<PAGE>

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

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

                                   FORM 10-Q

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



            FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2005



                                         OR




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



            FOR THE TRANSITION PERIOD FROM        TO
</Table>

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

                        COMMISSION FILE NUMBER: 33-58677
                             ---------------------

                     THE TRAVELERS LIFE AND ANNUITY COMPANY
             (Exact name of registrant as specified in its charter)

<Table>
<S>                                            <C>
                 CONNECTICUT                                     06-0904249
       (State or other jurisdiction of                        (I.R.S. Employer
        incorporation or organization)                     Identification Number)

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

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

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

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

     Indicate by check mark whether the Registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act).  Yes [ ]     No [X]

     At November 18, 2005, 30,000 shares of the Registrant's Common Stock, $100
par value per share, were outstanding, all of which are owned by The Travelers
Insurance Company, a wholly-owned subsidiary of MetLife, Inc.

                           REDUCED DISCLOSURE FORMAT

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

                               TABLE OF CONTENTS

<Table>
<Caption>
                                                              PAGE
                                                              ----
<S>                                                           <C>
PART I -- FINANCIAL INFORMATION
  ITEM 1.  FINANCIAL STATEMENTS.............................    4
  Interim Condensed Balance Sheets at September 30, 2005
     (Successor) (Unaudited) and December 31, 2004
     (Predecessor)..........................................    4
  Interim Condensed Statements of Income for the Three
     Months Ended September 30, 2005 (Successor) and 2004
     (Predecessor) (Unaudited)..............................    5
  Interim Condensed Statements of Income for the Three
     Months Ended September 30, 2005 (Successor) and the Six
     Months Ended June 30, 2005 (Predecessor) and the Nine
     Months Ended September 30, 2004 (Predecessor)
     (Unaudited)............................................    6
  Interim Condensed Statements of Stockholder's Equity for
     the Three Months Ended September 30, 2005 (Successor)
     and the Six Months Ended June 30, 2005 (Predecessor)
     (Unaudited)............................................    7
  Interim Condensed Statements of Cash Flows for the Three
     Months Ended September 30, 2005 (Successor) and the Six
     Months Ended June 30, 2005 (Predecessor) and the Nine
     Months Ended September 30, 2004 (Predecessor)
     (Unaudited)............................................    8
  Notes to Interim Condensed Financial Statements
     (Unaudited)............................................    9
  ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
         CONDITION AND RESULTS OF OPERATIONS................   29
  ITEM 4.  CONTROLS AND PROCEDURES..........................   35


PART II -- OTHER INFORMATION
  ITEM 1.  LEGAL PROCEEDINGS................................   36
  ITEM 6.  EXHIBITS.........................................   36
  SIGNATURES................................................   37
  EXHIBIT INDEX.............................................   38
</Table>

                                        2
<PAGE>

NOTE REGARDING FORWARD-LOOKING STATEMENTS

     This Quarterly Report on Form 10-Q, including the Management's Discussion
and Analysis of Financial Condition and Results of Operations, contains
statements which constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995, including statements relating
to trends in the operations and financial results and the business and the
products of The Travelers Life and Annuity Company, as well as other statements
including words such as "anticipate," "believe," "plan," "estimate," "expect,"
"intend" and other similar expressions. Forward-looking statements are made
based upon management's current expectations and beliefs concerning future
developments and their potential effects on The Travelers Life and Annuity
Company. Such forward-looking statements are not guarantees of future
performance. See "Management's Discussion and Analysis of Financial Condition
and Results of Operations."

                                        3
<PAGE>

PART I -- FINANCIAL INFORMATION

ITEM 1.  FINANCIAL STATEMENTS

                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

                        INTERIM CONDENSED BALANCE SHEETS
              SEPTEMBER 30, 2005 (UNAUDITED) AND DECEMBER 31, 2004

                 (IN MILLIONS, EXCEPT SHARE AND PER SHARE DATA)

<Table>
<Caption>
                                                                  SUCCESSOR           PREDECESSOR
                                                              ------------------   -----------------
                                                              SEPTEMBER 30, 2005   DECEMBER 31, 2004
                                                              ------------------   -----------------
<S>                                                           <C>                  <C>
ASSETS
Investments:
  Fixed maturities available-for-sale, at fair value
     (amortized cost: $5,848 and $5,929, respectively)......       $ 5,752              $ 6,261
  Equity securities available-for-sale, at fair value (cost:
     $22 and $23, respectively).............................            22                   26
  Mortgage loans on real estate.............................           270                  212
  Policy loans..............................................            36                   32
  Real estate and real estate joint ventures
     held-for-investment....................................            --                    9
  Other limited partnership interests.......................            76                  219
  Short-term investments....................................           157                  420
  Other invested assets.....................................           340                  150
                                                                   -------              -------
     Total investments......................................         6,653                7,329
Cash and cash equivalents...................................           398                    1
Accrued investment income...................................            65                   84
Premiums and other receivables..............................           279                  119
Deferred policy acquisition costs and value of business
  acquired..................................................         1,715                1,533
Goodwill....................................................           224                   --
Net deferred income tax asset...............................            34                   --
Other assets................................................            26                  128
Separate account assets.....................................        12,047               11,631
                                                                   -------              -------
     Total assets...........................................       $21,441              $20,825
                                                                   =======              =======

LIABILITIES AND STOCKHOLDER'S EQUITY
Liabilities:
  Future policy benefits....................................       $ 1,434              $ 1,073
  Policyholder account balances.............................         5,688                5,227
  Other policyholder funds..................................            43                    6
  Current income taxes payable..............................            60                  265
  Deferred income tax liability.............................            --                  180
  Other liabilities.........................................           234                  482
  Separate account liabilities..............................        12,047               11,631
                                                                   -------              -------
     Total liabilities......................................        19,506               18,864
                                                                   -------              -------
Stockholder's Equity:
Common stock, par value $100 per share; 100,000 shares
  authorized, 30,000 shares issued and outstanding at
  September 30, 2005 and December 31, 2004..................             3                    3
Additional paid-in capital..................................         1,933                  817
Retained earnings...........................................            31                  922
Accumulated other comprehensive (loss) income...............           (32)                 219
                                                                   -------              -------
     Total stockholder's equity.............................         1,935                1,961
                                                                   -------              -------
     Total liabilities and stockholder's equity.............       $21,441              $20,825
                                                                   =======              =======
</Table>

       SEE ACCOMPANYING NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS.
                                        4
<PAGE>

                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

                     INTERIM CONDENSED STATEMENTS OF INCOME
       FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND 2004 (UNAUDITED)

                                 (IN MILLIONS)

<Table>
<Caption>
                                                               SUCCESSOR           PREDECESSOR
                                                           ------------------   ------------------
                                                           THREE MONTHS ENDED   THREE MONTHS ENDED
                                                           SEPTEMBER 30, 2005   SEPTEMBER 30, 2004
                                                           ------------------   ------------------
<S>                                                        <C>                  <C>
REVENUES
Premiums.................................................         $  7                 $  8
Universal life and investment-type product policy fees...          117                   94
Net investment income....................................           87                   98
Other revenues...........................................            5                    6
Net investment gains (losses)............................            8                   10
                                                                  ----                 ----
  Total revenues.........................................          224                  216
                                                                  ----                 ----
EXPENSES
Policyholder benefits and claims.........................           44                   23
Interest credited to policyholder account balances.......           38                   63
Other expenses...........................................           98                   95
                                                                  ----                 ----
  Total expenses.........................................          180                  181
                                                                  ----                 ----
Income before provision for income taxes.................           44                   35
Provision for income taxes...............................           13                   11
                                                                  ----                 ----
Net income...............................................         $ 31                 $ 24
                                                                  ====                 ====
</Table>

       SEE ACCOMPANYING NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS.
                                        5
<PAGE>

                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

                     INTERIM CONDENSED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND THE SIX MONTHS ENDED JUNE 30,
                                      2005
            AND THE NINE MONTHS ENDED SEPTEMBER 30, 2004 (UNAUDITED)

                                 (IN MILLIONS)

<Table>
<Caption>
                                                SUCCESSOR                     PREDECESSOR
                                            ------------------   -------------------------------------
                                            THREE MONTHS ENDED   SIX MONTHS ENDED   NINE MONTHS ENDED
                                            SEPTEMBER 30, 2005    JUNE 30, 2005     SEPTEMBER 30, 2004
                                            ------------------   ----------------   ------------------
<S>                                         <C>                  <C>                <C>
REVENUES
Premiums..................................         $  7                $ 20                $ 28
Universal life and investment-type product
  policy fees.............................          117                 221                 247
Net investment income.....................           87                 223                 288
Other revenues............................            5                  12                  15
Net investment gains (losses).............            8                  (6)                  6
                                                   ----                ----                ----
  Total revenues..........................          224                 470                 584
                                                   ----                ----                ----
EXPENSES
Policyholder benefits and claims..........           44                  49                  61
Interest credited to policyholder account
  balances................................           38                 126                 177
Other expenses............................           98                 184                 207
                                                   ----                ----                ----
  Total expenses..........................          180                 359                 445
                                                   ----                ----                ----
Income before provision for income
  taxes...................................           44                 111                 139
Provision for income taxes................           13                  35                  38
                                                   ----                ----                ----
Net income................................         $ 31                $ 76                $101
                                                   ====                ====                ====
</Table>

       SEE ACCOMPANYING NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS.
                                        6
<PAGE>

                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

              INTERIM CONDENSED STATEMENTS OF STOCKHOLDER'S EQUITY
                 FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005
               AND THE SIX MONTHS ENDED JUNE 30, 2005 (UNAUDITED)

                                 (IN MILLIONS)

<Table>
<Caption>
                                                                           ACCUMULATED OTHER
                                                                             COMPREHENSIVE
                                                                             INCOME (LOSS)
                                                                           -----------------
                                                   ADDITIONAL               NET UNREALIZED
                                          COMMON    PAID-IN     RETAINED   INVESTMENT GAINS
                                          STOCK     CAPITAL     EARNINGS       (LOSSES)        TOTAL
                                          ------   ----------   --------   -----------------   ------
<S>                                       <C>      <C>          <C>        <C>                 <C>
BALANCE AT JANUARY 1, 2005
  (PREDECESSOR).........................  $   3      $  817      $ 922           $ 219         $1,961
Comprehensive income (loss):
  Net income............................                            76                             76
  Other comprehensive income (loss):
     Unrealized gains (losses) on
       derivative instruments, net of
       income taxes.....................                                            (2)            (2)
     Unrealized investment gains
       (losses), net of related offsets
       and income taxes.................                                            (5)            (5)
                                                                                               ------
     Other comprehensive income
       (loss)...........................                                                           (7)
                                                                                               ------
  Comprehensive income (loss)...........                                                           69
                                                                                               ------
Assumption of liabilities by parent.....                  4                                         4
                                          ------     ------      -----           -----         ------
BALANCE AT JUNE 30, 2005
  (PREDECESSOR).........................      3         821        998             212          2,034
Effect of push down accounting of
  MetLife, Inc.'s purchase price on The
  Travelers Life and Annuity Company's
  net assets acquired (see Note 1)......              1,112       (998)           (212)           (98)
                                          ------     ------      -----           -----         ------
BALANCE AT JULY 1, 2005
  (SUCCESSOR)...........................      3       1,933         --              --          1,936
Comprehensive income (loss):
  Net income............................                            31                             31
  Other comprehensive income (loss):
     Unrealized investment gains
       (losses), net of related offsets
       and income taxes.................                                           (32)           (32)
                                                                                               ------
     Other comprehensive income
       (loss)...........................                                                          (32)
                                                                                               ------
  Comprehensive income (loss)...........                                                           (1)
                                          ------     ------      -----           -----         ------
BALANCE AT SEPTEMBER 30, 2005
  (SUCCESSOR)...........................  $   3      $1,933      $  31           $ (32)        $1,935
                                          ======     ======      =====           =====         ======
</Table>

