEREST ENTITIES

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

<TABLE>
<CAPTION>
              $ in millions                              JUNE 30, 2004    DECEMBER 31, 2003
              -------------                              -------------    -----------------
<S>                                                      <C>              <C>
              Investments                                     $387               $400
              Cash                                              14                 11
              Other                                              4                  4
                                                              ----               ----
              Total assets of consolidated VIEs               $405               $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.




                                       10
<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, payout annuities, group annuities sold to
     employer-sponsored retirement and savings plans and structured settlements
     and funding agreements.

     The PRIMERICA business segment consolidates the business of Primerica Life,
     Primerica Life Insurance Company of Canada, CitiLife and NBL. The Primerica
     business segment offers individual life products, primarily term insurance,
     to customers through a sales force of approximately 106,000 agents. A great
     majority of the domestic licensed sales force works on a part-time basis.

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

<TABLE>
<CAPTION>
                                  FOR THE THREE MONTHS ENDED   FOR THE SIX MONTHS ENDED
                                           JUNE 30,                    JUNE 30,
                                       2004        2003            2004        2003
                                      ------      ------          ------      ------
<S>                               <C>             <C>          <C>            <C>
     REVENUES BY SEGMENT
     TLA                              $1,055      $1,012          $2,160      $2,007
     Primerica                           436         409             879         821
                                      ------      ------          ------      ------
     Total Revenues                   $1,491      $1,421          $3,039      $2,828
                                      ======      ======          ======      ======

     NET INCOME BY SEGMENT
     TLA                              $  223      $  206          $  504      $  460
     Primerica                           120         109             244         216
                                      ------      ------          ------      ------


     Net Income                       $  343      $  315          $  748      $  676
                                      ======      ======          ======      ======
</TABLE>

<TABLE>
<CAPTION>
                                                             AT JUNE 30,
     ASSETS BY SEGMENT                                  2004               2003
                                                      -------            -------
<S>                                                   <C>                <C>
     TLA                                              $89,123            $80,904
     Primerica                                          9,438              9,173
                                                      -------            -------
     Total Assets                                     $98,561            $90,077
                                                      =======            =======
</TABLE>




                                       11
<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>
FOR THE THREE MONTHS ENDED                                 2004                        2003
                                                  ----------------------      ----------------------
JUNE 30, ($ in millions)                            TLA        PRIMERICA        TLA        PRIMERICA
------------------------                            ---        ---------        ---        ---------
<S>                                               <C>           <C>           <C>           <C>
Premiums                                          $  168        $  326        $  191        $  307
Net investment income                                729            83           673            78
Interest credited to contractholders                 316            --           314            --
Amortization of deferred acquisition costs            89            64            64            57
Capitalized deferred acquisition costs               161            98           132            98
Federal income taxes                                  91            62            64            57
</TABLE>


<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED                                   2004                        2003
                                                  ----------------------      ----------------------
JUNE 30, ($ in millions)                            TLA        PRIMERICA        TLA        PRIMERICA
------------------------                            ---        ---------        ---        ---------
<S>                                               <C>           <C>           <C>           <C>
Premiums                                          $  323        $  651        $  352        $  614
Net investment income                              1,479           167         1,359           156
Interest credited to contractholders                 626            --           622            --
Amortization of deferred acquisition costs           168           127           132           113
Capitalized deferred acquisition costs               338           181           250           186
Federal income taxes                                 171           112            97           112
</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 June 30, 2004
     and 2003, deposits collected amounted to $3.7 billion and $2.6 billion,
     respectively. For the six months ended June 30, 2004 and 2003, deposits
     amounted to $6.9 billion and $5.7 billion, respectively.

