0000950109-95-003711.txt : 19950914 0000950109-95-003711.hdr.sgml : 19950914 ACCESSION NUMBER: 0000950109-95-003711 CONFORMED SUBMISSION TYPE: N-4 EL/A PUBLIC DOCUMENT COUNT: 6 FILED AS OF DATE: 19950912 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRAVELERS FUND BD II FOR VARIABLE ANNUITIES CENTRAL INDEX KEY: 0000941729 STANDARD INDUSTRIAL CLASSIFICATION: [] IRS NUMBER: 060904249 STATE OF INCORPORATION: CT FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-4 EL/A SEC ACT: 1933 Act SEC FILE NUMBER: 033-58131 FILM NUMBER: 95573304 FILING VALUES: FORM TYPE: N-4 EL/A SEC ACT: 1940 Act SEC FILE NUMBER: 811-07259 FILM NUMBER: 95573305 BUSINESS ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 BUSINESS PHONE: 2032777379 MAIL ADDRESS: STREET 1: FINANCIAL SERVICES LEGAL DIVISION STREET 2: ONE TOWER SQUARE CITY: HARTFORD STATE: CT ZIP: 06183 N-4 EL/A 1 PRE-EFFECTIVE AMENDMENT #1 Registration No. 33-58131 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM N-4 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 Pre-Effective Amendment No. 1 and/or REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 Amendment No. 1 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES ----------------------------------------------- (Exact Name of Registrant) THE TRAVELERS LIFE AND ANNUITY COMPANY -------------------------------------- (Name of Depositor) ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183 ---------------------------------------------- (Address of Depositor's Principal Executive Offices) Depositor's Telephone Number, including area code: (203) 277-0111 -------------- ERNEST J. WRIGHT Assistant Secretary The Travelers Life and Annuity Company One Tower Square Hartford, Connecticut 06183 ---------------------------- (Name and Address of Agent for Service) Approximate Date of Proposed Public Offering: As soon as possible after effective date of Registration Statement. It is proposed that this filing become effective (check appropriate box) ___ immediately upon filing pursuant to paragraph (b) of Rule 485 X on September 22, 1995 pursuant to paragraph (b) of Rule 485 --- ___ 60 days after filing pursuant to paragraph (a)(1) of Rule 485 ___ on __________ pursuant to paragraph (a)(1) of Rule 485 If appropriate, check the following box: ___ this post-effective amendment designates a new effective date for a previously filed post-effective amendment. Pursuant to Rule 24f-2 of the Investment Company Act of 1940, the Registrant hereby declares that an indefinite amount of Variable Annuity Contracts is being registered under the Securities Act of 1933. Amount of registration fee: $500. The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Commission, acting pursuant to Section 8(a), may determine. THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES Cross-Reference Sheet Form N-4 Item No. Caption in Prospectus --- ---------------------- 1. Cover Page Prospectus 2. Definitions Glossary of Special Terms 3. Synopsis Prospectus Summary 4. Condensed Financial Not Applicable Information 5. General Description of Registrant, The Insurance Company; The Depositor, and Portfolio Companies Separate Account and the Underlying Funds; Voting Rights 6. Deductions Charges and Deductions; Distribution of Variable Annuity Contracts 7. General Description of Variable The Contract; Ownership Annuity Contracts Provisions; Transfer 8. Annuity Period The Annuity Period 9. Death Benefit Death Benefit 10. Purchases and Contract Value The Contract; Distribution of Variable Annuity Contracts 11. Redemptions Surrenders and Redemptions; Miscellaneous Contract Provisions 12. Taxes Federal Tax Considerations 13. Legal Proceedings Legal Proceedings and Opinions 14. Table of Contents of the Statement Appendix B - Contents of the of Additional Information Statement of Additional Information Caption in Statement of Additional Information ---------------------- 15. Cover Page Cover Page 16. Table of Contents Table of Contents 17. General Information and History The Insurance Company 18. Services Principal Underwriter; Distribution and Management Agreement 19. Purchase of Securities Being Offered Valuation of Assets 20. Underwriters Principal Underwriter 21. Calculation of Performance Data Performance Information 22. Annuity Payments Not Applicable 23. Financial Statements Financial Statements PART A Information Required in a Prospectus ------------------------------------ ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- PROSPECTUS ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- This Prospectus describes an individual flexible premium variable annuity contract (the "Contract") offered by The Travelers Life and Annuity Company (the "Company"). The Contract is currently available for use in connection with (1) individual nonqualified purchases; (2) Individual Retirement Annuities (IRAs) pursuant to Section 408 of the Internal Revenue Code of 1986, as amended (the "Code"); and (3) qualified retirement plans. Qualified contracts include contracts qualifying under Section 401(a), 403(b), or 408(b) of the Code. Purchase Payments made under the Contract will accumulate on a fixed and/or a variable basis, as selected by the Contract Owner. If on a variable basis, the value of the Contract prior to the Maturity Date will vary continuously to reflect the investment experience of The Travelers Fund BD II for Variable Annuities ("Fund BD II"). Purchase Payments may currently be allocated to any one or more of the sub-accounts (the "Sub-Accounts") available under Fund BD II. The assets in each Sub-Account are invested in a separate series of shares of a mutual fund. Each series of shares is a separate investment portfolio. The investment portfolios currently available are: Smith Barney Income and Growth Portfolio, Alliance Growth Portfolio, American Capital Enterprise Portfolio, Smith Barney International Equity Portfolio, Smith Barney Pacific Basin Portfolio, TBC Managed Income Portfolio, Putnam Diversified Income Portfolio, G.T. Global Strategic Income Portfolio, Smith Barney High Income Portfolio, MFS Total Return Portfolio, Smith Barney Money Market Portfolio and AIM Capital Appreciation Portfolio of the Smith Barney/Travelers Series Fund Inc.; and Smith Barney Total Return Portfolio of the Smith Barney Series Fund (collectively, the "Underlying Funds"). This Prospectus provides the information about Fund BD II that you should know before investing. Please read it and retain it for future reference. Additional information about Fund BD II is contained in a Statement of Additional Information dated September 22, 1995 which has been filed with the Securities and Exchange Commission and is incorporated by reference into this Prospectus. A copy may be obtained, without charge, by writing to The Travelers Life and Annuity Company, Annuity Investor Services--5SHS, One Tower Square, Hartford, Connecticut 06183-9061, or by calling 1-800-842-8573. The Table of Contents of the Statement of Additional Information appears in Appendix B of this Prospectus. THIS PROSPECTUS IS VALID ONLY WHEN ACCOMPANIED BY THE CURRENT PROSPECTUSES FOR THE UNDERLYING FUNDS. BOTH THIS CONTRACT PROSPECTUS AND THE UNDERLYING FUND PROSPECTUSES SHOULD BE READ AND RETAINED FOR FUTURE REFERENCE. THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THIS PROSPECTUS IS DATED SEPTEMBER 22, 1995 ------------------------------------------------------------------------------- -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- TABLE OF CONTENTS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- GLOSSARY OF SPECIAL TERMS................................................... v PROSPECTUS SUMMARY.......................................................... vi FEE TABLE................................................................... ix THE INSURANCE COMPANY....................................................... 1 THE SEPARATE ACCOUNT AND THE UNDERLYING FUNDS............................... 1 The Travelers Fund BD II For Variable Annuities (Fund BD II).............. 1 The Underlying Funds...................................................... 1 Underlying Fund Investment Managers....................................... 3 Substitution.............................................................. 3 General................................................................... 3 PERFORMANCE INFORMATION..................................................... 4 THE CONTRACT................................................................ 4 Purchase Payments......................................................... 5 Right to Return........................................................... 5 Accumulation Units........................................................ 5 Net Investment Factor..................................................... 5 CHARGES AND DEDUCTIONS...................................................... 6 Contingent Deferred Sales Charge.......................................... 6 Administrative Charges.................................................... 7 Insurance Charge.......................................................... 7 Reduction or Elimination of Contract Charges.............................. 8 Underlying Fund Charges................................................... 8 Premium Tax............................................................... 8 Changes in Taxes Based Upon Premium or Value.............................. 8 OWNERSHIP PROVISIONS........................................................ 9 Types of Ownership........................................................ 9 Beneficiary............................................................... 9 Annuitant................................................................. 9 TRANSFERS................................................................... 10 Dollar-Cost Averaging (Automated Transfers)............................... 10 Telephone Transfers....................................................... 11 SURRENDERS AND REDEMPTIONS.................................................. 11 Systematic Withdrawals.................................................... 11
-------------------------------------------------------------------------------- III DEATH BENEFIT............................................................... 12 Death Proceeds Prior to the Maturity Date................................. 12 Death Proceeds After the Maturity Date.................................... 13 THE ANNUITY PERIOD.......................................................... 13 Maturity Date............................................................. 13 Allocation of Annuity..................................................... 14 Variable Annuity.......................................................... 14 Fixed Annuity............................................................. 15 PAYMENT OPTIONS............................................................. 15 Election of Options....................................................... 15 Annuity Options........................................................... 16 Income Options............................................................ 16 MISCELLANEOUS CONTRACT PROVISIONS........................................... 17 Termination............................................................... 17 Misstatement.............................................................. 17 Required Reports.......................................................... 17 Suspension of Payments.................................................... 17 FEDERAL TAX CONSIDERATIONS.................................................. 18 General Taxation of Annuities............................................. 18 Tax Law Diversification Requirements for Variable Annuities............... 18 Ownership of the Investments.............................................. 18 Penalty Tax for Premature Distributions................................... 19 Mandatory Distributions for Qualified Plans............................... 19 Nonqualified Annuity Contracts............................................ 19 Individual Retirement Annuities........................................... 20 Qualified Pension and Profit-Sharing Plans................................ 20 Federal Income Tax Withholding............................................ 20 VOTING RIGHTS............................................................... 21 DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS.................................. 22 STATE REGULATION............................................................ 22 Conformity with State and Federal Laws.................................... 23 LEGAL PROCEEDINGS AND OPINIONS.............................................. 23 THE FIXED ACCOUNT........................................................... 23 Transfers................................................................. 24 APPENDIX A.................................................................. 25 APPENDIX B.................................................................. 27