       SEE ACCOMPANYING NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS.
                                        7
<PAGE>

                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

                   INTERIM CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2005 AND THE SIX MONTHS ENDED JUNE 30,
                                      2005
            AND THE NINE MONTHS ENDED SEPTEMBER 30, 2004 (UNAUDITED)

                                 (IN MILLIONS)

<Table>
<Caption>
                                                SUCCESSOR                     PREDECESSOR
                                            ------------------   -------------------------------------
                                            THREE MONTHS ENDED   SIX MONTHS ENDED   NINE MONTHS ENDED
                                            SEPTEMBER 30, 2005    JUNE 30, 2005     SEPTEMBER 30, 2004
                                            ------------------   ----------------   ------------------
<S>                                         <C>                  <C>                <C>
NET CASH PROVIDED BY (USED IN) OPERATING
  ACTIVITIES..............................       $  (227)             $(252)             $   103
                                                 -------              -----              -------
CASH FLOWS FROM INVESTING ACTIVITIES
  Sales, maturities and repayments of:
     Fixed maturities.....................         2,119                521                1,090
     Equity securities....................            13                  8                   21
     Mortgage loans on real estate........            28                 18                   53
     Real estate and real estate joint
       ventures...........................            --                 --                    2
     Other limited partnership
       interests..........................             5                 --                   --
  Purchases of:
     Fixed maturities.....................        (1,869)              (448)              (1,708)
     Equity securities....................            --                 (1)                 (19)
     Mortgage loans on real estate........           (19)               (75)                (110)
     Other limited partnership
       interests..........................            (1)                --                   --
  Policy loans............................            --                 (4)                  (4)
  Net change in short-term investments....          (142)               135                 (344)
  Net change in other invested assets.....           394                 10                   (3)
  Other, net..............................            (4)                 2                    9
                                                 -------              -----              -------
Net cash provided by (used in) investing
  activities..............................           524                166               (1,013)
                                                 -------              -----              -------
CASH FLOWS FROM FINANCING ACTIVITIES
  Policyholder account balances:
     Deposits.............................           137                476                  754
     Withdrawals..........................          (120)              (276)                (195)
  Net change in payable under securities
     loaned transactions..................            (1)              (113)                 (47)
  Capital contribution from parent........            --                 --                  400
                                                 -------              -----              -------
Net cash provided by financing
  activities..............................            16                 87                  912
                                                 -------              -----              -------
Change in cash and cash equivalents.......           313                  1                    2
Cash and cash equivalents, beginning of
  period..................................            85                  1                    1
                                                 -------              -----              -------
CASH AND CASH EQUIVALENTS, END OF
  PERIOD..................................       $   398              $   2              $     3
                                                 =======              =====              =======
Supplemental disclosures of cash flow
  information:
     Income taxes (paid) received.........       $    --              $(277)             $   177
                                                 =======              =====              =======
</Table>

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

See Note 1 for purchase accounting adjustments.

       SEE ACCOMPANYING NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS.
                                        8
<PAGE>

                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

          NOTES TO INTERIM CONDENSED FINANCIAL STATEMENTS (UNAUDITED)

1.  ACQUISITION OF THE TRAVELERS LIFE AND ANNUITY COMPANY BY METLIFE, INC.

     On July 1, 2005 (the "Acquisition Date"), The Travelers Life and Annuity
Company ("TLAC" or the "Company") and other affiliated entities, including the
Company's parent, The Travelers Insurance Company ("TIC"), and substantially all
of Citigroup Inc.'s ("Citigroup") international insurance businesses
(collectively, "Travelers"), were acquired by MetLife, Inc. ("MetLife") from
Citigroup Insurance Holding Corporation ("CIHC"), an indirect, wholly-owned
subsidiary of Citigroup (the "Acquisition") for $12.0 billion.

     Consideration paid by MetLife for the purchase consisted of approximately
$10.9 billion in cash and 22,436,617 shares of MetLife's common stock with a
market value of approximately $1.0 billion to Citigroup and approximately $100
million in other transaction costs. Consideration paid to Citigroup will be
finalized subject to review of the June 30, 2005 financial statements of
Travelers by both MetLife and Citigroup and interpretation of the provisions of
the acquisition agreement (the "Acquisition Agreement") by both parties.

     In accordance with Statement of Financial Accounting Standard ("SFAS") No.
141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible
Assets, the Acquisition is being accounted for by MetLife using the purchase
method of accounting, which requires that the assets and liabilities of the
Company be identified and measured at their fair value as of the Acquisition
Date. As required by the U.S. Securities and Exchange Commission Staff
Accounting Bulletin 54, Push Down Basis of Accounting in Financial Statements of
a Subsidiary, the purchase method of accounting applied by MetLife to the
acquired assets and liabilities associated with the Company has been "pushed
down" to the financial statements of the Company, thereby establishing a new
basis of accounting. This new basis of accounting is referred to as the
"successor basis" while the historical basis of accounting is referred to as the
"predecessor basis." Financial statements included herein for periods prior and
subsequent to the Acquisition Date are labeled "predecessor" and "successor,"
respectively.

     Purchase Price Allocation and Goodwill -- Preliminary

     The purchase price has been allocated to the assets acquired and
liabilities assumed using management's best estimate of their fair values as of
the Acquisition Date. The computation of the purchase price and the allocation
of the purchase price to the net assets acquired based upon their respective
fair values as of July 1, 2005, and the resulting goodwill, are presented below.
The fair value of certain assets acquired and liabilities assumed, including
goodwill, may be adjusted during the allocation period due to finalization of
the purchase price to be paid to Citigroup as noted previously, agreement
between Citigroup and MetLife as to the tax basis purchase price to be allocated
to the acquired subsidiaries, and receipt of information regarding the
estimation of certain fair values. In no case will the adjustments extend beyond
one year from the Acquisition Date.

                                        9
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

<Table>
<Caption>
                                                                   SUCCESSOR
                                                              -------------------
                                                              AS OF JULY 1, 2005
                                                              -------------------
                                                                 (IN MILLIONS)
<S>                                                           <C>        <C>
TOTAL PURCHASE PRICE........................................             $11,960
  Purchase price allocated to other affiliates..............              10,024
                                                                         -------
  Purchase price allocated to the Company...................               1,936
NET ASSETS ACQUIRED PRIOR TO PURCHASE ACCOUNTING
  ADJUSTMENTS...............................................  $ 2,034
ADJUSTMENTS TO REFLECT ASSETS ACQUIRED AT FAIR VALUE:
  Fixed maturities available-for-sale.......................       (4)
  Mortgage loans on real estate.............................       11
  Real estate and real estate joint ventures
     held-for-investment....................................       (1)
  Other limited partnership interests.......................        2
  Premiums and other receivables............................      (47)
  Elimination of historical deferred policy acquisition
     costs..................................................   (1,622)
  Value of business acquired................................    1,676
  Value of distribution agreements acquired.................        8
  Net deferred income tax asset.............................      168
ADJUSTMENTS TO REFLECT LIABILITIES ASSUMED AT FAIR VALUE:
  Future policy benefits....................................       20
  Policyholder account balances.............................     (464)
  Other liabilities.........................................      (69)
                                                              -------
NET FAIR VALUE OF ASSETS ACQUIRED AND LIABILITIES ASSUMED...               1,712
                                                                         -------
GOODWILL RESULTING FROM THE ACQUISITION.....................             $   224
                                                                         =======
</Table>

     The entire amount of goodwill is expected to be deductible for tax
purposes.

                                        10
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

     Condensed Statement of Net Assets Acquired

     The condensed statement of net assets acquired reflects the fair value of
the Company's net assets as of July 1, 2005 as follows:

<Table>
<Caption>
                                                                  SUCCESSOR
                                                              ------------------
                                                              AS OF JULY 1, 2005
                                                              ------------------
                                                                (IN MILLIONS)
<S>                                                           <C>
ASSETS:
  Fixed maturities available-for-sale.......................       $ 6,135
  Equity securities available-for-sale......................            35
  Mortgage loans on real estate.............................           281
  Policy loans..............................................            36
  Other limited partnership interests.......................            79
  Short-term investments....................................           188
  Other invested assets.....................................           342
                                                                   -------
     Total investments......................................         7,096
  Cash and cash equivalents.................................            85
  Accrued investment income.................................            80
  Premiums and other receivables............................           175
  Value of business acquired................................         1,676
  Goodwill..................................................           224
  Other intangible assets...................................             8
  Net deferred income tax asset.............................             7
  Other assets..............................................             1
  Separate account assets...................................        11,617
                                                                   -------
     Total assets acquired..................................        20,969
                                                                   -------
LIABILITIES:
  Future policy benefits....................................         1,416
  Policyholder account balances.............................         5,684
  Other policyholder funds..................................            15
  Current income taxes payable..............................            37
  Other liabilities.........................................           264
  Separate account liabilities..............................        11,617
                                                                   -------
     Total liabilities assumed..............................        19,033
                                                                   -------
     Net assets acquired....................................       $ 1,936
                                                                   =======
</Table>

     Other Intangible Assets

     Value of business acquired ("VOBA") reflects the estimated fair value of
in-force contracts acquired and represents the portion of the purchase price
that is allocated to the value of the right to receive future cash flows from
the life insurance and annuity contracts in-force at the Acquisition Date. VOBA
is based on actuarially determined projections, by each block of business, of
future policy and contract charges, premiums, mortality and morbidity, separate
account performance, surrenders, operating expenses, investment returns and
other factors. Actual experience on the purchased business may vary from these
projections. If estimated gross profits or premiums differ from expectations,
the amortization of VOBA is adjusted to reflect actual experience.

     The value of the other identifiable intangibles reflects the estimated fair
value of the Company's distribution agreements acquired at July 1, 2005 and will
be amortized in relation to the expected economic

                                        11
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

benefits of the agreements. If actual experience under the distribution
agreements differs from expectations, the amortization of these intangibles will
be adjusted to reflect actual experience.

     For purposes of calculating the VOBA and other intangible assets relating
to the Acquisition, management considered the Company's weighted average cost of
capital, as well as the weighted average cost of capital required by market
participants. A discount rate of 11.5% was used to value these intangible
assets.