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

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

5.   SHAREHOLDER'S EQUITY

      Statutory capital and surplus of the Company was $7.6 billion at December
      31, 2003. The Company is currently subject to various regulatory
      restrictions that limit the maximum amount of dividends available to be
      paid to its parent without prior approval of insurance regulatory
      authorities. A maximum of $845 million is available by the end of the year
      2004 for such dividends without prior approval of the State of Connecticut
      Insurance Department, depending upon the amount and timing of the
      payments. TLAC may not pay a dividend to TIC without such approval.
      Primerica may pay up to $242 million to TIC in 2004 without prior approval
      of the Commonwealth of Massachusetts Insurance Department. The Company
      paid dividends of $467 million and $153 million to its parent on March 30,
      2004 and June 30, 2004, respectively. Due to the

                                       12
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES
        NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
                                   (CONTINUED)


      timing of the payments, both these dividends were considered
      extraordinary. The State of Connecticut Insurance Department approved
      these extraordinary dividends.

6.   COMMITMENTS AND CONTINGENCIES

     Litigation

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

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

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

     Other

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

     The Company has provided a guarantee on behalf of Citicorp International
     Life Insurance Company, Ltd. (CILIC), an affiliate. The Company has
     guaranteed to pay claims up to $1 billion of life insurance coverage for
     CILIC. This guarantee takes effect if CILIC cannot pay claims because of
     insolvency, liquidation or rehabilitation. Life insurance coverage in force
     under this guarantee at June 30, 2004 is $187 million. The Company does not
     hold any collateral related to this guarantee.




                                       13
<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 ENDED           FOR THE SIX MONTHS ENDED
                                                                   JUNE 30,                            JUNE 30,
                                                            2004              2003              2004              2003
                                                           ------            ------            ------            ------
<S>                                                       <C>                <C>               <C>               <C>
       Revenues                                            $1,491            $1,421            $3,039            $2,828
       Insurance benefits and interest credited               731               753             1,471             1,476
       Operating expenses                                     264               232               537               467
                                                           ------            ------            ------            ------
                Income before taxes                           496               436             1,031               885
       Income taxes                                           153               121               283               209
                                                           ------            ------            ------            ------
       Net income                                          $  343            $  315            $  748            $  676
                                                           ======            ======            ======            ======
</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 increased 9% to $343 million for the quarter ended
June 30, 2004 from $315 million in the prior year quarter. Net income increased
11% to $748 million for the six months ended June 30, 2004 from $676 million in
the prior year period. Net income by segment was:

<TABLE>
<CAPTION>
                               FOR THE THREE MONTHS ENDED       FOR THE SIX MONTHS ENDED
                                        JUNE 30,                        JUNE 30,
       ($ in millions)            2004            2003            2004            2003
                                  ----            ----            ----            ----
<S>                            <C>                <C>           <C>               <C>
       TLA                        $223            $206            $504            $460
       Primerica                   120             109             244             216
                                  ----            ----            ----            ----
                                  $343            $315            $748            $676
                                  ====            ====            ====            ====
</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 106,000 agents. A
great majority of the domestic licensed sales force works on a part-time basis.



                                       14
<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 JUNE 30,                    2004         2003
                                                             ------       ------
       ($ in millions)
<S>                                                          <C>          <C>
       Revenues                                              $1,055       $1,012
       Insurance benefits and interest credited                 600          624
       Operating expenses                                       141          118
                                                             ------       ------
                 Income before taxes                            314          270
       Income taxes                                              91           64
                                                             ------       ------
       Net income                                            $  223       $  206
                                                             ======       ======
</TABLE>

Net income of $223 million in the second quarter of 2004 increased 8% from $206
million in the second quarter of 2003. The increase reflects favorable business
volumes, and higher retained investment margins and an $11 million after-tax
release of institutional annuities benefit reserves, partially offset by
realized investment losses and higher expenses, including higher deferred
acquisition cost (DAC) amortization.

Net investment income (NII) increased $56 million to $729 million for the second
quarter of 2004 from $673 million in the second quarter of 2003. This increase
was driven by a larger invested asset base from increased business volumes,
partially offset by reduced investment yields, which were 6.36% and 6.42% in the
three-month periods ended June 30, 2004 and 2003, respectively.