-------------------------------------------------------------------------------- IV ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- GLOSSARY OF SPECIAL TERMS ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- The following terms are used throughout the Prospectus and have the indicated meanings: ACCUMULATION UNIT -- an accounting unit of measure used to calculate the value of a Contract before Annuity Payments begin. ANNUITANT -- the person on whose life the Maturity Date and the amount of the monthly Annuity Payments depend. ANNUITY PAYMENTS -- a series of periodic payments (a) for life; (b) for life with either a minimum number of payments or a determinable sum assured; or (c) for the joint lifetime of the Annuitant and another person ("Contingent Annuitant") and thereafter during the lifetime of the survivor. ANNUITY UNIT -- an accounting unit of measure used to calculate the amount of Annuity Payments. CASH SURRENDER VALUE -- the amount payable to the Contract Owner or other payee upon full or partial surrender of the Contract during the lifetime of the Annuitant. COMPANY'S HOME OFFICE -- the principal offices of The Travelers Life and Annuity Company located at One Tower Square, Hartford, Connecticut 06183- 9061. CONTRACT DATE -- the date on which the Contract, benefits and the contract provisions become effective. CONTRACT OWNER (YOU, YOUR) -- the person or entity to whom the Contract is issued. CONTRACT VALUE -- the current value of Accumulation Units credited to the Contract less any administrative charges. CONTRACT YEARS -- twelve-month periods beginning on the Contract Date. FIXED ACCOUNT -- an additional account into which Purchase Payments may be allocated and which is included in the Contract Value. Purchase Payments allocated to the Fixed Account will earn interest at a rate guaranteed by the Company; this rate will change from time to time. INCOME PAYMENTS -- optional forms of payments made by the Company which are based on an agreed-upon number of payments or payment amount. MATURITY DATE -- the date on which the first Annuity or Income Payment is to begin. PURCHASE PAYMENT -- a gross amount paid to the Company during the accumulation period. SEPARATE ACCOUNT -- assets set aside by the Company, the investment experience of which is kept separate from that of other assets of the Company; for example, Fund BD II. SUB-ACCOUNT -- the portion of the assets of the Separate Account which is allocated to a particular Underlying Fund. UNDERLYING FUND(S) -- an open-end diversified management investment company which serves as an investment option under the Separate Account. VALUATION DATE -- generally, a day on which the Sub-Account is valued. A Valuation Date is any day on which the New York Stock Exchange is open for trading and the Company is open for business. The value of Accumulation Units and Annuity Units will be determined as of the close of trading on the New York Stock Exchange. VALUATION PERIOD -- the period between the close of business on successive Valuation Dates. VARIABLE ANNUITY -- an annuity contract which provides for accumulation and for Annuity Payments which vary in amount in accordance with the investment experience of a Separate Account. ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- V ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- PROSPECTUS SUMMARY ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- INTRODUCTION The Contract described in this Prospectus is issued by The Travelers Life and Annuity Company (the "Company"), an indirect wholly owned subsidiary of Travelers Group Inc. The Company has established The Travelers Fund BD II for Variable Annuities ("Fund BD II"), a registered unit investment trust separate account, for the purpose of investing exclusively in shares of the Underlying Funds described herein. The purpose of the Contract is to provide for an individual flexible premium variable annuity which allows you to invest in any or all of the Sub-Accounts currently available under Fund BD II, as well as in the Fixed Account. Certain changes and elections must be made in writing to the Company. Where the term "written request" is used, it means that written information must be sent to the Company's Home Office in a form and content satisfactory to the Company. RIGHT TO RETURN You may return the Contract and receive a full refund of the Contract Value (including charges) within twenty days after the Contract is delivered to you, unless state law requires a longer period. The Contract Value returned may be greater or less than your Purchase Payment; however, if applicable state law so requires, your Purchase Payment will be refunded in full for some or all of the free-look period. If you purchased the Contract as an Individual Retirement Annuity (IRA), your Purchase Payment will be refunded in full for the first seven days of the free-look period. (See "Right to Return," page 5.) THE SEPARATE ACCOUNT AND THE UNDERLYING FUNDS Fund BD II is registered with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940. Purchase Payments allocated to the Sub-Accounts of Fund BD II will be invested at net asset value in shares of the following Underlying Funds in accordance with the selection made by the Contract Owner: Smith Barney Income and Growth Portfolio G.T. Global Strategic Income Portfolio Alliance Growth Portfolio Smith Barney High Income Portfolio American Capital Enterprise Portfolio MFS Total Return Portfolio Smith Barney International Equity Portfolio Smith Barney Money Market Portfolio Smith Barney Pacific Basin Portfolio AIM Capital Appreciation Portfolio TBC Managed Income Portfolio Smith Barney Total Return Portfolio Putnam Diversified Income Portfolio
Each Underlying Fund is a separate series of shares of the Smith Barney/Travelers Series Fund Inc., except for Smith Barney Total Return Portfolio, which is a separate series of the Smith Barney Series Fund Inc. For a description of each Fund's investment objectives, as well as the investment advisers that provide investment management and advisory services for the Funds, please refer to "The Underlying Funds" on page 1, and the prospectuses for the Underlying Funds. PURCHASE PAYMENTS An initial lump-sum Purchase Payment of at least $5,000 must be made to the Contract, and additional Purchase Payments of at least $500 may be made at any time following the initial payment. In some states ------------------------------------------------------------------------------- VI subsequent Purchase Payments are not allowed. All Purchase Payments will be allocated to the Sub-Account(s) or the Fixed Account, as chosen by the Contract Owner. (See "Purchase Payments," page 5.) CHARGES AND EXPENSES There is no sales charge deducted from Purchase Payments when they are received. However, a Contingent Deferred Sales Charge ("surrender charge") applies if you make a full or partial surrender of the Contract Value during the first six years following each Purchase Payment. The maximum surrender charge that could be assessed is 6% of the amount withdrawn. (See "Contingent Deferred Sales Charge," page 6.) The Company will deduct $30 annually from the Contract to cover administrative expenses associated with the Contract. This charge will not apply (1) at the time of a distribution resulting from the death of the Contract Owner, or the death of the Annuitant with no Contingent Annuitant surviving; (2) after an annuity payout has begun; or (3) if the Contract Value is equal to or greater than $40,000 on the date of the assessment of the charge. The Company will also deduct from each Sub-Account an amount equal to 0.15% on an annual basis of the average daily net asset value of the Sub- Account for administrative and operating expenses related to the Sub-Accounts. (See "Administrative Charges," page 7.) An insurance charge is deducted daily from the Sub-Accounts of Fund BD II to compensate for mortality and expense risks assumed by the Company. For those Contract Owners who elect a standard death benefit, the insurance charge will be equivalent on an annual basis to 1.02% of the daily net assets of the Sub- Account. For those Contract Owners who elect an enhanced death benefit, the insurance charge will be equivalent on an annual basis to 1.30% of the daily net assets of the Sub-Account. (See "Insurance Charge," page 7.) Premium taxes may apply to annuities in a few states. These taxes currently range from 0.5% to 5.0%, depending upon jurisdiction. Where required, the Company will deduct any applicable premium tax from the Contract Value either upon death, surrender or annuitization, or at the time Purchase Payments are made to the Contract, but no earlier than when the Company has a tax liability under state law. (See "Premium Tax," page 8.) TRANSFERS Prior to the Maturity Date, your investments may be reallocated among the Fixed Account and any of the Sub-Accounts available under Fund BD II. You may request a reallocation of your investment either in writing, sent to the Company's Home Office, or by telephone in accordance with the Company's telephone transfer procedures. Transfers between the Fixed Account and any of the variable Sub-Accounts are subject to certain restrictions. (See "Transfers," page 10, and "The Fixed Account," page 23.) You may also request that the Company establish automated transfers of Contract Values from the Fixed Account or any of the Sub-Accounts to other Sub-Accounts through written request or other method acceptable to the Company. The minimum automated transfer amount is $400. (See "Dollar-Cost Averaging (Automated Transfers)," on page 10.) SURRENDERS You may also elect to surrender all or part of the Contract Value prior to the Maturity Date, subject to certain charges and limitations. You will be liable for income tax on the taxable portion of any full or ------------------------------------------------------------------------------- VII partial surrender, and you will incur a 10% tax penalty if such surrender is made prior to the age of 59 1/2, unless you qualify for a statutory exemption. (See "Surrenders and Redemptions," page 11 and "Penalty Tax for Premature Distributions" page 19.) You may elect to take systematic withdrawals from the Contract by surrendering a specified dollar amount of at least $100 on a monthly, quarterly, semiannual or annual basis. All applicable surrender charges and premium taxes will be deducted. The minimum Contract Value required to begin systematic withdrawals is $15,000. (See "Systematic Withdrawals," on page 11.) DEATH BENEFIT A death benefit is payable to the Beneficiary upon the death of the Annuitant prior to the Maturity Date with no Contingent Annuitant surviving. Two different types of death benefits are available under the Contract: a Standard Death Benefit and an Enhanced Death Benefit. The insurance charges under the Contract will be higher for Contract Owners who elect the Enhanced Death Benefit. The death benefits will vary based on the Annuitant's age at the time of death. In addition, for nonqualified Contracts, upon distributions resulting from the death of the Contract Owner prior to the Maturity Date and with the Annuitant or Contingent Annuitant surviving, the value of the Contract will be recalculated as if a Death Benefit had been payable based on the Contract Owner's age at the time of death. Such value will be credited to the party taking distributions upon the death of the Contract Owner with the Annuitant or Contingent Annuitant surviving. This party may be either the surviving joint owner, the succeeding owner, or the Beneficiary, depending upon all the circumstances and the terms of the Contract. (See "Death Benefit," page 12.) THE ANNUITY PERIOD On the Maturity Date, or other agreed-upon payment date, the Company will provide Annuity or Income Payments to the Contract Owner or his or her designee in accordance with the payment option selected by the Contract Owner. If a payment option has not been selected at or prior to the Maturity Date, the Company will pay to the Contract Owner the first of a series of monthly payments based on the life of the Annuitant, in accordance with Annuity Option 2 (Life Annuity with 120 Monthly Payments Assured), or for certain qualified contracts, in accordance with Annuity Option 4 (Joint and Last Survivor Joint Life Annuity -- Annuity Reduced on Death of Primary Payee) (the "Automatic Option"). If a variable payout is selected, the payments will continue to vary with the investment performance of the selected Underlying Fund. If monthly Annuity Payments are less than $100, the Company reserves the right to reduce the frequency of payments or to pay the Contract Value in one lump-sum payment. (See "The Annuity Period," page 13.) THE FIXED ACCOUNT Although this Prospectus specifically applies only to the variable features of the Contract, the Contract also allows you to allocate Purchase Payments to a Fixed Account where they will earn interest at a rate guaranteed by the Company, which interest rate will not be less than 3% per year. Transfers may also be made from the Fixed Account to the Sub-Accounts twice a year during the 30 days following the semi-annual Contract Date anniversary in an amount of up to 15% of the Fixed Account value on the semi-annual Contract Date anniversary. Additionally, automated transfers from the Fixed Account to any of the Sub-Accounts may begin at any time. Other restrictions may also apply. (See "The Fixed Account," page 23.) ------------------------------------------------------------------------------- VIII ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- FEE TABLE ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- FUND BD II AND ITS UNDERLYING FUNDS The purpose of the Fee Table is to assist Contract Owners in understanding the various costs and expenses that Contract Owners will bear, directly or indirectly, under the Contract. The information listed reflects expenses of the Sub-Accounts as well as of the Underlying Fund Expenses. Additional information regarding the charges and deductions assessed under the Contract can be found on page 6. Expenses shown do not include premium taxes, which may be applicable. CONTRACT OWNER TRANSACTION EXPENSES Contingent Deferred Sales Charge (as a percentage of purchase payments):