     The fair value of business acquired and distribution agreements acquired
are as follows:

<Table>
<Caption>
                                                                SUCCESSOR
                                                              -------------
                                                              JULY 1, 2005
                                                              -------------
                                                              (IN MILLIONS)
<S>                                                           <C>
Value of business acquired..................................     $1,676
Value of distribution agreements acquired...................          8
                                                                 ------
  Total value of amortizable intangible assets acquired.....      1,684
Non-amortizable intangible assets acquired..................         --
                                                                 ------
  Total value of intangible assets acquired, excluding
     goodwill...............................................     $1,684
                                                                 ======
</Table>

     The estimated future amortization of the value of business acquired and the
value of distribution agreements acquired from 2005 to 2010 is as follows:

<Table>
<Caption>
                                                                SUCCESSOR
                                                              -------------
                                                                  AS OF
                                                              SEPTEMBER 30,
                                                                  2005
                                                              -------------
                                                              (IN MILLIONS)
<S>                                                           <C>
Three months ended December 31, 2005........................       $ 45
2006........................................................       $180
2007........................................................       $171
2008........................................................       $159
2009........................................................       $147
2010........................................................       $133
</Table>

2.  SUMMARY OF ACCOUNTING POLICIES

     BUSINESS

     The Company is a Connecticut corporation incorporated in 1973. As described
more fully in Note 1, TLAC is a wholly-owned subsidiary of TIC, which became a
wholly-owned subsidiary of MetLife, a leading provider of insurance and other
financial services to individual and institutional customers, on July 1, 2005.
The Company offers annuities and life insurance to individuals and small
businesses.

     The Company currently operates as a single segment and, as such, financial
results are prepared and reviewed by management as a single operating segment.
The Company continually evaluates its operating activities and the method
utilized by management to evaluate the performance of such activities and will
report on a segment basis when appropriate to do so.

     BASIS OF PRESENTATION

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America ("GAAP") requires
management to adopt accounting policies and make estimates and assumptions that
affect amounts reported in the unaudited interim condensed financial statements.
The most critical estimates include those used in determining: (i) investment
impairments; (ii) the fair value of investments in the absence of quoted market
values; (iii) application of the consolidation rules to certain

                                        12
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

investments; (iv) the fair value of and accounting for derivatives; (v) the
capitalization and amortization of deferred policy acquisition costs ("DAC"),
including VOBA; (vi) the measurement of goodwill and related impairment, if any;
(vii) the liability for future policyholder benefits; (viii) the liability for
litigation and regulatory matters; and (ix) accounting for reinsurance
transactions. The application of purchase accounting requires the use of
estimation techniques in determining the fair value of the assets acquired and
liabilities assumed - the most significant of which relate to the aforementioned
critical estimates. In applying these policies, management makes subjective and
complex judgments that frequently require estimates about matters that are
inherently uncertain. Many of these policies, estimates and related judgments
are common in the insurance and financial service industries; others are
specific to the Company's businesses and operations. Actual results could differ
from these estimates.

     Certain amounts in the prior periods' financial statements have been
reclassified to conform with the 2005 presentation.

     As described more fully in Note 1, the application of purchase accounting
resulted in the establishment of a new basis of accounting. Consequently, all
periods prior and subsequent to the Acquisition Date are labeled "predecessor"
and "successor," respectively. As such periods are not presented on a consistent
basis, the six month period prior to the Acquisition is presented separately
from the three month period subsequent to the Acquisition.

     The accompanying unaudited interim condensed financial statements reflect
all adjustments (including normal recurring adjustments) necessary to present
fairly the financial position of the Company at September 30, 2005, its results
of operations for the three months ended September 30, 2005 and 2004, the six
months ended June 30, 2005 and the nine months ended September 30, 2004, its
statements of stockholder's equity for the three months ended September 30, 2005
and the six months ended June 30, 2005 and its cash flows for the three months
ended September 30, 2005, the six months ended June 30, 2005 and the nine months
ended September 30, 2004 in accordance with GAAP. Interim results are not
necessarily indicative of full year performance. These unaudited interim
condensed financial statements should be read in conjunction with the financial
statements of the Company included in TLAC's Annual Report on Form 10-K for the
year ended December 31, 2004 filed with the U.S. Securities and Exchange
Commission ("SEC").

SIGNIFICANT ACCOUNTING POLICIES

     The following significant accounting policies included in TLAC's Annual
Report on Form 10-K for the year ended December 31, 2004 filed with the SEC have
been updated or amended in connection with the Acquisition as follows:

     Goodwill

     Goodwill is the excess of cost over the fair value of net assets acquired.
Changes in goodwill are as follows:

<Table>
<Caption>
                                                                 NINE MONTHS
                                                                    ENDED
                                                              SEPTEMBER 30, 2005
                                                              ------------------
                                                                (IN MILLIONS)
<S>                                                           <C>
Balance, beginning of year (Predecessor)....................        $  --
Effect of push down accounting of MetLife's purchase price
  on TLAC's net assets acquired (see Note 1)................          224
                                                                    -----
Balance, end of period (Successor)..........................        $ 224
                                                                    =====
</Table>

     Goodwill is not amortized but is tested for impairment at least annually,
or more frequently if events or circumstances, such as adverse changes in the
business climate, indicate that there may be justification for

                                        13
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

conducting an interim test. Impairment testing is performed using the fair value
approach, which requires the use of estimates and judgment, at the "reporting
unit" level. A reporting unit is the operating segment, or a business one level
below that operating segment if discrete financial information is prepared and
regularly reviewed by management at that level. If the carrying value of a
reporting unit's goodwill exceeds its fair value, the excess is recognized as an
impairment and recorded as a charge against net income. The fair values of the
reporting units are determined using discounted cash flow models. When available
and as appropriate, comparative market multiples are used to corroborate
discounted cash flow results.

     Liability for Future Policy Benefits and Policyholder Account Balances

     Future policy benefits represent liabilities for future insurance policy
benefits for payout annuities and traditional life products. The annuity payout
reserves were historically calculated using the mortality and interest
assumptions used in the actual pricing of the benefits. Mortality assumptions
are based on the Company's experience and are adjusted to reflect deviations
such as substandard mortality in structured settlement benefits. Traditional
life products include whole life and term insurance. Traditional life product
reserves are estimated on the basis of actuarial assumptions as to mortality,
persistency and interest rates, established at policy issue. Assumptions
established at policy issuance as to mortality and persistency are based on the
Company's experience which, together with interest assumptions, include a margin
for adverse deviation. For those contracts in-force at the time of the
Acquisition, the Company revalued the reserves using updated assumptions as to
interest rates, mortality, persistency and provisions for adverse deviation
which were current as of the time of the Acquisition.

     Policyholder account balances represent receipts from the issuance of
universal life, pension, investment and certain deferred annuity contracts. For
universal life contracts, policyholder account balances are increased by
receipts for mortality coverage, contract administration, surrender charges and
interest accrued where one or more of these elements are not fixed or
guaranteed. These balances are decreased by withdrawals, mortality charges and
administrative expenses charged to policyholders where these charges are not
fixed or guaranteed. Pension, investment and certain annuity contracts do not
contain significant insurance risks and are considered investment type
contracts. Policyholder account balances are increased by receipts and credited
interest and reduced by withdrawals and administrative expenses charged to the
policyholder. For those contracts in-force at the time of the Acquisition, the
Company revalued the policyholder account balances using current market credit
rates on similar newly issued policies.

     Single Premium Immediate Annuities and Structured Settlements

     Prior to the Acquisition, the Company determined the classification of its
single premium immediate annuities and structured settlements as investment or
insurance contracts at the contract level. As such, single premium immediate
annuities and structured settlements with life contingent payments were
classified and accounted for as "limited pay" long-duration insurance contracts
due to their significant mortality risk. The liability associated with these
contracts was reported in future policyholder benefits on the Company's balance
sheet. Contracts without life contingencies were classified as investment
contracts and were reported in policyholder account balances.

     Subsequent to the Acquisition, the Company classifies single premium
immediate annuities and structured settlements at the block of business level
which combines those contracts with life contingencies and those contracts
without life contingencies. In the aggregate, both the single premium immediate
annuities and structured settlements contain significant mortality risk.
Therefore, the Company accounts for all single premium immediate annuities and
structured settlements as long-duration insurance contracts and reports them as
future policyholder benefits.

                                        14
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

     Deferred Annuities with Guaranteed Minimum Death Benefit Features

     Prior to the Acquisition, the Company recorded its deferred annuity
contracts, including the guaranteed minimum death benefit ("GMDB") features, as
investment contracts. Subsequent to the Acquisition, the Company records such
contracts as insurance products. As a result, the Company has established a
future policyholder benefit liability for GMDBs in accordance with Statement of
Position ("SOP") 03-1, Accounting and Reporting by Insurance Enterprises for
Certain Nontraditional Long-Duration Contracts and for Separate Accounts ("SOP
03-1").

     Amortization of Deferred Acquisition Costs for Deferred and Payout
     Annuities

     Prior to the Acquisition, the Company amortized its deferred and payout
annuity contracts employing a level effective yield methodology, whereas
subsequent to the Acquisition, the Company amortizes DAC for deferred annuity
contracts in proportion to the anticipated gross profits and payout annuity
contracts in proportion to anticipated premiums.

     Equity Method of Accounting for Joint Ventures

     Prior to the Acquisition, the Company used the equity method of accounting
for all real estate joint ventures and other limited partnership interests in
which it had an ownership interest but did not control, including those in which
it had a minor equity investment or virtually no influence over operations.

     Subsequent to the Acquisition, the Company uses the equity method of
accounting for investments in real estate joint ventures and other limited
partnership interests in which it has more than a minor ownership interest or
more than minor influence over operations, but does not have a controlling
interest and is not the primary beneficiary. The Company uses the cost method of
accounting for real estate joint ventures and other limited partnership
interests in which it has a minor ownership investment and virtually no
influence over operations.

     Federal Income Taxes

     Federal income taxes for interim periods have been computed using an actual
effective tax rate. For federal income tax purposes, an election under Internal
Revenue Code Section 338 was made by the Company's ultimate parent, MetLife. As
a result of this election, the tax bases in the acquired assets and liabilities
were adjusted as of the Acquisition Date resulting in a change to the related
deferred income taxes. See Notes 1 and 5.

     APPLICATION OF RECENT ACCOUNTING PRONOUNCEMENTS

     In September 2005, the American Institute of Certified Public Accountants
("AICPA") issued SOP 05-1, Accounting by Insurance Enterprises for Deferred
Acquisition Costs in Connection with Modifications or Exchanges of Insurance
Contracts ("SOP 05-1"). SOP 05-1 provides guidance on accounting by insurance
enterprises for deferred acquisition costs on internal replacements of insurance
and investment contracts other than those specifically described in SFAS No. 97,
Accounting and Reporting by Insurance Enterprises for Certain Long-Duration
Contracts and For Realized Gains and Losses from the Sale of Investments. SOP
05-1 defines an internal replacement as a modification in product benefits,
features, rights, or coverage that occurs by the exchange of a contract for a
new contract, or by amendment, endorsement, or rider to a contract, or by the
election of a feature or coverage within a contract. Under SOP 05-1,
modifications that result in a substantially unchanged contract will be
accounted for as a continuation of the replaced contract. A replacement contract
that is substantially changed will be accounted for as an extinguishment of the
replaced contract resulting in a release of unamortized deferred acquisition
costs,

                                        15
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

unearned revenue and deferred sales inducements associated with the replaced
contract. The guidance in SOP 05-1 will be applied prospectively and is
effective for internal replacements occurring in fiscal years beginning after
December 15, 2006. The Company is currently evaluating the impact of SOP 05-1
and does not expect that the pronouncement will have a material impact on the
Company's unaudited interim condensed financial statements.