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

<TABLE>
<CAPTION>
                                                      2004                      2003
                                                      ----                      ----
  ($ IN MILLIONS)                             Premiums     Deposits     Premiums     Deposits
<S>                                           <C>          <C>          <C>          <C>
  Retail annuities
      Fixed                                   $    --      $   134      $    --      $   174
      Variable                                     --        1,254           --          953
      Individual payout                            10            8            5            6
                                              -------      -------      -------      -------
  Total retail annuities                           10        1,396            5        1,133
  Institutional annuities                         127        2,001          152        1,209
  Individual life insurance:
      Direct periodic premiums & deposits          35          170           36          150
      Single premium deposits                      --          173           --           80
      Reinsurance                                 (13)         (25)         (11)         (23)
                                              -------      -------      -------      -------
  Total individual life insurance                  22          318           25          207
  Other                                             9           --            9           --
                                              -------      -------      -------      -------
                        Total                 $   168      $ 3,715      $   191      $ 2,549
                                              =======      =======      -------      =======
</TABLE>

Retail annuity deposits of $1.4 billion in the second quarter of 2004 increased
23% from the second quarter of 2003, reflecting strong variable annuity sales
due to improved equity market conditions in 2004 and sales of a guaranteed
minimum withdrawal benefit feature. Retail annuity account balances were $34.7
billion at June 30, 2004, up from $29.8 billion at June 30, 2003. This increase
reflects equity market growth in variable annuity investments of $2.9 billion
subsequent to June 30, 2003, and $2.0 billion of net sales over the previous
twelve months, due to sales growth and lower surrender rates.



                                       15
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES


Institutional annuities deposits (excluding the Company's employee pension plan
deposits) increased 66% in the second quarter of 2004 to $2.0 billion from the
comparable period of 2003, reflecting strong second quarter 2004 GIC sales
compared to the prior year quarter. Institutional annuity account balances and
benefits reserves reached $26.5 billion at June 30, 2004, up 12% from $23.6
billion at June 30, 2003. This volume growth reflects an increase in GIC and
payout institutional annuities benefit reserves over the last 12 months.

Deposits for the individual life insurance business for the second quarter of
2004 increased 54% to $318 million from the 2003 second quarter, primarily due
to an increase of $93 million in universal life single premium sales and a $20
million increase in direct periodic premium sales. Life insurance in force was
$94.3 billion at June 30, 2004, up from $89.5 billion at December 31, 2003.

TLA insurance benefits and interest credited decreased 3.8% to $600 million for
the three months ended June 30, 2004 from $624 million in the prior year period,
primarily related to a $16 million pretax release of institutional annuities
benefits reserves and lower credited rates offset by higher business volumes.

In the second quarter of 2004, TLA operating expenses of $141 million increased
19% from $118 million in the prior year quarter, primarily due to volume-related
insurance benefits expenses and DAC amortization. The amortization of
capitalized DAC is a significant component of TLA expenses and totaled $89
million and $64 million for the three months ended June 30, 2004 and 2003,
respectively. TLA's recording of DAC varies based upon product type. DAC for
retail annuities, both fixed and variable, and payout annuities employs a level
yield methodology. DAC for universal life and COLI are amortized in relation to
estimated gross profits, with traditional life, including term insurance and
other products amortized in relation to anticipated premiums.

PRIMERICA

<TABLE>
<CAPTION>
       FOR THE THREE MONTHS ENDED JUNE 30,                     2004         2003
                                                               ----         ----
       ($ in millions)
<S>                                                            <C>          <C>
       Revenues                                                $436         $409
       Insurance benefits                                       131          129
       Operating expenses                                       123          114
                                                               ----         ----
               Income before taxes                              182          166
       Income taxes                                              62           57
                                                               ----         ----
       Net income                                              $120         $109
                                                               ====         ====
</TABLE>

Net income of $120 million in the second quarter of 2004 increased 10% from $109
million in the second quarter of 2003, reflecting favorable business volumes and
higher NII, partially offset by higher DAC amortization and volume-related
insurance benefits expenses. NII increased 6% to $83 million in the second
quarter of 2004 from the prior year quarter, primarily related to income from
private equities of $7.9 million and a larger invested asset base, partially
offset by lower yields.