LENGTH OF TIME FROM PURCHASE PAYMENT SURRENDER (NUMBER OF YEARS) CHARGE ------------------------------------ --------- 1 6% 2 6% 3 6% 4 3% 5 2% 6 1% 7 and thereafter 0%
Annual Contract Administrative Charge (Waived if Contract Value is $40,000 or more) $30
ANNUAL SUB-ACCOUNT CHARGES
STANDARD ENHANCED DEATH BENEFIT DEATH BENEFIT ------------- ------------- Mortality and Expense Risk Fee (as a percentage of daily net asset value) 1.02% 1.30% Sub-Account Administrative Charge (as a percentage of daily net asset value) 0.15% 0.15% TOTAL SUB-ACCOUNT CHARGES 1.17% 1.45%
UNDERLYING FUND EXPENSES (as a percentage of average net assets of the Underlying Fund) -------------------------------------------------------------------------------
MANAGEMENT OTHER TOTAL UNDERLYING FEE EXPENSES* FUND EXPENSES ------------------------------------------------------------------------------- Smith Barney Income and Growth Portfolio 0.65% 0.10% 0.75% Alliance Growth Portfolio 0.80% 0.10% 0.90% American Capital Enterprise Portfo- lio 0.70% 0.17% 0.87% Smith Barney International Equity Portfolio 0.90% 0.35% 1.25% Smith Barney Pacific Basin Portfolio 0.90% 0.40% 1.30% TBC Managed Income Portfolio 0.65% 0.22% 0.87% Putnam Diversified Income Portfolio 0.75% 0.20% 0.95% G.T. Global Strategic Income Port- folio 0.80% 0.30% 1.10% Smith Barney High Income Portfolio 0.60% 0.10% 0.70% MFS Total Return Portfolio 0.80% 0.15% 0.95% Smith Barney Money Market Portfolio 0.60% 0.10% 0.70% AIM Capital Appreciation Portfolio 0.70% 0.20% 0.90% Smith Barney Total Return Portfolio 0.75% 0.25% 1.00%
* Other expenses are as of October 31, 1994, taking into account the current expense limitations agreed to by the Managers. The Managers waived all of their fees for the period and reimbursed the Funds for their expenses. If such fees were not waived and expenses were not reimbursed, Total Underlying Expenses for the Smith Barney/Travelers Series Fund Portfolios would have been: Smith Barney Income and Growth Portfolio, 2.08%; Alliance Growth Portfolio, 1.76%; American Capital Enterprise Portfolio, 2.66%; Smith Barney International Equity Portfolio, 2.00%; Smith Barney Pacific Basin Portfolio, 2.82%; TBC Managed Income Portfolio, 2.91%; Putnam Diversified Income Portfolio, 2.92%; G.T. Global Strategic Income Portfolio, 4.53%; Smith Barney High Income Portfolio, 2.60%; MFS Total Return Portfolio, 2.51%; Smith Barney Money Market Portfolio, 2.11%. If such fees were not waived and expenses were not reimbursed, Total Underlying Expenses for the Smith Barney Series Fund Total Return Portfolio would have been 4.14%. ------------------------------------------------------------------------------- IX EXAMPLE* THE EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE EXPENSES. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE SHOWN. STANDARD DEATH BENEFIT ELECTION ------------------------------------------------------------------------------ A $1,000 investment If the Contract is would be subject to NOT surrendered at the following ex- the end of the pe- penses, assuming a riod shown or if it 5% annual return on is annuitized, a assets, if the Con- $1,000 investment tract is surrendered would be subject to or if certain income the following ex- options are elected penses, assuming a at the end of the 5% annual return on period shown**: assets: ------------------------------------------------------------------------------
ONE YEAR THREE YEARS ONE YEAR THREE YEARS ------------------------------------------------------------------------------ Smith Barney Income and Growth Portfolio $80 $123 $20 $63 Alliance Growth Portfolio 82 127 22 67 American Capital Enterprise Portfo- lio 81 126 21 66 Smith Barney International Equity Portfolio 85 138 25 78 Smith Barney Pacific Basin Portfolio 86 139 26 79 TBC Managed Income Portfolio 81 126 21 66 Putnam Diversified Income Portfolio 82 129 22 69 G.T. Global Strategic Income Port- folio 84 133 24 73 Smith Barney High Income Portfolio 80 121 20 61 MFS Total Return Portfolio 82 129 22 69 Smith Barney Money Market Portfolio 80 121 20 61 AIM Capital Appreciation Portfolio 82 127 22 67 Smith Barney Total Return Portfolio 83 130 23 70
ENHANCED DEATH BENEFIT ELECTION ------------------------------------------------------------------------------ A $1,000 investment If the Contract is would be subject to NOT surrendered at the following ex- the end of the pe- penses, assuming a riod shown or if it 5% annual return on is annuitized, a assets, if the Con- $1,000 investment tract is surrendered would be subject to or if certain income the following ex- options are elected penses, assuming a at the end of the 5% annual return on period shown**: assets: ------------------------------------------------------------------------------
ONE YEAR THREE YEARS ONE YEAR THREE YEARS ------------------------------------------------------------------------------ Smith Barney Income and Growth Portfolio $83 $131 $23 $71 Alliance Growth Portfolio 85 136 25 76 American Capital Enterprise Portfo- lio 84 135 24 75 Smith Barney International Equity Portfolio 88 146 28 86 Smith Barney Pacific Basin Portfolio 89 148 29 88 TBC Managed Income Portfolio 84 135 24 75 Putnam Diversified Income Portfolio 85 137 25 77 G.T. Global Strategic Income Port- folio 87 142 27 82 Smith Barney High Income Portfolio 83 130 23 70 MFS Total Return Portfolio 85 137 25 77 Smith Barney Money Market Portfolio 83 130 23 70 AIM Capital Appreciation Portfolio 85 136 25 76 Smith Barney Total Return Portfolio 86 139 26 79
* The Example reflects the $30 Annual Contract Administrative Charge as an annual charge of 0.075% of assets based on an anticipated average account value of $40,000. ** The Contingent Deferred Sales Charge is waived if annuity payout has begun or if an income option of at least five years' duration is begun after the first Contract Year (see "Charges and Deductions--Contingent Deferred Sales Charge," page 6.) -------------------------------------------------------------------------------- X ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- THE INSURANCE COMPANY ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- The Travelers Life and Annuity Company (the "Company"), an indirect wholly owned subsidiary of Travelers Group Inc., is a stock insurance company chartered in 1973 in Connecticut and continuously engaged in the insurance business since that time. The Company is licensed to conduct a life insurance business in a majority of the states of the United States and intends to seek licensure in the remaining states, except New York. The Company's Home Office is located at One Tower Square, Hartford, Connecticut 06183, and its telephone number is (203) 277-0111. ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- THE SEPARATE ACCOUNT AND THE UNDERLYING FUNDS ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES (FUND BD II) Fund BD II was established on February 22, 1995 and is registered with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940, as amended (the '"1940 Act"). The assets of Fund BD II will be invested exclusively in the shares of the Underlying Funds. Fund BD II meets the definition of a separate account under the federal securities laws, and will comply with the provisions of the 1940 Act. Additionally, the operations of Fund BD II are subject to the provisions of Section 38a-433 of the Connecticut General Statutes which authorizes the Connecticut Insurance Commissioner to adopt regulations under it. Section 38a- 433 contains no restrictions on the investments of the Separate Account, and the Commissioner has adopted no regulations under the Section that affect the Separate Account. Under Connecticut law, the assets of Fund BD II will be held for the exclusive benefit of the owners of, and the persons entitled to payment under, the Contract offered by this Prospectus and under all other contracts which provide for accumulated values or dollar amount payments to reflect investment results of the Separate Account. Income, gains and losses, whether or not realized, for assets allocated to Fund BD II are in accordance with the Contracts, credited to or charged against Fund BD II without regard to other income, gains and losses of the Company. The assets held in Fund BD II are not chargeable with liabilities arising out of any other business which the Company may conduct. The obligations arising under the Contract are obligations of the Company. THE UNDERLYING FUNDS Purchase Payments applied to the Sub-Accounts of Fund BD II will be invested in one or more of the available Underlying Funds at net asset value in accordance with the selection made by the Contract Owner. Contract Owners may change their selection in accordance with the provisions of the Contract. Underlying Funds available under the Contract may be added or withdrawn as permitted by applicable law. Please read carefully the complete risk disclosure in each Portfolio's prospectus before investing. Fund BD II currently invests in the following Underlying Funds, each of which is a separate series of shares of the Smith Barney/Travelers Series Fund Inc. SMITH BARNEY INCOME AND GROWTH PORTFOLIO. The objective of the Income and Growth Portfolio is current income and long-term growth of income and capital by investing primarily, but not exclusively, in common stocks. ------------------------------------------------------------------------------- 1 ALLIANCE GROWTH PORTFOLIO. The objective of the Growth Portfolio is long- term growth of capital by investing predominantly in equity securities of companies with a favorable outlook for earnings and whose rate of growth is expected to exceed that of the U.S. economy over time. Current income is only an incidental consideration. AMERICAN CAPITAL ENTERPRISE PORTFOLIO. The Enterprise Portfolio's objective is capital appreciation through investment in securities believed to have above-average potential for capital appreciation. Any income received on such securities is incidental to the objective of capital appreciation. SMITH BARNEY INTERNATIONAL EQUITY PORTFOLIO. The objective of the International Equity Portfolio is total return on assets from growth of capital and income by investing at least 65% of its assets in a diversified portfolio of equity securities of established non-U.S. issuers. SMITH BARNEY PACIFIC BASIN PORTFOLIO. The Pacific Basin Portfolio's objective is long-term capital appreciation through investment primarily in equity securities of companies in Asian Pacific Countries. TBC MANAGED INCOME PORTFOLIO. The objective of the Managed Income Portfolio is to seek high current income consistent with prudent risk of capital through investments in corporate debt obligations, preferred stocks, and obligations issued or guaranteed by the U.S. Government or its agencies or instrumentalities. PUTNAM DIVERSIFIED INCOME PORTFOLIO. The objective of the Diversified Income Portfolio is to seek high current income consistent with preservation of capital. The Portfolio will allocate its investments among the U.S. Government Sector, the High Yield Sector, and the International Sector of the fixed income securities markets. G.T. GLOBAL STRATEGIC INCOME PORTFOLIO. The Strategic Income Portfolio's investment objective is primarily to seek high current income and secondarily to seek capital appreciation. The Portfolio allocates its assets among debt securities of issuers in the United States, developed foreign countries, and emerging markets. SMITH BARNEY HIGH INCOME PORTFOLIO. The investment objective of the High Income Portfolio is high current income. Capital appreciation is a secondary objective. The Portfolio will invest at least 65% of its assets in high-yielding corporate debt obligations and preferred stock. MFS TOTAL RETURN PORTFOLIO (A BALANCED PORTFOLIO). The Total Return Portfolio's objective is to obtain above-average income (compared to a portfolio entirely invested in equity securities) consistent with the prudent employment of capital. Generally, at least 40% of the Portfolio's assets will be invested in equity securities. SMITH BARNEY MONEY MARKET PORTFOLIO. The investment objective of the Money Market Portfolio is maximum current income and preservation of capital by investing in high quality, short-term money market instruments. AIM CAPITAL APPRECIATION PORTFOLIO. The investment objective of the AIM Capital Appreciation Portfolio is to seek capital appreciation by investing principally in common stock, with emphasis on medium-sized and smaller emerging growth companies. The following is a separate series of shares of the Smith Barney Series Fund Inc., and is also an investment option under Fund BD II: SMITH BARNEY TOTAL RETURN PORTFOLIO (AN EQUITY PORTFOLIO). The investment objective of the Smith Barney Total Return Portfolio is to provide total return, consisting of long-term capital appreciation -------------------------------------------------------------------------------- 2 and income. The Portfolio will seek to achieve its goal by investing primarily in a diversified portfolio of dividend-paying common stock. UNDERLYING FUND INVESTMENT MANAGERS The Underlying Funds receive investment management and advisory services from the following investment professionals: -------------------------------------------------------------------------------------------