     Effective July 1, 2005, the Company adopted SFAS No. 153, Exchanges of
Nonmonetary Assets, an amendment of Accounting Principles Board ("APB") Opinion
No. 29 ("SFAS 153"). SFAS 153 amended prior guidance to eliminate the exception
for nonmonetary exchanges of similar productive assets and replaced it with a
general exception for exchanges of nonmonetary assets that do not have
commercial substance. A nonmonetary exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange. The provisions of SFAS 153 were required to be applied
prospectively. SFAS 153 did not have a material impact on the Company's
unaudited interim condensed financial statements.

     In June 2005, the Financial Accounting Standards Board ("FASB") completed
its review of Emerging Issue Task Force ("EITF") Issue No. 03-1, The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments
("EITF 03-1"). EITF 03-1 provides accounting guidance regarding the
determination of when an impairment of debt and marketable equity securities and
investments accounted for under the cost method should be considered
other-than-temporary and recognized in income. EITF 03-1 also requires certain
quantitative and qualitative disclosures for debt and marketable equity
securities classified as available-for-sale or held-to-maturity under SFAS No.
115, Accounting for Certain Investments in Debt and Equity Securities ("SFAS
115"), that are impaired at the balance sheet date but for which an other-than-
temporary impairment has not been recognized. The FASB decided not to provide
additional guidance on the meaning of other-than-temporary impairment but has
issued FASB Staff Position ("FSP") 115-1, The Meaning of Other-Than-Temporary
Impairment and its Application to Certain Investments ("FSP 115-1"), which
nullifies the accounting guidance on the determination of whether an investment
is other-than-temporarily impaired as set forth in EITF 03-1. FSP 115-1 is
effective on a prospective basis for other-than-temporary impairments on certain
investments in periods beginning after December 15, 2005. The Company has
complied with the disclosure requirements of EITF 03-1, which was effective
December 31, 2003 and will remain in effect until the adoption of FSP 115-1. The
Company does not anticipate that the adoption will have a material impact on its
unaudited interim condensed financial statements.

     In June 2005, the EITF reached consensus on Issue No. 04-5, Determining
Whether a General Partner, or the General Partners as a Group, Controls a
Limited Partnership or Similar Entity When the Limited Partners Have Certain
Rights ("EITF 04-5"). EITF 04-5 provides a framework for determining whether a
general partner controls and should consolidate a limited partnership or a
similar entity in light of certain rights held by the limited partners. The
consensus also provides additional guidance on substantive rights. EITF 04-5 was
effective after June 29, 2005 for all newly formed partnerships and for any
pre-existing limited partnerships that modified their partnership agreements
after that date. The adoption of this provision of EITF 04-5 did not have a
material impact on the Company's unaudited interim condensed financial
statements. EITF 04-5 must be adopted by January 1, 2006 for all other limited
partnerships through a cumulative effect of a change in accounting principle
recorded in opening equity or it may be applied retrospectively by adjusting
prior period financial statements. The adoption of this provision of EITF 04-5
is not expected to have a material impact on the Company's unaudited interim
condensed financial statements.

     In June 2005, the FASB cleared SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133"), Implementation Issue No. B38,
Embedded Derivatives: Evaluation of Net Settlement with Respect to the
Settlement of a Debt Instrument through Exercise of an Embedded Put Option or
Call Option ("Issue B38") and Implementation Issue No. B39, Embedded
Derivatives: Application of Paragraph 13(b) to Call Options That Are Exercisable
Only by the Debtor ("Issue B39"). Issue B38 clarifies

                                        16
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

that the potential settlement of a debtor's obligation to a creditor that would
occur upon exercise of a put or call option meets the net settlement criteria of
SFAS 133. Issue B39 clarifies that an embedded call option, in which the
underlying is an interest rate or interest rate index, that can accelerate the
settlement of a debt host financial instrument should not be bifurcated and fair
valued if the right to accelerate the settlement can be exercised only by the
debtor (issuer/borrower) and the investor will recover substantially all of its
initial net investment. Issue Nos. B38 and B39, which must be adopted as of the
first day of the first fiscal quarter beginning after December 15, 2005, are not
expected to have a material impact on the Company's unaudited interim condensed
financial statements.

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

     Effective July 1, 2004, the Company adopted EITF Issue No. 03-16,
Accounting for Investments in Limited Liability Companies ("EITF 03-16"). EITF
03-16 provides guidance regarding whether a limited liability company should be
viewed as similar to a corporation or similar to a partnership for purposes of
determining whether a noncontrolling investment should be accounted for using
the cost method or the equity method of accounting. EITF 03-16 did not have a
material impact on the Company's unaudited interim condensed financial
statements.

     Effective January 1, 2004, the Company adopted SOP 03-1, as interpreted by
a Technical Practice Aid issued by the AICPA. SOP 03-1 provides guidance on (i)
the classification and valuation of long-duration contract liabilities; (ii) the
accounting for sales inducements; and (iii) separate account presentation and
valuation.

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

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

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

          Liabilities for Universal Life and Variable Universal Life
     Contracts.  SOP 03-1 requires that a liability, in addition to the account
     balance, be established for certain insurance benefit features provided
     under universal life and variable universal life 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 universal life and variable universal life products were
     reviewed to determine whether an additional liability is required under SOP
     03-1. The Company determined that SOP 03-1

                                        17
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

     applied to some of its universal life and variable universal life contracts
     with these features and established an additional liability of less than $1
     million.

          Sales Inducements to Contract Holders. In accordance with SOP 03-1,
     the Company defers sales inducements and amortizes them over the life of
     the policy using the same methodology and assumptions used to amortize DAC.
     During the first nine months of 2005 and 2004, the Company capitalized
     sales inducements of approximately $17 million and $20 million,
     respectively, in accordance with SOP 03-1. These inducements relate to
     bonuses on certain products offered by the Company. For the three months
     ended September 30, 2005 and 2004, the six months ended June 30, 2005 and
     the nine months ended September 30, 2004, amortization of these capitalized
     amounts was insignificant.

3.  INVESTMENTS

     FIXED MATURITIES BY SECTOR AND EQUITY SECURITIES AVAILABLE-FOR-SALE

     The following tables set forth the cost or amortized cost, gross unrealized
gain and loss, and estimated fair value of the Company's fixed maturities by
sector and equity securities, the percentage of the total fixed maturities
holdings that each sector represents and the percentage of the total equity
securities at:

<Table>
<Caption>
                                                              SUCCESSOR
                                             --------------------------------------------
                                                          SEPTEMBER 30, 2005
                                             --------------------------------------------
                                                            GROSS
                                              COST OR    UNREALIZED
                                             AMORTIZED   -----------   ESTIMATED    % OF
                                               COST      GAIN   LOSS   FAIR VALUE   TOTAL
                                             ---------   ----   ----   ----------   -----
                                                            (IN MILLIONS)
<S>                                          <C>         <C>    <C>    <C>          <C>
U.S. corporate securities..................   $3,202     $  3   $ 60     $3,145      54.7%
Mortgage-backed securities.................    1,775        1     22      1,754      30.5
Foreign corporate securities...............      521        3     12        512       8.9
U.S. treasury/agency securities............      223       --      7        216       3.7
State and political subdivision
  securities...............................       77       --      3         74       1.3
Foreign government securities..............       47        2      1         48       0.8
                                              ------     ----   ----     ------     -----
  Total bonds..............................    5,845        9    105      5,749      99.9
Redeemable preferred stocks................        3       --     --          3       0.1
                                              ------     ----   ----     ------     -----
  Total fixed maturities...................   $5,848     $  9   $105     $5,752     100.0%
                                              ======     ====   ====     ======     =====
Common stocks..............................   $   19     $  1   $  1     $   19      86.4%
Nonredeemable preferred stocks.............        3       --     --          3      13.6
                                              ------     ----   ----     ------     -----
  Total equity securities..................   $   22     $  1   $  1     $   22     100.0%
                                              ======     ====   ====     ======     =====
</Table>

                                        18
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

<Table>
<Caption>
                                                               PREDECESSOR
                                              ---------------------------------------------
                                                            DECEMBER 31, 2004
                                              ---------------------------------------------
                                                             GROSS
                                               COST OR     UNREALIZED
                                              AMORTIZED   ------------   ESTIMATED    % OF
                                                COST      GAIN   LOSS    FAIR VALUE   TOTAL
                                              ---------   ----   -----   ----------   -----
                                                              (IN MILLIONS)
<S>                                           <C>         <C>    <C>     <C>          <C>
U.S. corporate securities...................   $3,565     $219   $  4      $3,780      60.4%
Mortgage-backed securities..................      906       24      1         929      14.8
Foreign corporate securities................    1,180       71      2       1,249      20.0
U.S. treasury/agency securities.............      154        9     --         163       2.6
State and political subdivision
  securities................................       57        8     --          65       1.0
Foreign government securities...............       63        6     --          69       1.1
                                               ------     ----   -----     ------     -----
  Total bonds...............................    5,925      337      7       6,255      99.9
Redeemable preferred stocks.................        4        2     --           6       0.1
                                               ------     ----   -----     ------     -----
  Total fixed maturities....................   $5,929     $339   $  7      $6,261     100.0%
                                               ======     ====   =====     ======     =====
Common stocks...............................   $   19     $  3   $ --      $   22      84.6%
Nonredeemable preferred stocks..............        4       --     --           4      15.4
                                               ------     ----   -----     ------     -----
  Total equity securities...................   $   23     $  3   $ --      $   26     100.0%
                                               ======     ====   =====     ======     =====
</Table>

     UNREALIZED LOSSES FOR FIXED MATURITIES AND EQUITY SECURITIES
     AVAILABLE-FOR-SALE

     The following tables show the estimated fair values and gross unrealized
losses of the Company's fixed maturities (aggregated by sector) and equity
securities in an unrealized loss position, aggregated by length of

                                        19
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

time that the securities have been in a continuous unrealized loss position at
September 30, 2005 and December 31, 2004:

<Table>
<Caption>
                                                               SUCCESSOR
                       ------------------------------------------------------------------------------------------
                                                           SEPTEMBER 30, 2005
                       ------------------------------------------------------------------------------------------
                                                              EQUAL TO OR
                           LESS THAN 12 MONTHS           GREATER THAN 12 MONTHS                 TOTAL
                       ----------------------------   ----------------------------   ----------------------------
                       ESTIMATED         GROSS        ESTIMATED         GROSS        ESTIMATED         GROSS
                       FAIR VALUE   UNREALIZED LOSS   FAIR VALUE   UNREALIZED LOSS   FAIR VALUE   UNREALIZED LOSS
                       ----------   ---------------   ----------   ---------------   ----------   ---------------
                                                         (DOLLARS IN MILLIONS)
<S>                    <C>          <C>               <C>          <C>               <C>          <C>
U.S. corporate
  securities.........    $2,847          $ 60           $  --           $  --          $2,847          $ 60
Mortgage-backed
  securities.........     1,507            22              --              --           1,507            22
Foreign corporate
  securities.........       460            12              --              --             460            12
U.S. treasury/agency
  securities.........       203             7              --              --             203             7
State and political
  subdivision
  securities.........        74             3              --              --              74             3
Foreign government
  securities.........        26             1              --              --              26             1
                         ------          ----           -----           -----          ------          ----
  Total bonds........     5,117           105              --              --           5,117           105
Redeemable preferred
  stocks.............         1            --              --              --               1            --
                         ------          ----           -----           -----          ------          ----
  Total fixed
     maturities......    $5,118          $105           $  --           $  --          $5,118          $105
                         ======          ====           =====           =====          ======          ====
  Equity
     securities......    $   12          $  1           $  --           $  --          $   12          $  1
                         ======          ====           =====           =====          ======          ====
  Total number of
     securities in an
     unrealized loss
     position........     1,647                            --                           1,647
                         ======                         =====                          ======
</Table>