Total life insurance in force reached $522.0 billion at June 30, 2004, up from
$503.6 billion at December 31, 2003, reflecting good in-force policy retention
and higher volume of sales. The face amount of new term life insurance sales was
$24.5 billion for the three-month period ended June 30, 2004, compared to $20.9
billion for the prior year period.

The amortization of capitalized DAC, which increased from $57 million in the
second quarter of 2003 to $64 million in the second quarter of 2004, is a
significant component of Primerica's expenses. All of Primerica's DAC is
associated with traditional life products, which are amortized in relation to
anticipated premiums. Amortized DAC has increased slightly as a percentage of
direct premiums. The increase in the amount of amortization over the second
quarter of 2003 is associated with growth in sales and in-force business.


                                       16
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES


Earned premiums net of reinsurance were $326 million in the second quarter of
2004 compared to $307 million in the prior year period, including $307 million
and $290 million, respectively, for Primerica individual term life policies.

TRAVELERS LIFE & ANNUITY

<TABLE>
<CAPTION>
       FOR THE SIX MONTHS ENDED JUNE 30,                      2004         2003
                                                             ------       ------
       ($ in millions)
<S>                                                          <C>          <C>
       Revenues                                              $2,160       $2,007
       Insurance benefits and interest credited               1,197        1,211
       Operating expenses                                       288          239
                                                             ------       ------
                 Income before taxes                            675          557
       Income taxes                                             171           97
                                                             ------       ------
       Net income                                            $  504       $  460
                                                             ======       ======
</TABLE>

Net income for the six months ended June 30, 2004 increased 10% to $504 million
from $460 million from the prior year period, primarily related to higher
business volumes, higher retained investment margins and an $11 million
after-tax release of institutional annuities benefit reserves, partially offset
by an $8 million after-tax increase in realized investment losses, higher DAC
amortization and lower tax benefits related to an adjustment to a dividends
received deduction (DRD), which was $23 million in the first six months of 2004
and $39 million in the prior year period. The DRD benefit reduced the effective
tax rate to 17% for the prior year six month period ended June 30, 2003 and to
25% in the current year six month period ended June 30, 2004.

NII was $1.5 billion and $1.4 billion for the six months ended June 30, 2004 and
2003, respectively. This increase was driven by a larger invested asset base
from increased business volumes, partially offset by reduced investment yields,
which were 6.54% and 6.60% for the six month periods ended June 30, 2004 and
2003, respectively.

The majority of the annuity business and a substantial portion of the life
business written by TLA are accounted for as investment contracts, such that the
premiums are considered deposits and are not included in revenues. Deposits
represent a statistic integral to managing TLA operations, which management uses
for measuring business volumes, and may not be comparable to similarly captioned
measurements used by other life insurance companies. The following table shows
net written premiums and deposits by product type for the six months ended June
30, 2004 and 2003.

<TABLE>
<CAPTION>
                                                     2004                            2003
                                                     ----                            ----
($ IN MILLIONS)                            Premiums        Deposits        Premiums        Deposits
                                           --------        --------        --------        --------
<S>                                        <C>             <C>             <C>             <C>
Retail annuities
    Fixed                                  $    --         $   282         $    --         $   310
    Variable                                    --           2,471              --           1,756
    Individual payout                           16              16              15              16
                                           -------         -------         -------         -------
Total retail annuities                          16           2,769              15           2,082
Institutional annuities                        245           3,460             269           3,203
Individual life insurance:
    Direct periodic premiums & deposits         70             424              69             326
    Single premium deposits                     --             342              --             129
    Reinsurance                                (25)            (51)            (18)            (46)
                                           -------         -------         -------         -------
Total individual life insurance                 45             715              51             409
Other                                           17              --              17              --
                                           -------         -------         -------         -------
                      Total                $   323         $ 6,944         $   352         $ 5,694
                                           =======         =======         =======         =======
</TABLE>