                                        20
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

<Table>
<Caption>
                                                              PREDECESSOR
                       ------------------------------------------------------------------------------------------
                                                           DECEMBER 31, 2004
                       ------------------------------------------------------------------------------------------
                                                              EQUAL TO OR
                           LESS THAN 12 MONTHS           GREATER THAN 12 MONTHS                 TOTAL
                       ----------------------------   ----------------------------   ----------------------------
                       ESTIMATED         GROSS        ESTIMATED         GROSS        ESTIMATED         GROSS
                       FAIR VALUE   UNREALIZED LOSS   FAIR VALUE   UNREALIZED LOSS   FAIR VALUE   UNREALIZED LOSS
                       ----------   ---------------   ----------   ---------------   ----------   ---------------
                                                             (IN MILLIONS)
<S>                    <C>          <C>               <C>          <C>               <C>          <C>
U.S. corporate
  securities.........     $408           $  4            $15            $  --           $423           $  4
Mortgage-backed
  securities.........      103              1             --               --            103              1
Foreign corporate
  securities.........      141              1             24                1            165              2
U.S. treasury/agency
  securities.........        5             --             --               --              5             --
Foreign government
  securities.........        1             --             --               --              1             --
                          ----           ----            ---            -----           ----           ----
  Total bonds........      658              6             39                1            697              7
Redeemable preferred
  stocks.............        1             --             --               --              1             --
                          ----           ----            ---            -----           ----           ----
  Total fixed
     maturities......     $659           $  6            $39            $   1           $698           $  7
                          ====           ====            ===            =====           ====           ====
  Equity
     securities......     $  1           $ --            $ 3            $  --           $  4           $ --
                          ====           ====            ===            =====           ====           ====
</Table>

     The Company records impairments as investment losses and adjusts the cost
basis of the fixed maturities and equity securities accordingly. The Company
does not change the revised cost basis for subsequent recoveries in value.
Impairments of fixed maturities and equity securities were $0 million and $2
million for the three months ended September 30, 2005 and 2004, respectively, $0
million for the six months ended June 30, 2005, and $7 million for the nine
months ended September 30, 2004.

     AGING OF GROSS UNREALIZED LOSSES FOR FIXED MATURITIES AND EQUITY SECURITIES
     AVAILABLE-FOR-SALE

     The following table presents the cost or amortized cost, gross unrealized
losses and number of securities for fixed maturities and equity securities at
September 30, 2005 where the estimated fair value had declined and remained
below cost or amortized cost by less than 20%, or 20% or more for:

<Table>
<Caption>
                                                                   SUCCESSOR
                                          ------------------------------------------------------------
                                                               SEPTEMBER 30, 2005
                                          ------------------------------------------------------------
                                               COST OR               GROSS              NUMBER OF
                                            AMORTIZED COST     UNREALIZED LOSSES        SECURITIES
                                          ------------------   ------------------   ------------------
                                          LESS THAN   20% OR   LESS THAN   20% OR   LESS THAN   20% OR
                                             20%       MORE       20%       MORE       20%       MORE
                                          ---------   ------   ---------   ------   ---------   ------
                                                             (DOLLARS IN MILLIONS)
<S>                                       <C>         <C>      <C>         <C>      <C>         <C>
Less than six months....................   $5,221      $15       $102        $4       1,633       14
                                           ------      ---       ----        --       -----       --
  Total.................................   $5,221      $15       $102        $4       1,633       14
                                           ======      ===       ====        ==       =====       ==
</Table>

     The cost of fixed maturity and equity securities is adjusted for
impairments in value deemed to be other-than-temporary in the period that such
determination is made. These adjustments are recorded as investment losses. The
assessment of whether such impairment has occurred is based on management's
case-by-case

                                        21
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

evaluation of the underlying reasons for the decline in fair value. Management
considers a wide range of factors about the security issuer and uses its best
judgment in evaluating the cause of the decline in the estimated fair value of
the security and in assessing the prospects for near-term recovery. Such
considerations used by the Company in the impairment evaluation process include,
but are not limited to: (i) the length of time and the extent to which the
market value has been below cost or amortized cost; (ii) the potential for
impairments of securities when the issuer is experiencing significant financial
difficulties; (iii) the potential for impairments in an entire industry sector
or sub-sector; (iv) the potential for impairments in certain economically
depressed geographic locations; (v) the potential for impairments of securities
where the issuer, series of issuers or industry has suffered a catastrophic type
of loss or has exhausted natural resources; (vi) the Company's ability and
intent to hold the security for a period of time sufficient to allow for the
recovery of its value to an amount equal to or greater than cost or amortized
cost; (vii) unfavorable changes in forecasted cash flows on asset-backed
securities; and (viii) other subjective factors, including concentrations and
information obtained from regulators and rating agencies. In addition, the
earnings on certain investments are dependent upon market conditions, which
could result in prepayments and changes in amounts to be earned due to changing
interest rates or equity markets. Inherent in management's evaluation of the
security are assumptions and estimates about the operations of the issuer and
its future earnings potential.

     The Company's review of its fixed maturities and equity securities for
impairments also includes an analysis of the total gross unrealized losses by
three categories of securities: (i) securities where the estimated fair value
had declined and remained below cost or amortized cost by less than 20%; (ii)
securities where the estimated fair value had declined and remained below cost
or amortized cost by 20% or more for less than six months; and (iii) securities
where the estimated fair value had declined and remained below cost or amortized
cost by 20% or more for six months or greater.

     NET INVESTMENT GAINS (LOSSES)

     Net investment gains (losses) are as follows:

<Table>
<Caption>
                                                               SUCCESSOR           PREDECESSOR
                                                           ------------------   ------------------
                                                           THREE MONTHS ENDED   THREE MONTHS ENDED
                                                           SEPTEMBER 30, 2005   SEPTEMBER 30, 2004
                                                           ------------------   ------------------
                                                                        (IN MILLIONS)
<S>                                                        <C>                  <C>
Fixed maturities.........................................         $(16)                $ 1
Equity securities........................................           --                  --
Mortgage loans on real estate............................           (1)                 --
Derivatives..............................................           25                   8
Other....................................................           --                   1
                                                                  ----                 ---
  Net investment gains (losses)..........................         $  8                 $10
                                                                  ====                 ===
</Table>

                                        22
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

<Table>
<Caption>
                                                SUCCESSOR                     PREDECESSOR
                                            ------------------   -------------------------------------
                                            THREE MONTHS ENDED   SIX MONTHS ENDED   NINE MONTHS ENDED
                                            SEPTEMBER 30, 2005    JUNE 30, 2005     SEPTEMBER 30, 2004
                                            ------------------   ----------------   ------------------
                                                                  (IN MILLIONS)
<S>                                         <C>                  <C>                <C>
Fixed maturities..........................         $(16)              $  (5)               $(9)
Equity securities.........................           --                   2                 --
Mortgage loans on real estate.............           (1)                 --                 --
Derivatives...............................           25                  (3)                11
Other.....................................           --                  --                  4
                                                   ----               -----                ---
  Net investment gains (losses)...........         $  8               $  (6)               $ 6
                                                   ====               =====                ===
</Table>

     The Company periodically disposes of fixed maturity and equity securities
at a loss. Generally, such losses are insignificant in amount or in relation to
the cost basis of the investment or are attributable to declines in fair value
occurring in the period of disposition.

4. DERIVATIVE FINANCIAL INSTRUMENTS

TYPES OF DERIVATIVE INSTRUMENTS

     The Company previously disclosed in its financial statements for the year
ended December 31, 2004, its types and uses of derivative instruments, and
financial statement classifications. This information should be read in
conjunction with Notes 1 and 9 of Notes to Financial Statements included in
TLAC's Annual Report on Form 10-K for the year ended December 31, 2004 filed
with the SEC. As a part of the Acquisition, positive derivative revaluation
gains were reclasified from other assets to other invested assets to conform
with MetLife's presentation.

     Effective at the Acquisition Date, the Company's derivative positions which
previously qualified for hedge accounting were dedesignated in accordance with
SFAS 133. Such derivative positions were not redesignated in hedging
relationships. Accordingly, changes in derivative fair values for the three
months ended September 30, 2005 are recorded in net investment gains (losses).

     The following table provides a summary of the notional amounts and current
market or fair value of derivative financial instruments held at:

<Table>
<Caption>
                                                     SUCCESSOR                        PREDECESSOR
                                          -------------------------------   -------------------------------
                                                SEPTEMBER 30, 2005                 DECEMBER 31, 2004
                                          -------------------------------   -------------------------------
                                                        CURRENT MARKET                    CURRENT MARKET
                                                        OR FAIR VALUE                     OR FAIR VALUE
                                          NOTIONAL   --------------------   NOTIONAL   --------------------
                                           AMOUNT    ASSETS   LIABILITIES    AMOUNT    ASSETS   LIABILITIES
                                          --------   ------   -----------   --------   ------   -----------
                                                                    (IN MILLIONS)
<S>                                       <C>        <C>      <C>           <C>        <C>      <C>
Interest rate swaps.....................   $  948     $204       $  --        $200      $  4        $ 1
Financial futures.......................       64       --           2         168        --         --
Foreign currency swaps..................       32       --           3          29        --         10
Foreign currency forwards...............        7       --          --           3        --         --
Options.................................       --      111           3          --       135         --
Financial forwards......................       --       --           2          --        --          2
Credit default swaps....................        4       --          --           9        --         --
                                           ------     ----       -----        ----      ----        ---
  Total.................................   $1,055     $315       $  10        $409      $139        $13
                                           ======     ====       =====        ====      ====        ===
</Table>

     The Company enters into various collateral arrangements, which require both
the pledging and accepting of collateral in connection with its derivative
instruments. As of September 30, 2005 and December 31, 2004, the Company was
obligated to return cash collateral under its control of $105 million and $94
million,

                                        23
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

respectively. This unrestricted cash collateral is included in cash and cash
equivalents and the obligation to return it is included in other liabilities in
the interim condensed balance sheet. As of September 30, 2005, and December 31,
2004, the Company had also accepted collateral consisting of various securities
with a fair market value of $13 million and $8 million, respectively, which is
held in separate custodial accounts and is not reflected in the interim
condensed financial statements. The Company is permitted by contract to sell or
repledge this collateral, but as of September 30, 2005 and December 31, 2004,
none of the collateral had been sold or repledged.

  HEDGING

     The table below provides a summary of the notional amount and fair value of
derivatives by type of hedge designation at:

<Table>
<Caption>
                                                 SUCCESSOR                        PREDECESSOR
                                      -------------------------------   -------------------------------
                                            SEPTEMBER 30, 2005                 DECEMBER 31, 2004
                                      -------------------------------   -------------------------------
                                                      FAIR VALUE                        FAIR VALUE
                                      NOTIONAL   --------------------   NOTIONAL   --------------------
                                       AMOUNT    ASSETS   LIABILITIES    AMOUNT    ASSETS   LIABILITIES
                                      --------   ------   -----------   --------   ------   -----------
                                                                (IN MILLIONS)
<S>                                   <C>        <C>      <C>           <C>        <C>      <C>
Fair value..........................   $   --     $ --       $  --        $129      $ --        $--
Cash flow...........................       --       --          --         126         3         10
Non-qualifying......................    1,055      315          10         154       136          3
                                       ------     ----       -----        ----      ----        ---
  Total.............................   $1,055     $315       $  10        $409      $139        $13
                                       ======     ====       =====        ====      ====        ===
</Table>

  EMBEDDED DERIVATIVES

     The Company has certain embedded derivatives which are required to be
separated from their host contracts and accounted for as derivatives. These host
contracts include guaranteed minimum accumulation and withdrawal benefits. The
fair value of the Company's embedded derivative liabilities was $23 million and
$72 million at September 30, 2005 and December 31, 2004, respectively. The
amounts included in net investment gains (losses) during the three months ended
September 30, 2005 and 2004, were $14 million and $13 million, respectively. The
amounts included in net investment gains (losses) during the six months ended
June 30, 2005 and the nine months ended September 30, 2004, were ($10) million
and $20 million, respectively.

                                        24
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

5.  INCOME TAXES

     The net deferred income tax asset (liability) was comprised of the tax
effects of temporary differences related to the following assets and
liabilities:

<Table>
<Caption>
                                                          SUCCESSOR           PREDECESSOR
                                                      ------------------   -----------------
                                                      SEPTEMBER 30, 2005   DECEMBER 31, 2004
                                                      ------------------   -----------------
                                                                  (IN MILLIONS)
<S>                                                   <C>                  <C>
Deferred income tax assets:
Benefit, reinsurance and other reserves.............        $ 498                $ 372
Employee benefits...................................            7                   --
Net unrealized investment losses....................           17                   --
Other...............................................           19                    7
                                                            -----                -----
Total...............................................          541                  379
                                                            -----                -----
Deferred income tax liabilities:
Deferred policy acquisition costs and value of
  business acquired.................................         (507)                (426)
Net unrealized investment gains.....................           --                 (118)
Investments, net....................................           --                  (13)
Other...............................................           --                   (2)
                                                            -----                -----
Total...............................................         (507)                (559)
                                                            -----                -----
Net deferred income tax asset (liability)...........        $  34                $(180)
                                                            =====                =====
</Table>

     If the Company determines that any of its deferred income tax assets will
not result in future tax benefits, a valuation allowance must be established for
the portion of these assets that are not expected to be realized. Based
predominantly upon a review of the Company's anticipated future taxable income,
but also including all other available evidence, both positive and negative, the
Company's management concluded that it is "more likely than not" that the net
deferred income tax asset will be realized.

6.  COMMITMENTS, CONTINGENCIES AND GUARANTEES

     LITIGATION AND REGULATORY PROCEEDINGS

     The Company is a defendant in a number of litigation matters. In some of
the matters, indeterminate amounts, including punitive and treble damages, are
sought. Modern pleading practice in the United States permits considerable
variation in the assertion of monetary damages or other relief. Jurisdictions
may permit claimants not to specify the monetary damages sought or may permit
claimants to state only that the amount sought is sufficient to invoke the
jurisdiction of the trial court. In addition, jurisdictions may permit
plaintiffs to allege monetary damages in amounts well exceeding reasonably
possible verdicts in the jurisdiction for similar matters. This variability in
pleadings, together with the actual experience of the Company in litigating or
resolving through settlement numerous claims over an extended period of time,
demonstrate to management that the monetary relief which may be specified in a
lawsuit or claim bears little relevance to its merits or disposition value.
Thus, unless stated below, the specific monetary relief sought is not noted.

     Due to the vagaries of litigation, the outcome of a litigation matter and
the amount or range of potential loss at particular points in time may normally
be inherently impossible to ascertain with any degree of certainty. Inherent
uncertainties can include how fact finders will view individually and in their
totality

                                        25
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

documentary evidence, the credibility and effectiveness of witnesses' testimony,
and how trial and appellate courts will apply the law in the context of the
pleadings or evidence presented, whether by motion practice, or at trial or on
appeal. Disposition valuations are also subject to the uncertainty of how
opposing parties and their counsel will themselves view the relevant evidence
and applicable law.

     On a quarterly basis, the Company reviews relevant information with respect
to liabilities for litigation and contingencies to be reflected in the Company's
financial statements. The review includes senior legal and financial personnel.
Unless stated below, estimates of possible additional losses or ranges of loss
for particular matters cannot in the ordinary course be made with a reasonable
degree of certainty. Liabilities are established when it is probable that a loss
has been incurred and the amount of the loss can be reasonably estimated. It is
possible that some of the matters could require the Company to pay damages or
make other expenditures or establish accruals in amounts that could not be
estimated as of September 30, 2005.

     In August 1999, an amended putative class action complaint was filed in
Connecticut state court against TLAC, Travelers Equity Sales, Inc. and certain
former affiliates. The amended complaint alleges Travelers Property Casualty
Corporation, a former TLAC affiliate, purchased structured settlement annuities
from TLAC and spent less on the purchase of those structured settlement
annuities than agreed with claimants, and that commissions paid to brokers for
the structured settlement annuities, including an affiliate of TLAC, were paid
in part to Travelers Property Casualty Corporation. On May 26, 2004, the
Connecticut Superior Court certified a nationwide class action involving the
following claims against TLAC: violation of the Connecticut Unfair Trade
Practice Statute, unjust enrichment, and civil conspiracy. On June 15, 2004, the
defendants appealed the class certification order and the appeal is now pending
before the Connecticut Supreme Court.

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

     In addition, the Company is a defendant or co-defendant in various other
litigation matters in the normal course of business. These include civil
actions, arbitration proceedings and other matters arising in the normal course
of business out of activities as an insurance company, a broker and dealer in
securities or otherwise. Further, state insurance regulatory authorities and
other federal and state authorities may make inquiries and conduct
investigations concerning the Company's compliance with applicable insurance and
other laws and regulations.

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

  COMMITMENTS TO FUND PARTNERSHIP INVESTMENTS

     The Company makes commitments to fund partnership investments in the normal
course of business. The amounts of these unfunded commitments were $7 million
and $20 million at September 30, 2005 and

                                        26
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

December 31, 2004, respectively. The Company anticipates that these amounts will
be invested in partnerships over the next five years.

  GUARANTEES

     In the course of its business, the Company has provided certain
indemnities, guarantees and commitments to third parties pursuant to which it
may be required to make payments now or in the future.

     In the context of acquisition, disposition, investment and other
transactions, the Company has provided indemnities and guarantees, including
those related to tax, environmental, other specific liabilities, and other
indemnities and guarantees that are triggered by, among other things, breaches
of representations, warranties or covenants provided by the Company. In
addition, in the normal course of business, the Company provides
indemnifications to counterparties in contracts with triggers similar to the
foregoing, as well as for certain other liabilities, such as third party
lawsuits.

     In addition, the Company indemnifies its directors and officers as provided
in its charter and by-laws. Also, the Company indemnifies other of its agents
for liabilities incurred as a result of their representation of the Company's
interests. Since these indemnities are generally not subject to limitation with
respect to duration or amount, the Company does not believe that it is possible
to determine the maximum potential amount due under these indemnities in the
future.

7.  EQUITY

     Under Connecticut State Insurance Law, the Company is permitted, without
prior insurance regulatory clearance, to pay shareholder dividends to its
parent, as long as the amount of such dividends, when aggregated with all other
dividends in the preceding twelve months, does not exceed the greater of (i) 10%
of its surplus to policyholders as of the immediately preceding calendar year,
or (ii) its statutory net gain from operations for the immediately preceding
calendar year. TLAC will be permitted to pay a cash dividend in excess of the
greater of such two amounts only if it files notice of its declaration of such a
dividend and the amount thereof with the Connecticut Commissioner of Insurance
("Commissioner") and the Commissioner does not disapprove the payment within 30
days after notice or until the Commissioner has approved the dividend, whichever
is sooner. In addition, any dividend that exceeds earned surplus (unassigned
funds, reduced by 25% of unrealized appreciation in value or revaluation of
assets or unrealized profits on investments) as of the last filed annual
statutory statement requires insurance regulatory approval. Under Connecticut
State Insurance Law, the Commissioner has broad discretion in determining
whether the financial condition of a stock life insurance company would support
the payment of such dividends to its shareholders. The Connecticut State
Insurance Law requires prior approval for any dividends for a period of two
years following a change in control. As a result of the acquisition of TLAC by
MetLife, under Connecticut State Insurance Law all dividend payments by TLAC
through June 30, 2007 require prior approval of the Commissioner.

                                        27
<PAGE>
                     THE TRAVELERS LIFE AND ANNUITY COMPANY
         (A Wholly-Owned Subsidiary of The Travelers Insurance Company)

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

8.  COMPREHENSIVE INCOME (LOSS)

     The components of comprehensive income (loss) are as follows:

<Table>
<Caption>
                                                                SUCCESSOR            PREDECESSOR
                                                           -------------------   -------------------
                                                              THREE MONTHS          THREE MONTHS
                                                           ENDED SEPTEMBER 30,   ENDED SEPTEMBER 30,
                                                                  2005                  2004
                                                           -------------------   -------------------
                                                                         (IN MILLIONS)
<S>                                                        <C>                   <C>
Net income...............................................         $ 31                  $ 24
Other comprehensive income (loss):
  Unrealized gains (losses) on derivative instruments,
     net of income taxes.................................           --                    (1)
  Unrealized investment-related gains (losses), net of
     related offsets and income taxes....................          (32)                  104
                                                                  ----                  ----
Other comprehensive income (loss):.......................          (32)                  103
                                                                  ----                  ----
     Comprehensive income (loss).........................         $ (1)                 $127
                                                                  ====                  ====
</Table>

<Table>
<Caption>
                                               SUCCESSOR                       PREDECESSOR
                                          -------------------   -----------------------------------------
                                             THREE MONTHS           SIX MONTHS            NINE MONTHS
                                          ENDED SEPTEMBER 30,     ENDED JUNE 30,      ENDED SEPTEMBER 30,
                                                 2005                  2005                  2004
                                          -------------------   -------------------   -------------------
                                                                   (IN MILLIONS)
<S>                                       <C>                   <C>                   <C>
Net income..............................         $ 31                   $76                  $101
Other comprehensive income (loss):
  Unrealized gains (losses) on
     derivative instruments, net of
     income taxes.......................           --                    (2)                   (3)
  Unrealized investment-related gains
     (losses), net of related offsets
     and income taxes...................          (32)                   (5)                   10
                                                 ----                   ---                  ----
Other comprehensive income (loss):......          (32)                   (7)                    7
                                                 ----                   ---                  ----
     Comprehensive income (loss)........         $ (1)                  $69                  $108
                                                 ====                   ===                  ====
</Table>

9.  RELATED PARTY TRANSACTIONS

     TLAC is a beneficiary under a reinsurance transaction entered into in
December 2004 between TLAC and an affiliate, The Travelers Life and Annuity
Reinsurance Company ("TLARC"), with respect to TLAC's reserves related to
guarantee features included in certain of their universal life and variable
universal life products. This transaction is treated as a deposit-type contract
and at September 30, 2005, TLAC had a recoverable from TLARC of $35 million.
Fees associated with this contract, included within other expenses, were $4
million for the three months ended September 30, 2005 and $22 million for the
six months ended June 30, 2005.