                                       17
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES


Retail annuity deposits in the first six months of 2004 increased 33% from the
prior year period, reflecting strong variable annuity sales due to improved
equity market conditions in 2004 and sales of a guaranteed minimum withdrawal
benefit feature. Weak equity markets and competitive pressures adversely
affected the first half of 2003.

Institutional annuities deposits (excluding the Company's employee pension plan
deposits) of $3.5 billion in the first six months of 2004 were up 8% from $3.2
billion in the comparable period of 2003, driven by strong second quarter 2004
GIC sales. The six month 2003 sales included $800 million in funding agreements
sold to the Federal Home Loan Bank of Boston in the first quarter of 2003.

Deposits for the life insurance business in the first six months of 2004 were up
75% from the comparable period of 2003, driven by very strong universal life
single premium sales and higher direct periodic premium sales.

For the first six months of 2004, TLA operating expenses increased 21% from the
comparable prior year six month period, primarily due to an increase of $36
million of DAC amortization.

PRIMERICA

<TABLE>
<CAPTION>
FOR THE SIX MONTHS ENDED JUNE 30,                           2004            2003
                                                            ----            ----
($ in millions)
<S>                                                         <C>             <C>
Revenues                                                    $879            $821
Insurance benefits                                           274             265
Operating expenses                                           249             228
                                                            ----            ----
        Income before taxes                                  356             328
Income taxes                                                 112             112
                                                            ----            ----
Net income                                                  $244            $216
                                                            ====            ====
</TABLE>

Net income for the six months ended June 30, 2004 increased 13% to $244 million
from $216 million for the six months ended June 30, 2003. Included in net income
are net after-tax realized investment gains of $2 million and $4 million for the
2004 and 2003 six-month periods, respectively.

NII increased 7% to $167 million for the six months of 2004 from the prior year,
primarily related to income of $11.7 million from private equities and a larger
invested asset base, offset by lower yields.

The amortization of capitalized DAC increased to $127 million in the first six
months of 2004 from $113 million in the prior year period. Amortized DAC has
increased slightly as a percentage of direct premiums. The increase in the
amount of amortization over 2003 is associated with growth in sales and in-force
business.

Earned premiums net of reinsurance were $651 million in the first six months of
2004 compared to $614 million in the prior year period, including $615 million
and $582 million, respectively, for Primerica Life individual term life
policies.

OUTLOOK

The Company's business is significantly affected by movements in the U.S. equity
and fixed income credit markets. U.S. equity and credit market events can have
both positive and negative effects on the deposit, revenue and policy retention
performance of the business. A sustained weakness in the equity markets will
decrease revenues and earnings in variable products. Declines in credit quality
of issuers will have a negative effect on earnings. This statement is a
forward-looking statement within the meaning of the Private Securities
Litigation Reform Act. See "Forward-Looking Statements" on page 19.



                                       18
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES


INSURANCE REGULATIONS

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

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

FUTURE APPLICATIONS OF ACCOUNTING STANDARDS

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

FORWARD-LOOKING STATEMENTS

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


                                       19
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES


ITEM 4.  CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

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

INTERNAL CONTROL OVER FINANCIAL REPORTING

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




                                       20
<PAGE>
                THE TRAVELERS INSURANCE COMPANY AND SUBSIDIARIES


                           PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

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

ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(A)  EXHIBITS

<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




                                       21
<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     August 13, 2004                /s/ Glenn D. Lammey
    --------------------------          ----------------------------------------

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




                                       22