     In addition, TLAC's individual insurance mortality risk is reinsured, in
part, to Reinsurance Group of America, Incorporated ("RGA"), an affiliate. Under
these agreements with RGA, reinsurance receivables include $30 million at
September 30, 2005 and $17 million at December 31, 2004. Ceded premiums paid and
benefits received were $9 million and $18 million, respectively, for the three
months ended September 30, 2005 and $14 million and $7 million, respectively,
for the six months ended June 30, 2005.

                                        28
<PAGE>

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

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

     This narrative analysis contains statements which constitute
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995, including statements relating to trends in the
operations and financial results and the business and the products of the
Company, as well as other statements including words such as "anticipate,"
"believe," "plan," "estimate," "expect," "intend" and other similar expressions.
Forward-looking statements are made based upon management's current expectations
and beliefs concerning future developments and their potential effects on the
Company. Such forward-looking statements are not guarantees of future
performance.

     Actual results may differ materially from those included in the
forward-looking statements as a result of risks and uncertainties including, but
not limited to, the following: (i) changes in general economic conditions,
including the performance of financial markets and interest rates; (ii)
heightened competition, including with respect to pricing, entry of new
competitors and the development of new products by new and existing competitors;
(iii) unanticipated changes in industry trends; (iv) adverse results or other
consequences from litigation, arbitration or regulatory investigations; (v)
regulatory, accounting or tax changes that may affect the cost of, or demand
for, the Company's products or services; (vi) downgrades in the Company's and
its affiliates' claims paying ability, financial strength or credit ratings;
(vii) changes in rating agency policies or practices; (viii) discrepancies
between actual claims experience and assumptions used in setting prices for the
Company's products and establishing the liabilities for the Company's
obligations for future policy benefits and claims; (ix) discrepancies between
actual experience and assumptions used in establishing liabilities related to
other contingencies or obligations; (x) the effects of business disruption or
economic contraction due to terrorism or other hostilities; (xi) changes in
results of the Company arising from the acquisition by MetLife, Inc. ("MetLife")
and integration of its business into MetLife's operations; and (xii) other risks
and uncertainties described from time to time in TLAC's filings with the U.S.
Securities and Exchange Commission ("SEC"). The Company specifically disclaims
any obligation to update or revise any forward-looking statement, whether as a
result of new information, future developments or otherwise.

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

THE ACQUISITION

     On July 1, 2005 (the "Acquisition Date"), TLAC and other affiliated
entities, including the Company's parent, The Travelers Insurance Company
("TIC"), and substantially all of Citigroup Inc.'s ("Citigroup") international
insurance businesses (collectively, "Travelers"), were acquired by MetLife from
Citigroup Insurance Holding Corporation ("CIHC"), an indirect, wholly-owned
subsidiary of Citigroup (the "Acquisition") for $12.0 billion.

     Consideration paid by MetLife for the purchase consisted of approximately
$10.9 billion in cash and 22,436,617 shares of MetLife's common stock with a
market value of approximately $1.0 billion to Citigroup and approximately $100
million in other transaction costs. Consideration paid to Citigroup will be
finalized subject to review of the June 30, 2005 financial statements of
Travelers by both MetLife and Citigroup and the interpretation of the provisions
of the acquisition agreement (the "Acquisition Agreement") by both parties.

                                        29
<PAGE>

BUSINESS

     The Company's core offerings include universal and variable life insurance,
fixed and variable deferred annuities, structured settlements and payout
annuities.

     The Company has a license from The St. Paul Travelers Companies, Inc. to
permit it 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.

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

     A significant portion of life insurance mortality risk is reinsured.
Increasing prices and reduced capacity may adversely impact assets, liabilities
and earnings of the Company.

FINANCIAL CONDITION

     In accordance with Statement of Financial Accounting Standards ("SFAS") No.
141, Business Combinations, and SFAS No. 142, Goodwill and Other Intangible
Assets, the Acquisition is being accounted for by MetLife using the purchase
method of accounting, which requires that the assets and liabilities of the
Company be identified and measured at their fair value as of the Acquisition
Date. As required by SEC Staff Accounting Bulletin 54, Push Down Basis of
Accounting in Financial Statements of a Subsidiary, the purchase method of
accounting applied by MetLife to the acquired assets and liabilities associated
with the Company has been "pushed down" to the financial statements of the
Company, thereby establishing a new basis of accounting. This new basis of
accounting is referred to as the "successor basis" while the historical basis of
accounting is referred to as the "predecessor basis."

     The establishment of a new basis of accounting resulted in significant fair
value adjustments related to certain invested assets not already carried at
their fair value, deferred policy acquisition costs, value of business acquired,
future policy benefits and policyholder account balances and the establishment
of goodwill. Additionally, the Company's ultimate parent, MetLife, made an
election under Internal Revenue Code Section 338 to adjust the tax bases of the
assets acquired and liabilities assumed which resulted in the establishment of a
deferred income tax asset. Period over period comparisons will be impacted by
such adjustments.

     In connection with the Acquisition, MetLife filed with the State of
Connecticut Insurance Department (the "Department") an Amended and Restated Form
A Statement Regarding the Acquisition of Control of or Merger with a Domestic
Insurer, dated April 19, 2005 (the "Form A"), seeking the approval of the
Department to acquire control of the Company. The Form A was approved by the
Department on June 30, 2005. The Form A includes MetLife's post-Acquisition
business plan and financial projections for the Company after the closing date.
The Company will generally phase out the products that it currently issues by
the end of 2006 which may, over time, result in fewer assets and liabilities.
The Company may, however, determine to introduce new products in the future.

                                        30
<PAGE>

RESULTS OF OPERATIONS

     For purposes of management's discussion and analysis only, the pro forma
combined results of operations for the nine month period ended September 30,
2005 discussed below represents the mathematical addition of the historical
results for the predecessor period from January 1, 2005 through June 30, 2005
and the successor period from July 1, 2005 through September 30, 2005. This
approach is not consistent with accounting principles generally accepted in the
United States of America and yields results that are not comparable on a
period-over-period basis due to the new basis of accounting established at the
Acquisition Date. However, management believes it is the most meaningful way to
comment on the results of operations for the nine month period ended September
30, 2005 compared to the nine month period ended September 30, 2004.

     The results of operations are as follows:

<Table>
<Caption>
                                                                       PRO FORMA
                                                                       COMBINED
                                         SUCCESSOR     PREDECESSOR      RESULTS       PREDECESSOR
                                       -------------   -----------   -------------   -------------
                                       THREE MONTHS    SIX MONTHS     NINE MONTHS     NINE MONTHS
                                           ENDED          ENDED          ENDED           ENDED
                                       SEPTEMBER 30,    JUNE 30,     SEPTEMBER 30,   SEPTEMBER 30,
                                           2005           2005           2005            2004
                                       -------------   -----------   -------------   -------------
                                                              (IN MILLIONS)
<S>                                    <C>             <C>           <C>             <C>
REVENUES
Premiums.............................      $  7           $ 20             $ 27           $ 28
Universal life and investment-type
  product policy fees................       117            221              338            247
Net investment income................        87            223              310            288
Other revenues.......................         5             12               17             15
Net investment gains (losses)........         8             (6)               2              6
                                           ----           ----             ----           ----
  Total revenues.....................       224            470              694            584
                                           ----           ----             ----           ----
EXPENSES
Policyholder benefits and claims.....        44             49               93             61
Interest credited to policyholder
  account balances...................        38            126              164            177
Other expenses.......................        98            184              282            207
                                           ----           ----             ----           ----
  Total expenses.....................       180            359              539            445
                                           ----           ----             ----           ----
Income before provision for income
  taxes..............................        44            111              155            139
Provision for income taxes...........        13             35               48             38
                                           ----           ----             ----           ----
Net income...........................      $ 31           $ 76             $107           $101
                                           ====           ====             ====           ====
</Table>

     Net income increased by $6 million, or 6%, to $107 million in the nine
months ended September 30, 2005 from $101 million in the comparable 2004 period.
This increase is the result of an increase in total revenues of $110 million due
to an increase in universal life and variable annuity product policy fees
related to growth in the business and favorable market performance, an increase
in net investment income resulting principally from a real estate joint venture
transaction and a reduction of net investment gains (losses). Total expenses
increased by $94 million due to higher policyholder benefits and claims
resulting principally from unfavorable mortality experience in universal life
products and an increase in other expenses resulting from an increase in costs
associated with a reinsurance contract with an affiliate entered into in
December 2004, increased amortization of deferred policy acquisition costs and
lower capitalization of policy acquisition costs. The increase in income taxes
of $10 million is the result of an increase in income before provision for
income taxes and an increase in the effective tax rate arising from a reduction
in the dividend received deduction.

     Total revenues, excluding net investment gains (losses), increased by $114
million, or 20%, to $692 million for the nine months ended September 30, 2005
from $578 million for the comparable 2004 period. This increase is driven by a
$91 million, or 37%, increase in fees related to increased universal life and

                                        31
<PAGE>

investment-type product policy fees for universal life and variable annuity
products from the growth in the business and favorable market performance. Net
investment income also increased by $22 million, or 8%, over the prior year
period due to an increased asset base resulting from growth in the business and
a real estate joint venture transaction of $15 million, offset by lower yields
from the revaluation of the investment portfolio through the application of the
purchase method of accounting.

     Total expenses increased by $94 million, or 21%, to $539 million for the
nine months ended September 30, 2005 from $445 million for the comparable 2004
period. Policyholder benefits and claims increased by $32 million, or 52%, as a
result of unfavorable mortality in universal life products, as well as a
structured settlement liability release of $9 million in 2004. Interest credited
to policyholder account balances decreased by $13 million, or 7%, due to lower
crediting rates on annuity products resulting from the revaluation of the
policyholder account balance through the application of the purchase method of
accounting. Other expenses increased by $75 million, or 36%, primarily due to
costs associated with a reinsurance contract with an affiliate entered into in
December 2004. Additionally, other expenses increased due to higher amortization
of deferred policy acquisition costs during the first six months of 2005 as a
result of growth in the business and higher account balances related to
universal life products and lower capitalization of deferred policy acquisition
costs during the three months ended September 30, 2005, due to a change in
policy subsequent to the Acquisition.

INSURANCE REGULATIONS

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

     Under Connecticut State Insurance Law, the Company is permitted, without
prior insurance regulatory clearance, to pay shareholder dividends to its
parent, as long as the amount of such dividends, when aggregated with all other
dividends in the preceding twelve months, does not exceed the greater of (i) 10%
of its surplus to policyholders as of the immediately preceding calendar year,
or (ii) its statutory net gain from operations for the immediately preceding
calendar year. TLAC will be permitted to pay a cash dividend in excess of the
greater of such two amounts only if it files notice of its declaration of such a
dividend and the amount thereof with the Connecticut Commissioner of Insurance
("Commissioner") and the Commissioner does not disapprove the payment within 30
days after notice or until the Commissioner has approved the dividend, whichever
is sooner. In addition, any dividend that exceeds earned surplus (unassigned
funds, reduced by 25% of unrealized appreciation in value or revaluation of
assets or unrealized profits on investments) as of the last filed annual
statutory statement requires insurance regulatory approval. Under Connecticut
State Insurance Law, the Commissioner has broad discretion in determining
whether the financial condition of a stock life insurance company would support
the payment of such dividends to its shareholders. The Connecticut State
Insurance Law requires prior approval for any dividends for a period of two
years following a change in control. As a result of the acquisition of TLAC by
MetLife, under Connecticut State Insurance Law all dividend payments by TLAC
through June 30, 2007 require prior approval of the Commissioner.

APPLICATION OF RECENT ACCOUNTING PRONOUNCEMENTS

     In September 2005, the American Institute of Certified Public Accountants
("AICPA") issued Statement of Position ("SOP") 05-1, Accounting by Insurance
Enterprises for Deferred Acquisition Costs in Connection with Modifications or
Exchanges of Insurance Contracts ("SOP 05-1"). SOP 05-1 provides guidance on
accounting by insurance enterprises for deferred acquisition costs on internal
replacements of insurance and investment contracts other than those specifically
described in SFAS No. 97, Accounting and Reporting by Insurance Enterprises for
Certain Long-Duration Contracts and For Realized Gains and Losses from the Sale
of Investments. SOP 05-1 defines an internal replacement as a modification in
product benefits, features, rights, or coverage that occurs by the exchange of a
contract for a new contract, or by amendment, endorsement, or rider to a
contract, or by the election of a feature or coverage within a contract. Under
SOP 05-1, modifications that result in a substantially unchanged contract will
be accounted for as a
                                        32
<PAGE>

continuation of the replaced contract. A replacement contract that is
substantially changed will be accounted for as an extinguishment of the replaced
contract resulting in a release of unamortized deferred acquisition costs,
unearned revenue and deferred sales inducements associated with the replaced
contract. The guidance in SOP 05-1 will be applied prospectively and is
effective for internal replacements occurring in fiscal years beginning after
December 15, 2006. The Company is currently evaluating the impact of SOP 05-1
and does not expect that the pronouncement will have a material impact on the
Company's unaudited interim condensed financial statements.

     Effective July 1, 2005, the Company adopted SFAS No. 153, Exchanges of
Nonmonetary Assets, an amendment of Accounting Principles Board ("APB") Opinion
No. 29 ("SFAS 153"). SFAS 153 amended prior guidance to eliminate the exception
for nonmonetary exchanges of similar productive assets and replaced it with a
general exception for exchanges of nonmonetary assets that do not have
commercial substance. A nonmonetary exchange has commercial substance if the
future cash flows of the entity are expected to change significantly as a result
of the exchange. The provisions of SFAS 153 were required to be applied
prospectively. SFAS 153 did not have a material impact on the Company's
unaudited interim condensed financial statements.

     In June 2005, the Financial Accounting Standards Board ("FASB") completed
its review of Emerging Issues Task Force ("EITF") Issue No. 03-1, The Meaning of
Other-Than-Temporary Impairment and Its Application to Certain Investments
("EITF 03-1"). EITF 03-1 provides accounting guidance regarding the
determination of when an impairment of debt and marketable equity securities and
investments accounted for under the cost method should be considered
other-than-temporary and recognized in income. EITF 03-1 also requires certain
quantitative and qualitative disclosures for debt and marketable equity
securities classified as available-for-sale or held-to-maturity under SFAS No.
115, Accounting for Certain Investments in Debt and Equity Securities ("SFAS
115"), that are impaired at the balance sheet date but for which an other-than-
temporary impairment has not been recognized. The FASB decided not to provide
additional guidance on the meaning of other-than-temporary impairment but has
issued FASB Staff Position ("FSP") 115-1, The Meaning of Other-Than-Temporary
Impairment and its Application to Certain Investments ("FSP 115-1"), which
nullifies the accounting guidance on the determination of whether an investment
is other-than-temporarily impaired as set forth in EITF 03-1. FSP 115-1 is
effective on a prospective basis for other-than-temporary impairments on certain
investments in periods beginning after December 15, 2005. The Company has
complied with the disclosure requirements of EITF 03-1, which was effective
December 31, 2003 and will remain in effect until the adoption of FSP 115-1. The
Company does not anticipate that the adoption will have a material impact on its
unaudited interim condensed financial statements.

     In June 2005, the EITF reached consensus on Issue No. 04-5, Determining
Whether a General Partner, or the General Partners as a Group, Controls a
Limited Partnership or Similar Entity When the Limited Partners Have Certain
Rights ("EITF 04-5"). EITF 04-5 provides a framework for determining whether a
general partner controls and should consolidate a limited partnership or a
similar entity in light of certain rights held by the limited partners. The
consensus also provides additional guidance on substantive rights. EITF 04-5 was
effective after June 29, 2005 for all newly formed partnerships and for any
pre-existing limited partnerships that modified their partnership agreements
after that date. The adoption of this provision of EITF 04-5 did not have a
material impact on the Company's unaudited interim condensed financial
statements. EITF 04-5 must be adopted by January 1, 2006 for all other limited
partnerships through a cumulative effect of a change in accounting principle
recorded in opening equity or it may be applied retrospectively by adjusting
prior period financial statements. The adoption of this provision of EITF 04-5
is not expected to have a material impact on the Company's unaudited interim
condensed financial statements.

     In June 2005, the FASB cleared SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities ("SFAS 133"), Implementation Issue No. B38,
Embedded Derivatives: Evaluation of Net Settlement with Respect to the
Settlement of a Debt Instrument through Exercise of an Embedded Put Option or
Call Option ("Issue B38") and Implementation Issue No. B39, Embedded
Derivatives: Application of Paragraph 13(b) to Call Options That Are Exercisable
Only by the Debtor ("Issue B39"). Issue B38 clarifies that the potential
settlement of a debtor's obligation to a creditor that would occur upon exercise
of a put or call option meets the net settlement criteria of SFAS 133. Issue B39
clarifies that an embedded call option, in
                                        33
<PAGE>

which the underlying is an interest rate or interest rate index, that can
accelerate the settlement of a debt host financial instrument should not be
bifurcated and fair valued if the right to accelerate the settlement can be
exercised only by the debtor (issuer/borrower) and the investor will recover
substantially all of its initial net investment. Issue Nos. B38 and B39, which
must be adopted as of the first day of the first fiscal quarter beginning after
December 15, 2005, are not expected to have a material impact on the Company's
unaudited interim condensed financial statements.

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

     Effective July 1, 2004, the Company adopted EITF Issue No. 03-16,
Accounting for Investments in Limited Liability Companies ("EITF 03-16"). EITF
03-16 provides guidance regarding whether a limited liability company should be
viewed as similar to a corporation or similar to a partnership for purposes of
determining whether a noncontrolling investment should be accounted for using
the cost method or the equity method of accounting. EITF 03-16 did not have a
material impact on the Company's unaudited interim condensed financial
statements.

     Effective January 1, 2004, the Company adopted SOP 03-1, as interpreted by
a Technical Practice Aid issued by the AICPA. SOP 03-1 provides guidance on (i)
the classification and valuation of long-duration contract liabilities; (ii) the
accounting for sales inducements; and (iii) separate account presentation and
valuation.

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

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

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

          Liabilities for Universal Life and Variable Universal Life
     Contracts.  SOP 03-1 requires that a liability, in addition to the account
     balance, be established for certain insurance benefit features provided
     under universal life and variable universal life 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 universal life and variable universal life products were
     reviewed to determine whether an additional liability is required under SOP
     03-1. The Company determined that SOP 03-1 applied to some of its universal
     life and variable universal life contracts with these features and
     established an additional liability of less than $1 million.

          Sales Inducements to Contract Holders. In accordance with SOP 03-1,
     the Company defers sales inducements and amortizes them over the life of
     the policy using the same methodology and assumptions used to amortize DAC.
     During the first nine months of 2005 and 2004, the Company capitalized
     sales inducements of approximately $17 million and $20 million,
     respectively, in accordance with SOP 03-1. These inducements relate to
     bonuses on certain products offered by the Company. For the three months

                                        34
<PAGE>

     ended September 30, 2005 and 2004, the six months ended June 30, 2005 and
     the nine months ended September 30, 2004, amortization of these capitalized
     amounts was insignificant.

ITEM 4.  CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

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

INTERNAL CONTROL OVER FINANCIAL REPORTING

     On July 1, 2005, MetLife completed the Acquisition of TLAC. MetLife is in
the process of completing its post-merger integration plan which includes
integrating TLAC's internal control over financial reporting with that of
MetLife. Such integration plan has resulted in changes that materially affected
or are reasonably likely to materially affect TLAC's internal control over
financial reporting during the three months ended September 30, 2005.

                                        35
<PAGE>

PART II -- OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

     Subsequent to the Company's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2005, there have been no material developments in the Company's
material legal proceedings.

ITEM 6.  EXHIBITS

<Table>
<Caption>

<S>            <C>
    3.1        Charter of The Travelers Life and Annuity Company ("TLAC"),
               as amended on April 10, 1990, incorporated by reference to
               Exhibit 6(a) to TLAC's Registration Statement on Form N-4,
               File No. 33-58131, filed on March 17, 1995 (the
               "Registration Statement").
    3.2        By-laws of TLAC, as amended on October 20, 1994,
               incorporated by reference to Exhibit 6(b) to the
               Registration Statement.
   31.1        Certification of Chief Executive Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002.
   31.2        Certification of Chief Financial Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002.
   32.1        Certification of Chief Executive Officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002.
   32.2        Certification of Chief Financial Officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002.
</Table>

                                        36
<PAGE>

                                   SIGNATURES

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

                                    THE TRAVELERS LIFE AND ANNUITY COMPANY

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

Date: November 18, 2005

                                        37
<PAGE>

                                 EXHIBIT INDEX

<Table>
<Caption>
  EXHIBIT
   NUMBER                              EXHIBIT NAME
  -------                              ------------
<S>            <C>
    3.1        Charter of The Travelers Life and Annuity Company ("TLAC"),
               as amended on April 10, 1990, incorporated by reference to
               Exhibit 6(a) to TLAC's Registration Statement on Form N-4,
               File No. 33-58131, filed on March 17, 1995 (the
               "Registration Statement").
    3.2        By-laws of TLAC, as amended on October 20, 1994,
               incorporated by reference to Exhibit 6(b) to the
               Registration Statement.
   31.1        Certification of Chief Executive Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002.
   31.2        Certification of Chief Financial Officer pursuant to Section
               302 of the Sarbanes-Oxley Act of 2002.
   32.1        Certification of Chief Executive Officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002.
   32.2        Certification of Chief Financial Officer pursuant to Section
               906 of the Sarbanes-Oxley Act of 2002.
</Table>

                                        38