FUND INVESTMENT MANAGER SUB-ADVISER ------------------------------------------------------------------------------------------- Smith Barney Income and Smith Barney Mutual Funds -- Growth Portfolio Management Inc. ------------------------------------------------------------------------------------------- Alliance Growth Portfo- Smith Barney Mutual Funds Alliance Capital Management L.P. lio Management Inc. ------------------------------------------------------------------------------------------- American Capital Enter- Smith Barney Mutual Funds American Capital Asset Management, Inc. prise Portfolio Management Inc. ------------------------------------------------------------------------------------------- Smith Barney Interna- Smith Barney Mutual Funds -- tional Equity Portfolio Management Inc. ------------------------------------------------------------------------------------------- Smith Barney Pacific Ba- Smith Barney Mutual Funds -- sin Portfolio Management Inc. ------------------------------------------------------------------------------------------- TBC Managed Income Port- Smith Barney Mutual Funds The Boston Company Asset folio Management Inc. Management, Inc. ------------------------------------------------------------------------------------------- Putnam Diversified In- Smith Barney Mutual Funds Putnam Investment Management, Inc. come Portfolio Management Inc. ------------------------------------------------------------------------------------------- G.T. Global Strategic Smith Barney Mutual Funds G.T. Capital Management, Inc. Income Portfolio Management Inc. ------------------------------------------------------------------------------------------- Smith Barney High Income Smith Barney Mutual Funds -- Portfolio Management Inc. ------------------------------------------------------------------------------------------- MFS Total Return Portfo- Smith Barney Mutual Funds Massachusetts Financial lio Management Inc. Services Company ------------------------------------------------------------------------------------------- Smith Barney Money Mar- Smith Barney Mutual Funds -- ket Portfolio Management Inc. ------------------------------------------------------------------------------------------- AIM Capital Appreciation Smith Barney Mutual Funds AIM Capital Management, Inc. Portfolio Management Inc. ------------------------------------------------------------------------------------------- Smith Barney Total Re- Smith Barney Mutual Funds -- turn Portfolio Management Inc. -------------------------------------------------------------------------------------------
SUBSTITUTION If shares of any of the Underlying Funds should not be available for purchase by the appropriate Sub-Account, or if, in the judgment of the Company further investment in such shares becomes inappropriate for the purposes of the Contract, shares of another registered, open-end management investment company may be substituted for shares of the Underlying Funds held in the Sub- Accounts. Substitution may be made with respect to both existing investments and the investment of any future Purchase Payments. However, no such substitution will be made without notice to Contract Owners, state approval if applicable, and without prior approval of the Securities and Exchange Commission, to the extent required by the 1940 Act, or other applicable law. The Company may also add other available Underlying Funds under the Contract as it deems appropriate. GENERAL All investment income and other distributions of Fund BD II are reinvested in shares of the Underlying Funds at net asset value. The Underlying Funds are required to redeem fund shares at net asset value and ------------------------------------------------------------------------------- 3 ------------------------------------------------------------------------------- to make payment within seven days. Shares of the Underlying Funds listed above are currently sold only to life insurance company separate accounts to fund benefits under variable annuity and variable life insurance contracts issued by insurance companies. Fund shares are not sold to the general public. More detailed information may be found in the current prospectuses for the Underlying Funds. These prospectuses are included with and must accompany this Prospectus. Read them carefully before investing. Additional copies of the prospectuses may be obtained by contacting your registered representative or by calling 1-800-842-8573. ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- PERFORMANCE INFORMATION ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- From time to time, the Company may advertise different types of historical performance for the Sub-Accounts of Fund BD II. The Company may advertise the "standardized average annual total returns" of the Sub-Accounts, calculated in a manner prescribed by the Securities and Exchange Commission, as well as the "non-standardized total return," as described below. "Standardized average annual total return" will show the percentage rate of return of a hypothetical initial investment of $1,000 for the most recent one- , five- and ten-year periods (or fractional periods thereof). This standardized calculation reflects the deduction of all applicable charges made to the Contract, except for premium taxes which may be imposed by certain states. "Non-standardized total return" will be calculated in a similar manner, except non-standardized total returns will not reflect the deduction of any applicable Contingent Deferred Sales Charge or the $30 annual contract administrative charge, which would decrease the level of performance shown if reflected in these calculations. Performance information may be quoted numerically or may be presented in a table, graph or other illustration. Advertisements may include data comparing performance to well-known indices of market performance (including, but not limited to, the Dow Jones Industrial Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value Line Index, and the Morgan Stanley Capital International's EAFE Index). Advertisements may also include published editorial comments and performance rankings compiled by independent organizations (including, but not limited to, Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that monitor the performance of Fund BD II and the Underlying Funds. The total return quotations are based upon historical earnings and are not necessarily representative of future performance. A Contract Owner's Contract Value at redemption may be more or less than original cost. The Statement of Additional Information contains more detailed information about these performance calculations, including actual examples of each type of performance advertised. ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- THE CONTRACT ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- The Contract described in this Prospectus is both an insurance product and a security. As an insurance product, it is subject to the insurance laws and regulations of each state in which it is available for distribution. The underlying product is an Annuity whereby Purchase Payments are paid to the Company and credited to the Contract Owner's account to accumulate until the Maturity Date. A variable annuity differs from a fixed annuity in that during the accumulation period, the Contract Value may vary from day -------------------------------------------------------------------------------- 4 to day. The Contract Owner assumes the risk of gain or loss according to the performance of the selected Sub-Account(s). There is generally no guarantee that the Contract Value at the Maturity Date will equal or exceed the total Purchase Payments made under the Contract, except as specified or elected under the Death Benefit provisions described on page 12. PURCHASE PAYMENTS The minimum initial Purchase Payment must be at least $5,000, and additional payments of at least $500 may be made under the Contract at any time following the initial payment. In some states, subsequent Purchase Payments are not allowed. The initial Purchase Payment is due and payable before the Contract becomes effective. The Company will apply each Purchase Payment to purchase Accumulation Units of the designated Sub-Account(s). The Company will apply the initial Purchase Payment within two business days following its receipt at the Company's Home Office. All subsequent Purchase Payments will be applied as of the next valuation following their receipt. RIGHT TO RETURN The Contract may be returned for a full refund of the Contract Value (including charges) within twenty days after delivery of the Contract to the Contract Owners (the "free-look period"), unless state law requires a longer period. The Contract Owner bears the investment risk during the free-look period; therefore, the Contract Value returned may be greater or less than your Purchase Payment. However, if you purchased the Contract as an Individual Retirement Annuity, (1) your Purchase Payment will be refunded in full if you return the Contract within the first seven days after delivery, and (2) the Contract Value (including charges) will be refunded if you return the Contract during the remainder of the free-look period. In addition, certain states require that Purchase Payments be refunded in full for all Contracts or for Contracts issued in replacement situations, during the entire free-look period or for some portion of it. All Contract Values will be determined as of the next valuation following the Company's receipt of the Owner's written request for refund. ACCUMULATION UNITS The number of Accumulation Units of each Sub-Account to be credited to the Contract once a Purchase Payment has been received by the Company will be determined by dividing the Purchase Payment applied to the Sub-Account by the current Accumulation Unit Value of the Sub-Account. The initial Accumulation Unit Value for each Sub-Account will equal the Accumulation Unit Value for the applicable Sub-Account available through Fund BD as of the Valuation Period for which the initial allocation is made through Fund BD II. (The dollar value of an Accumulation Unit for each Sub-Account offered through Fund BD was originally established at $1.00 at inception.) The value of an Accumulation Unit on any Valuation Date is determined by multiplying the value on the immediately preceding Valuation Date by the net investment factor for the Valuation Period just ended. The value of an Accumulation Unit on any date other than a Valuation Date will be equal to its value as of the next succeeding Valuation Date. The value of an Accumulation Unit may increase or decrease. NET INVESTMENT FACTOR The net investment factor is used to measure the investment performance of a Sub-Account from one Valuation Period to the next. The net investment factor for a Sub-Account for any Valuation Period is equal -------------------------------------------------------------------------------- 5 to the sum of 1.000000 plus the net investment rate (the gross investment rate less any applicable Sub-Account deductions during the Valuation Period relating to the Insurance Charge and the Sub-Account Administrative Charge). The gross investment rate of a Sub-Account is equal to (a - b) / c where: (A) = investment income plus capital gains and losses (whether realized or unrealized); (B) = any deduction for applicable taxes (presently zero); and (C) = the value of the assets of the Underlying Fund at the beginning of the Valuation Period. The gross investment rate may be either positive or negative. A Sub-Account's assets are based on the net asset value of the Underlying Fund, and investment income includes any distribution whose ex-dividend date occurs during the Valuation Period. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CHARGES AND DEDUCTIONS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- CONTINGENT DEFERRED SALES CHARGE There are no sales charges deducted from Purchase Payments when they are received and applied under the Contract. However, a Contingent Deferred Sales Charge will be applied if a full or partial surrender of the Contract Value is made during the first six years following a Purchase Payment. The length of time from receipt of the Purchase Payment to the time of surrender determines the amount of the charge. The purpose of the surrender charge is to help defray expenses incurred in the sale of the Contract, including commissions and other expenses associated with the printing and distribution of prospectuses and sales material. However, the Company expects that the Contingent Deferred Sales Charges assessed under the Contract will be insufficient to cover these expenses; the difference will be covered by the general assets of the Company which are attributable, in part, to mortality and expense risk charges under the Contract which are described below. The charge is equal to a percentage of the amount withdrawn from the Contract (not to exceed the aggregate amount of the Purchase Payments made under the Contract), and is calculated as follows:
LENGTH OF TIME FROM CONTINGENT PURCHASE PAYMENT DEFERRED (NUMBER OF YEARS) SALES CHARGE ------------------- ------------ 1 6% 2 6% 3 6% 4 3% 5 2% 6 1% 7 and thereafter 0%
For purposes of determining the amount of any surrender charge, surrenders will be deemed to be taken first from any applicable free withdrawal amount (as described below); next from remaining Purchase Payments (on a first-in, first- out basis); and then from contract earnings (in excess of any free withdrawal amount). Unless the Company receives instructions to the contrary, the surrender charge will be deducted from the amount requested. -------------------------------------------------------------------------------- 6 No Contingent Deferred Sales Charge will be assessed (1) in the event of distributions resulting from the death of the Contract Owner or the death of the Annuitant with no Contingent Annuitant surviving; (2) if an annuity payout has begun; or (3) if an income option of at least five years' duration is begun after the first Contract Year. FREE WITHDRAWAL ALLOWANCE. There is a 15% free withdrawal allowance available each year after the first Contract Year. The available withdrawal amount will be calculated as of the first Valuation Date of any given Contract Year. The free withdrawal allowance applies to partial surrenders of any amount and to full surrenders, except those full surrenders transferred directly to annuity contracts issued by other financial institutions. ADMINISTRATIVE CHARGES CONTRACT ADMINISTRATIVE CHARGE. An administrative charge of $30 will be deducted annually from the Contract to compensate the Company for expenses incurred in establishing and administering the Contract. The contract administrative charge will be deducted from the Contract Value on the fourth Friday of August of each year by cancelling Accumulation Units in each Sub- Account on a pro rata basis. This charge will be prorated from the date of purchase to the next date of assessment of charge. A prorated charge will also be assessed upon voluntary or involuntary surrender of the Contract. The contract administrative charge will not be assessed upon distributions resulting from the death of the Contract Owner or the Annuitant with no Contingent Annuitant surviving, or after an annuity payout has begun, or if the Contract Value is equal to or greater than $40,000 on the date of the assessment of the charge. SUB-ACCOUNT ADMINISTRATIVE CHARGE. A sub-account administrative charge is deducted daily from the Sub-Accounts of Fund BD II in order to compensate the Company for certain administrative and operating expenses of the Sub-Accounts. The charge is equivalent, on an annual basis, to 0.15% of the daily net asset value of the Sub-Accounts and is deducted on each Valuation Date at the rate of 0.000411% for each day in the Valuation Period. Neither the contract administrative charge nor the sub-account administrative charge can be increased. The charges are set at a level which does not exceed the average expected cost of the administrative services to be provided while the Contract is in force, and the Company does not expect to make a profit from these charges. INSURANCE CHARGE An insurance charge is deducted daily from the Sub-Accounts of Fund BD II. This charge is intended to cover the mortality and expense risks associated with guarantees which the Company provides under the Contract. As discussed below, a portion of the insurance charge is for the assumption of mortality risk, while the remainder is for the assumption of expense risk. The mortality risk portion of the insurance charge compensates the Company for guaranteeing to provide Annuity Payments to an Annuitant according to the terms of the Contract regardless of how long the Annuitant lives and no matter what the actual mortality experience of other Annuitants under the Contract might be, and for guaranteeing to provide the standard or the enhanced death benefit if an Annuitant dies prior to the Maturity Date. The expense risk charge compensates the Company for the risk that the charges under the Contract, which cannot be increased during the duration of the Contract, will be insufficient to cover actual costs. For those Contract Owners who have elected a standard death benefit provision, the insurance charge is equivalent, on an annual basis, to 1.02% of the daily net asset value of the Sub-Accounts. The Company ------------------------------------------------------------------------------- 7 reserves the right to lower this charge at any time. The charge is deducted on each Valuation Date at the rate of 0.002795% for each day in the Valuation Period. The Company estimates that approximately 75% of the standard death benefit insurance charge is for the assumption of mortality risk. For those Contract Owners who have elected an enhanced death benefit provision, the insurance charge is equivalent, on an annual basis, to 1.30% of the daily net asset value of the Sub-Accounts. The Company reserves the right to lower this charge at any time. The charge is deducted on each Valuation Date at the rate of .003562% for each day in the Valuation Period. The Company estimates that approximately 80% of the enhanced death benefit insurance charge is for the assumption of mortality risk. If the amount deducted for mortality and expense risks is not sufficient to cover the mortality costs and expense shortfalls, the loss is borne by the Company. If the deduction is more than sufficient, the excess will be a profit to the Company. The Company expects to make a profit from the insurance charge. REDUCTION OR ELIMINATION OF CONTRACT CHARGES The Contingent Deferred Sales Charge and the administrative charges under the Contract may be reduced or eliminated when certain sales of the Contract result in savings or reduction of sales expenses. The entitlement to such a reduction in the Contingent Deferred Sales Charges or the administrative charges will be based on the following: (1) the size and type of group to which sales are to be made; (2) the total amount of Purchase Payments to be received; and (3) any prior or existing relationship with the Company. There may be other circumstances, of which the Company is not presently aware, which could result in fewer sales expenses. In no event will reduction or elimination of the Contingent Deferred Sales Charge or the administrative charge be permitted where such reduction or elimination will be unfairly discriminatory to any person. UNDERLYING FUND CHARGES Fund BD II purchases shares of the Underlying Funds at net asset value. The net asset value of each Underlying Fund reflects investment management fees and other expenses already deducted from the assets of the Underlying Funds. For a complete description of these investment advisory fees and other expenses, refer to the prospectus for the Underlying Funds. PREMIUM TAX Certain state and local governments impose premium taxes. These taxes currently range from 0.5% to 5.0%, depending upon jurisdiction. The Company, in its sole discretion and in compliance with any applicable state law, will determine the method used to recover premium tax expenses incurred. Where required, the Company will deduct any applicable premium taxes from the Contract Value either upon death, surrender, annuitization, or at the time Purchase Payments are made to the Contract, but no earlier than when the Company has a tax liability under state law. CHANGES IN TAXES BASED UPON PREMIUM OR VALUE If there is any change in a law assessing taxes against the Company based upon the premiums of the contract gains in the contract or value of the contract, we reserve the right to charge you proportionately for this tax. This would include a tax based upon our reduced net capital gains in the Sub- Accounts on which we are not currently taxed. -------------------------------------------------------------------------------- 8 -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- OWNERSHIP PROVISIONS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- TYPES OF OWNERSHIP OWNER. The Contract belongs to the Owner designated on the Contract Specifications page, or to any other person subsequently named pursuant to a valid assignment. An assignment of ownership or a collateral assignment may be made only for nonqualified contracts. The Owner has sole power during the Annuitant's lifetime to exercise any rights and to receive all benefits given in the contract provided the Owner has not named an irrevocable beneficiary and provided the Contract is not assigned. The Owner is the recipient of all payments while the Annuitant is alive unless the Owner directs them to an alternate recipient. An alternate recipient under a payment direction does not become the Owner. JOINT OWNER. For nonqualified contracts only, Joint Owners may be named in a written request prior to the Contract Date. Joint Owners may independently exercise transfers between the Sub-Accounts or between the Fixed Account and the Sub-Accounts. All other rights of ownership must be exercised by joint action. Joint owners own equal shares of any benefits accruing or payments made to them. All rights of a Joint Owner end at death if the other Joint Owner survives. The entire interest of the deceased Joint Owner in the Contract will pass to the surviving Joint Owner. SUCCEEDING OWNER. For nonqualified contracts only, if Joint Owners are not named, the Contract Owner may name a Succeeding Owner in a written request. The Succeeding Owner becomes the Owner if living when the Owner dies. The Succeeding Owner has no interest in the Contract before then. The Owner may change or delete a Succeeding Owner by written request. BENEFICIARY The Beneficiary is the party named by the Owner in a written request. The Beneficiary has the right to receive any remaining contractual benefits upon the death of the Annuitant. If there is more than one Beneficiary surviving the Annuitant, the Beneficiaries will share equally in benefits unless different shares are recorded with the Company by written request prior to the death of the Annuitant. With nonqualified contracts, the Beneficiary may differ from the designated beneficiary as defined by the distribution provisions of the Contract. The designated beneficiary may take the contract benefits in lieu of the Beneficiary upon the death of the Contract Owner. Unless an irrevocable Beneficiary has been named, the Owner has the right to change any Beneficiary by written request during the lifetime of the Annuitant and while the Contract continues. ANNUITANT The Annuitant is designated on the Contract Specifications page, and is the individual on whose life the Maturity Date and the amount of the monthly annuity payments depend. The Annuitant may not be changed after the Contract Date. For nonqualified contracts only, the Contract Owner may also name one individual as a Contingent Annuitant by written request prior to the Contract Date. A Contingent Annuitant may not be changed, deleted or added to the Contract after the Contract Date. -------------------------------------------------------------------------------- 9 If an Annuitant who is not also an owner or a joint owner dies prior to the Maturity Date while this Contract is in effect and while the Contingent Annuitant is living: 1) the Contract Value will not be payable upon the Annuitant's death; 2) the Contingent Annuitant becomes the Annuitant; and 3) all other rights and benefits provided by this Contract will continue in effect. When a Contingent Annuitant becomes the Annuitant, the Maturity Date remains the same as previously in effect, unless otherwise provided. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- TRANSFERS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Prior to the Maturity Date, the Contract Owner may transfer all or part of the Contract Value between Sub-Accounts. Although there are currently no charges, penalties or restrictions on the amount or frequency of transfers, the Company reserves the right to charge a fee for any transfer request, and to limit the number of transfers to no more than one in any six month period. Some Underlying Funds have higher investment advisory fees than others. Therefore, a transfer from one Sub-Account to another could result in a Contract Owner's investment becoming subject to higher or lower investment advisory fees. A transfer between Sub-Accounts has no other effect on the amount or timing of any of the other charges under the Contract. Specifically, for purposes of computing the applicability of the Contingent Deferred Sales Charge, the date of the Purchase Payments made pursuant to the Contract will not be affected by transfers among Sub-Accounts. DOLLAR-COST AVERAGING (AUTOMATED TRANSFERS) Dollar-cost averaging permits the Contract Owner to transfer the same dollar amount to other Sub-Accounts on a regular basis so that more Accumulation Units are purchased in a Sub-Account if the value per unit is low and less Accumulation Units are purchased if the value per unit is high. Therefore, a lower-than-average value per unit may be achieved over the long run. You may establish automated transfers of Contract Values on a monthly or quarterly basis from the Fixed Account and certain of the Sub-Accounts to other Sub-Accounts through written request or other method acceptable to the Company. You must have a minimum total Contract Value of $5,000 to enroll in the Dollar- Cost Averaging program. The minimum total automated transfer amount is $400. Certain restrictions apply for automated transfers from the Fixed Account that do not apply to automated transfers from any of the Sub-Accounts. You may establish automated transfers of Contract Values from the Fixed Account. Automated transfers from the Fixed Account may not deplete your Fixed Account Value in a period of less than twelve months from your enrollment in the Dollar-Cost Averaging program. You may start or stop participation in the Dollar-Cost Averaging program at any time, but you must give the Company at least 30 days' notice to change any automated transfer instructions that are currently in place. Automated transfers are subject to all of the other provisions and terms of the Contract, including provisions relating to the transfer of money between Sub-Accounts. The Company reserves the right to suspend or modify transfer privileges at any time and to assess a processing fee for this service. -------------------------------------------------------------------------------- 10 Before transferring any part of the Contract Value, Contract Owners should consider the risks involved in switching between investments available under this Contract. Dollar-cost averaging requires regular investments regardless of fluctuating price levels, and does not guarantee profits or prevent losses in a declining market. Potential investors should consider their financial ability to continue purchases through periods of low price levels. TELEPHONE TRANSFERS A Contract Owner may also place a request for all or part of the Contract Value to be transferred by telephone. The telephone transfer privilege is available automatically; no special election is necessary for a Contract Owner to have this privilege available. All transfers must be in accordance with the terms of the Contract. Transfer instructions are currently accepted on each Valuation Date between 9:00 a.m. and 4:00 p.m., Eastern time, at 1-800-842- 8573. Once instructions have been accepted, they may not be rescinded; however, new telephone instructions may be given the following day. If the transfer instructions are not in good order, the Company will not execute the transfer and will promptly notify the caller. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- SURRENDERS AND REDEMPTIONS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- A Contract Owner may redeem all or any portion of the Cash Surrender Value of the Contract at any time prior to the Maturity Date. The Contract Owner must submit a written request (in a form and content satisfactory to the Company) specifying the Sub-Account (or the Fixed Account) from which surrender is to be made. The Cash Surrender Value will be determined as of the next valuation following receipt of the Owner's surrender request at the Company's Home Office. The Company may defer payment of any Cash Surrender Value for a period of not more than seven days after the request is received in the mail, but it is its intent to pay as soon as possible. Requests for surrender that are not in good order will not be processed until the deficiencies are corrected. The Company will contact the Contract Owner to advise of the reason for the delay and what is needed to act upon the surrender request. The Cash Surrender Value on any date will be equal to the Contract Value less any applicable surrender charge and any premium tax not previously deducted. The Cash Surrender Value may be more or less than the Purchase Payments made depending on the Contract Value at the time of surrender. SYSTEMATIC WITHDRAWALS Prior to the Maturity Date of the Contract, a Contract Owner may elect in writing on a form provided by the Company to take systematic withdrawals from the Contract by surrendering a specified dollar amount of at least $100 on a monthly, quarterly, semiannual or annual basis. Any applicable surrender charges above the free withdrawal allowance and any applicable premium taxes will be deducted. The minimum Contract Value required to begin systematic withdrawals is $15,000. The Company will process the withdrawals as directed by surrendering on a pro-rata basis Accumulation Units from all Sub-Accounts and/or the Fixed Account in which the Contract Owner has an interest, unless otherwise directed. The Contract Owner may begin or discontinue systematic withdrawals at any time by notifying the Company in writing, but at least 30 days' notice must be given to change any systematic withdrawal instructions that are currently in place. -------------------------------------------------------------------------------- 11 The Company reserves the right to discontinue offering systematic withdrawals or to assess a processing fee for this service upon 30 days' written notice to Contract Owners. Each systematic withdrawal is subject to federal income taxes on the taxable portion. In addition, a 10% federal penalty tax may be assessed on systematic withdrawals if the Contract Owner is under age 59 1/2. Contract Owners should consult with their tax adviser regarding the tax consequences of systematic withdrawals. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- DEATH BENEFIT -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- A Death Benefit is payable to the Beneficiary upon the death of the Annuitant prior to the Maturity Date with no Contingent Annuitant surviving. Two different types of death benefits are available under the Contract: a Standard Death Benefit and an Enhanced Death Benefit (the Enhanced Death Benefit may not be available in all jurisdictions). Death Benefits are payable upon the Company's receipt at its Home Office of due proof of death. A Beneficiary may request that a death benefit payable under the Contract be applied to one of the settlement options available under the Contract, subject to the contract provisions. (See also "Nonqualified Annuity Contracts," page 19.) See Appendix A for Contracts issued in the state of Florida. In addition, for nonqualified contracts, if the Contract Owner dies (including the first of joint owners) before the Maturity Date with the Annuitant or Contingent Annuitant surviving, and if a distribution is made as a result of such death, as required by the minimum distribution rules of the federal tax law, the Company will recalculate the value of the Contract under the provisions of "Death Proceeds Prior to the Maturity Date," below. The value of the Contract, as recalculated, will be credited to the party taking distributions upon the death of the Contract Owner with the Annuitant or Contingent Annuitant surviving. This will generally be the surviving joint owner or succeeding owner, or otherwise the Beneficiary in accordance with all the circumstances and the terms of the Contract. This party may differ from the Beneficiary who was named by the Owner in a written request and who would receive any remaining contractual benefits upon the death of the Annuitant. This part may be paid in a single lump sum, or by other options, but should take distributions as required by minimum distribution rules of the federal tax law. If the Contract Owner's spouse is the surviving joint or succeeding owner, the spouse may elect to continue the Contract as owner in lieu of taking a distribution under the Contract. (See generally, "Nonqualified Annuity Contracts," page 19.) All references to age in the "Death Proceeds Prior to the Maturity Date" section will be based on the Contract Owner's age rather than the Annuitant's age. DEATH PROCEEDS PRIOR TO THE MATURITY DATE STANDARD DEATH BENEFIT. Under the standard death benefit, if the Annuitant dies BEFORE AGE 75 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the greatest of (1), (2) or (3) below, less any applicable premium tax or prior surrenders not previously deducted: 1) the Contract Value; 2) the total Purchase Payments made under the Contract; or 3) the Contract Value on the fifth contract year anniversary immediately preceding the date on which the Company receives due proof of death. -------------------------------------------------------------------------------- 12 If the Annuitant dies ON OR AFTER AGE 75, BUT BEFORE AGE 85 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the greatest of (1), (2) or (3) below, less any applicable premium tax or prior surrenders not previously deducted: 1) the Contract Value; 2) the total Purchase Payments made under the Contract; or 3) the Contract Value on the latest fifth contract year anniversary occurring on or before the Annuitant's 75th birthday. If the Annuitant dies ON OR AFTER AGE 85 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the Contract Value, less any applicable premium tax. See Appendix A for Contracts issued in the state of Florida. ENHANCED DEATH BENEFIT. Under the enhanced death benefit, if the Annuitant dies BEFORE AGE 75 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit equal to the greater of (1) the guaranteed death benefit, or (2) the Contract Value less any applicable premium tax. The guaranteed death benefit is equal to the Purchase Payments made to the Contract (minus surrenders and applicable premium tax) increased by 5% on each contract date anniversary, but not beyond the contract date anniversary following the Annuitant's 75th birthday, with a maximum guaranteed death benefit of 200% of the total of Purchase Payments minus surrenders and minus applicable premium tax. If the Annuitant dies ON OR AFTER AGE 75, BUT BEFORE AGE 85 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the greater of (1) the guaranteed death benefit as of the Annuitant's 75th birthday, plus additional purchase payments, minus surrenders and applicable premium tax; or (2) the Contract Value less any applicable premium tax. If the Annuitant dies ON OR AFTER AGE 85 but before the Maturity Date, the Company will pay to the Beneficiary a death benefit equal to the Contract Value less any applicable premium tax. DEATH PROCEEDS AFTER THE MATURITY DATE If the Annuitant dies on or after the Maturity Date, the Company will pay the Beneficiary a death benefit consisting of any benefit remaining under the Annuity or Income Option then in effect. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- THE ANNUITY PERIOD -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- MATURITY DATE Annuity Payments will ordinarily begin on the Maturity Date stated in the Contract. If no Maturity Date is elected, the Maturity Date will be the Annuitant's 70th birthday for qualified contracts and the Annuitant's 75th birthday, or ten years after the Contract Date, if later, for nonqualified contracts. The Maturity Date is the date on which the Company will begin paying the first of a series of Annuity or Income Payments in accordance with the Settlement Option selected by the Contract Owner. Annuity or Income Payments will begin on the Maturity Date unless the Contract has been fully surrendered or the -------------------------------------------------------------------------------- 13 proceeds have been paid to the Beneficiary prior to the date. The Company may require proof that the Annuitant is alive before Annuity Payments are made. For nonqualified Contracts, at least 30 days before the original Maturity Date, a Contract Owner may elect to extend the Maturity Date to any time prior to the Annuitant's 85th birthday or, for qualified Contracts, to a later date with the Company's consent. Certain annuity options taken at the Maturity Date may be used to meet the minimum required distribution requirements of federal tax law, or a program of partial surrenders may be used instead. These mandatory distribution requirements take effect generally upon the death of the Contract Owner, or with qualified contracts upon either the Contract Owner's attainment of age 70 1/2 or the death of the Contract Owner. Independent tax advice should be sought regarding the election of minimum required distributions. See Appendix A for Contracts issued in the state of Florida. ALLOCATION OF ANNUITY At the time election of one of the Annuity Options is made, the person electing the Option may further elect to have the Contract Value applied to provide a Variable Annuity, a Fixed Annuity, or a combination of both. If at the time when Annuity Payments begin no election has been made to the contrary, the value of a Sub-Account or the Fixed-Account shall be applied to provide an annuity funded by that same Sub-Account or Fixed Account. A Contract Owner may elect to transfer Contract Values from one account to another prior to the date Annuity Payments commence in order to reallocate the basis on which Annuity Payments will be determined. (See "Transfers," page 10.) VARIABLE ANNUITY ANNUITY UNIT VALUE. The initial value of an Annuity Unit for each Sub-Account will equal the Annuity Unit Value for the applicable Sub-Account available through Fund BD as of the Valuation Period for which the initial annuitization takes effect. (The dollar value of an Annuity Unit for each Sub-Account offered through Fund BD was established at $1.) The Annuity Unit Value for each Sub- Account as of any Valuation Data is equal to (a) the value of the Annuity Unit on the immediately preceding Valuation Date, multiplied by (b) the net investment factor for that Sub-Account for the Valuation Period just ended, divided by (c) the assumed net investment factor for the Valuation Period. (For example, the assumed net investment factor based on an annual assumed net investment rate of 3.0% for a Valuation Period of one day is 1.000081 and, for a period of two days, is 1.000081 x 1.000081.) The value of an Annuity Unit as of any date other than a Valuation Date is equal to its value on the next succeeding Valuation Date. The number of Annuity Units credited to the Contract is determined by dividing the first monthly Annuity Payment attributable to each Sub-Account by the Sub-Account's Annuity Unit Value as of 14 days prior to the date Annuity Payments commence. The number of Annuity Units remains fixed during the annuity period. DETERMINATION OF FIRST ANNUITY PAYMENT. The Contract contains tables used to determine the first monthly Annuity Payment. The amount applied to effect an Annuity will be the Contract Value as of 14 days before the date Annuity Payments commence less any applicable premium taxes not previously deducted. The amount of the first monthly payment depends on the Annuity Option elected. A formula for determining the adjusted age is contained in the Contract. The total first monthly Annuity Payment is -------------------------------------------------------------------------------- 14 determined by multiplying the benefit per $1,000 of value shown in the tables of the Contract by the number of thousands of dollars of value of the Contract applied to that Annuity Option. The Company reserves the right to require satisfactory proof of age of any person on whose life Annuity Payments are based before making the first payment under any of the Settlement Options. DETERMINATION OF SECOND AND SUBSEQUENT ANNUITY PAYMENTS. The dollar amount of the second and subsequent Annuity Payments is not predetermined and may change from month to month based on the investment experience of the applicable Sub- Account. The total amount of each Annuity Payment will be equal to the sum of the basic payments in each Sub-Account. The actual amounts of these payments are determined by multiplying the number of Annuity Units credited to each Sub- Account by the corresponding Annuity Unit Value as of the date 14 days prior to the date before payment is due. See Appendix A for Contracts issued in the state of Florida. FIXED ANNUITY A Fixed Annuity is an annuity with payments which remain fixed as to dollar amount throughout the payment period. The dollar amount of the first Fixed Annuity Payment will be calculated as described under "Variable Annuity" above. All subsequent payments will be made in the same amount, and that amount will be assured throughout the payment period. If it would produce a larger payment, the Company agrees that the first Fixed Annuity Payment will be determined using the Life Annuity Tables in effect on the Maturity Date. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- PAYMENT OPTIONS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- ELECTION OF OPTIONS On the Maturity Date, or other agreed-upon date, the Company will pay an amount payable under the Contract in one lump sum, or in accordance with the payment option selected by the Contract Owner. Election of an option must be made in writing in a form satisfactory to the Company. Any election made during the lifetime of the Annuitant must be made by the Contract Owner. While the Annuitant is alive, the Contract Owner may change a Settlement Option election by written request at any time prior to the Maturity Date. Once Annuity or Income Payments have begun, no further election changes are allowed. During the Annuitant's lifetime, if no election has been made prior to the Maturity Date, the Company will pay to the Contract Owner the first of a series of monthly Annuity Payments based on the life of the Annuitant, in accordance with Annuity Option 2 (Life Annuity with 120 monthly payments assured). For certain qualified contracts, Annuity Option 4 (Joint and Last Survivor Joint Life Annuity -- Annuity Reduced on Death of Primary Payee) will be the automatic option as described in the contract. The minimum amount that can be placed under an Annuity or Income Option will be $2,000 unless the Company consents to a lesser amount. If any monthly periodic payment due any payee is less than $100, the Company reserves the right to make payments at less frequent intervals, or to pay the Contract Value in one lump-sum payment. See Appendix A for Contracts issued in the state of Florida. ------------------------------------------------------------------------------- 15 ANNUITY OPTIONS Subject to the conditions described in "Election of Options" above, all or any part of the Cash Surrender Value of the Contract may be paid under one or more of the following Annuity Options. Payments under the Annuity Options may be elected on a monthly, quarterly, semiannual or annual basis. OPTION 1 -- LIFE ANNUITY -- NO REFUND. The Company will make Annuity Payments during the lifetime of the Annuitant, terminating with the last payment preceding death. This option offers the maximum periodic payment, since there is no assurance of a minimum number of payments or provision for a death benefit for beneficiaries. (It would be possible under this option to receive only one Annuity Payment if the Annuitant died before the due date of the second Annuity Payment, only two if the Annuitant died before the third Annuity Payment, etc.) OPTION 2 -- LIFE ANNUITY WITH 120, 180 OR 240 MONTHLY PAYMENTS ASSURED. The Company will make monthly Annuity Payments during the lifetime of the Annuitant, with the agreement that if, at the death of that person, payments have been made for less than 120, 180 or 240 months, as elected, payments will be continued during the remainder of the period to the Beneficiary designated. OPTION 3 -- JOINT AND LAST SURVIVOR LIFE ANNUITY -- NO REFUND. The Company will make Annuity Payments during the joint lifetime of the two persons on whose lives payments are based, and during the lifetime of the survivor. No further payments will be made following the death of the survivor. OPTION 4 -- JOINT AND LAST SURVIVOR LIFE ANNUITY -- ANNUITY REDUCED ON DEATH OF PRIMARY PAYEE. The Company will make Annuity Payments during the lifetime of the two persons on whose lives payments are based. One of the two persons will be designated as the primary payee, the other will be designated as the secondary payee. On the death of the secondary payee, if survived by the primary payee, the Company will continue to make monthly Annuity Payments to the primary payee in the same amount that would have been payable during the joint lifetime of the two persons. On the death of the primary payee, if survived by the secondary payee, the Company will continue to make Annuity Payments to the secondary payee in an amount equal to 50% of the payments which would have been made during the lifetime of the primary payee. No further payments will be made following the death of the survivor. OPTION 5 -- OTHER ANNUITY OPTIONS. The Company will make any other arrangements for Annuity Payments as may be mutually agreed upon. INCOME OPTIONS Instead of one of the Annuity Options described above, and subject to the conditions described under "Election of Options," all or part of the Cash Surrender Value of the Contract may be paid under one or more of the following Income Options, provided that they are consistent with federal tax law qualification requirements. Payments under the Income Options may be elected on a monthly, quarterly, semiannual or annual basis: OPTION 1 -- PAYMENTS OF A FIXED AMOUNT. The Company will make equal payments of the amount elected until the Contract Value applied under this option has been exhausted. The first payment and all later payments will be paid for each Sub-Account or the Fixed Account in proportion to the Cash Surrender Value attributable to that Account. The final payment will include any amount insufficient to make another full payment. -------------------------------------------------------------------------------- 16 OPTION 2 -- PAYMENTS FOR A FIXED PERIOD. The Company will make payments for the period selected. The amount of each payment will be equal to the remaining Contract Value applied under this option divided by the number of remaining payments. OPTION 3 -- OTHER INCOME OPTIONS. The Company will make any other arrangements for Income Payments as may be mutually agreed upon. The amount applied to effect an Income Option will be the Contract Value as of 14 days before the date Income Payments commence, less any applicable premium taxes not previously deducted and any applicable contingent deferred sales charge. The Contract Value used to determine the amount of any Income Payment will be determined on the same basis as the Contract Value during the Accumulation Period, including the deduction for mortality and expense risks and the Sub-Account Administrative Charge. Income Options differ from Annuity Options in that the amount of the payments made under Income Options are unrelated to the length of life of any person. Although the Company continues to deduct the charge for mortality and expense risks, it assumes no mortality risks for amounts applied under any Income Option. Moreover, payments are unrelated to the actual life span of any person. Thus, the Annuitant may outlive the payment period. ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- MISCELLANEOUS CONTRACT PROVISIONS ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- TERMINATION No Purchase Payments after the first are required to keep the Contract in effect. However, the Company reserves the right to terminate the Contract on any Valuation Date if the Contract Value as of that date is less than $1,000 and no Purchase Payments have been made for at least two years, unless otherwise specified by state law. Termination will not occur until 31 days after the Company has mailed notice of termination to the Contract Owner at his or her last known address and to any assignee of record. If the Contract is terminated, the Company will pay to the Contract Owner the Cash Surrender Value (Contract Value, in the states of Washington and New Jersey), less any applicable administrative charge or premium tax. MISSTATEMENT If the Annuitant's or Contract Owner's sex or date of birth was misstated, all benefits under the Contract are what the Purchase Payment paid would have purchased at the correct sex and age. Proof of the Annuitant's or Contract Owner's age may be filed at any time at the Company's Home Office. REQUIRED REPORTS As often as required by law, but at least once in each Contract Year before the due date of the first Annuity Payment, the Company will furnish a report showing the number of Accumulation Units credited to the Contract and the corresponding Accumulation Unit Value as of the date of the report for each Sub-Account in which the Contract Owner has invested during the applicable period. The Company will keep all records required under federal or state laws. SUSPENSION OF PAYMENTS The Company reserves the right to suspend or postpone the date of any payment of any benefit or values for any Valuation Period (1) when the New York Stock Exchange ("the Exchange") is closed; (2) when trading ------------------------------------------------------------------------------- 17 on the Exchange is restricted; (3) when an emergency exists as determined by the Securities and Exchange Commission so that disposal of the securities held in the Sub-Accounts is not reasonably practicable or it is not reasonably practicable to determine the value of the Sub-Account's net assets; or (4) during any other period when the Securities and Exchange Commission, by order, so permits for the protection of securityholders. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- FEDERAL TAX CONSIDERATIONS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The following description of the federal income tax consequences under this Contract is not exhaustive and is not intended to cover all situations. Because of the complexity of the law and the fact that the tax results will vary according to the factual status of the individual involved, tax advice may be needed by a person contemplating purchase of an annuity contract and by a Contract Owner or Beneficiary who may make elections under a contract. For further information, a qualified tax adviser should be consulted. GENERAL TAXATION OF ANNUITIES Amounts credited to the Contract are not generally taxable until they are received by the Contract Owner or the Beneficiary, either in the form of Annuity Payments or other distributions. Distributions from annuities that include previously taxed amounts may be taxed on either an income-first basis or an income-last basis, or on a pro-rata basis according to the type of plan or due to other circumstances. TAX LAW DIVERSIFICATION REQUIREMENTS FOR VARIABLE ANNUITIES The Code requires that any nonqualified variable annuity contracts based on a segregated asset account shall not be treated as an annuity for any period if investments made in the account are not adequately diversified. Final tax regulations define how segregated asset accounts must be diversified. The Company monitors the diversification of investments constantly and believes that its accounts are adequately diversified. The consequence of any failure is essentially the loss to the contract owner of tax deferred treatment. The Company intends to administer all contracts subject to this provision of law in a manner that will maintain adequate diversification. OWNERSHIP OF THE INVESTMENTS Assets in the segregated asset accounts must be owned by the Company and not by the contract owner for federal income tax purposes. Otherwise, the deferral of taxes is lost and income and gains from the accounts would be includible annually in the contract owner's gross income. The Internal Revenue Service has stated in published rulings that a variable contract owner will be considered the owner of the assets of a segregated asset account if the owner possesses an incident of ownership in those assets, such as the ability to exercise investment control over the assets. The Treasury Department announced, in connection with the issuance of temporary regulations concerning investment diversification, that those regulations "do not provide guidance concerning the circumstances in which investor control of the investments of a segregated asset account may cause the investor, rather than the insurance company, to be treated as the owner of the assets of the account." This announcement, dated September 15, 1986, also stated that the guidance would be issued by way of regulations or rulings on the "extent to which policyholders may direct their investments to particular subaccounts [of a segregated -------------------------------------------------------------------------------- 18 asset account] without being treated as owners of the underlying assets." As of the date of this prospectus, no such guidance has been issued. The Company does not know if such guidance will be issued, or if it is, what standards it may set. Furthermore, the Company does not know if such guidance may be issued with retroactive effect. New regulations are generally issued with a prospective-only effect as to future sales or as to future voluntary transactions in existing contracts. The Company therefore reserves the right to modify the contract as necessary to attempt to prevent contract owners from being considered the owner of the assets of the accounts. PENALTY TAX FOR PREMATURE DISTRIBUTIONS Taxable distributions taken before the Contract Owner has attained the age of 59 1/2 will be subject to a 10% additional tax penalty unless the distribution is taken in a series of periodic distributions for life or life expectancy, or unless the distribution follows the death or disability of the Contract Owner. Other exceptions may be available in certain tax-benefited plans. MANDATORY DISTRIBUTIONS FOR QUALIFIED PLANS Federal tax law requires that minimum annual distributions begin by April 1st of the calendar year following the calendar year in which a participant under a qualified plan, a Section 403(b) annuity, or an IRA attains age 70 1/2. Distributions must also begin or be continued according to required patterns following the death of the Owner or the Annuitant. NONQUALIFIED ANNUITY CONTRACTS Individuals may purchase tax-deferred annuities without tax law funding limits. The Purchase Payments receive no tax benefit, deduction or deferral, but increases in the value of the contract are generally deferred from tax until distribution. If a nonqualified annuity is owned by other than an individual, however, (e.g., by a corporation), the increases in value attributable to Purchase Payments made after February 28, 1986 are includable in income annually. Furthermore, for contracts issued after April 22, 1987, all deferred increases in value will be includable in the income of a Contract Owner when the Contract Owner transfers the contract without adequate consideration. If two or more annuity contracts are purchased from the same insurer within the same calendar year, distributions from any of them will be taxed based upon the amount of income in all of the same calendar year series of annuities. This will generally have the effect of causing taxes to be paid sooner on the deferred gain in the contracts. Those receiving partial distributions made before the Maturity Date will generally be taxed on an income-first basis to the extent of income in the contract. If you are exchanging another annuity contract for this annuity, certain pre-August 14, 1982 deposits into an annuity contract that have been placed in the contract by means of a tax-deferred exchange under Section 1035 of the Code may be withdrawn first without income tax liability. This information on deposits must be provided to the Company by the other insurance company at the time of the exchange. There is income in the contract generally to the extent the Cash Value exceeds the investment in the contract. The investment in the contract is equal to the amount of premiums paid less any amount received previously which was excludable from gross income. Any direct or indirect borrowing against the value of the contract or pledging of the contract as security for a loan will be treated as a cash distribution under the tax law. -------------------------------------------------------------------------------- 19 The federal tax law requires that nonqualified annuity contracts meet minimum mandatory distribution requirements upon the death of the Contract Owner, including the first of joint owners. Failure to meet these requirements will cause the surviving joint owner, the succeeding Contract Owner, or the Beneficiary to lose the tax benefits associated with annuity contracts, i.e., primarily the tax deferral prior to distribution. The distribution required depends, among other things, upon whether an Annuity Option is elected or whether the new Contract Owner is the surviving spouse. Contracts will be administered by the Company in accordance with these rules and the Company will make a notification when payments should be commenced. INDIVIDUAL RETIREMENT ANNUITIES To the extent of earned income for the year and not exceeding $2,000 per individual, an individual may make deductible contributions to an individual retirement annuity (IRA). There are certain limits on the deductible amount based on the adjusted gross income of the individual and spouse and based on their participation in a retirement plan. If an individual is married and the spouse does not have earned income, the individual may establish IRAs for the individual and spouse. Purchase Payments may then be made annually into IRAs for both spouses in the maximum amount of 100% of earned income up to a combined limit of $2,250. The Code provides for the purchase of a Simplified Employee Pension (SEP) plan. A SEP is funded through an IRA with an annual employer contribution limit of 15% of compensation up to $30,000 for each participant. QUALIFIED PENSION AND PROFIT-SHARING PLANS Under a qualified pension or profit-sharing plan, Purchase Payments made by an employer are not currently taxable to the participant and increases in the value of a contract are not subject to taxation until received by a participant or Beneficiary. Distributions are taxable to the participant or Beneficiary as ordinary income in the year of receipt. Any distribution that is considered the participant's "investment in the contract" is treated as a return of capital and is not taxable. Certain lump-sum distributions may be eligible for special forward averaging tax treatment for certain classes of individuals. FEDERAL INCOME TAX WITHHOLDING The portion of a distribution which is taxable income to the recipient will be subject to federal income tax withholding as follows: 1. ELIGIBLE ROLLOVER DISTRIBUTION FROM SECTION 403(B) PLANS OR ARRANGEMENTS OR FROM QUALIFIED PENSION AND PROFIT-SHARING PLANS There is a mandatory 20% tax withholding for plan distributions that are eligible for rollover to an IRA or to another retirement plan but that are not directly rolled over. A distribution made directly to a participant or Beneficiary may avoid this result if: (a)a periodic settlement distribution is elected based upon a life or life expectancy calculation, or (b) a term-for-years settlement distribution is elected for a period of ten years or more, payable at least annually, or (c) a minimum required distribution as defined under the tax law is taken after the attainment of the age of 70 1/2 or as otherwise required by law. -------------------------------------------------------------------------------- 20 A distribution including a rollover that is not a direct rollover will be subject to the 20% withholding, and a 10% additional tax penalty may apply to any amount not added back in the rollover. The 20% withholding may be recovered when the participant or Beneficiary files a personal income tax return for the year if a rollover was completed within 60 days of receipt of the funds, except to the extent that the participant or spousal Beneficiary is otherwise underwithheld or short on estimated taxes for that year. 2. OTHER NON-PERIODIC DISTRIBUTIONS (FULL OR PARTIAL REDEMPTIONS) To the extent not described as requiring 20% withholding in 1 above, the portion of a non-periodic distribution which constitutes taxable income will be subject to federal income tax withholding, if the aggregate distributions exceed $200 for the year, unless the recipient elects not to have taxes withheld. If no such election is made, 10% of the taxable distribution will be withheld as federal income tax. Election forms will be provided at the time distributions are requested. This form of withholding applies to all annuity programs. 3. PERIODIC DISTRIBUTIONS (DISTRIBUTIONS PAYABLE OVER A PERIOD GREATER THAN ONE YEAR) The portion of a periodic distribution which constitutes taxable income will be subject to federal income tax withholding under the wage withholding tables as if the recipient were married claiming three exemptions. A recipient may elect not to have income taxes withheld or have income taxes withheld at a different rate by providing a completed election form. Election forms will be provided at the time distributions are requested. This form of withholding applies to all annuity programs. As of January 1, 1994, a recipient receiving periodic payments (e.g., monthly or annual payments under an Annuity Option) which total $13,700 or less per year, will generally be exempt from periodic withholding. Recipients who elect not to have withholding made are liable for payment of federal income tax on the taxable portion of the distribution. All recipients may also be subject to penalties under the estimated tax payment rules if withholding and estimated tax payments are not sufficient to cover tax liabilities. Recipients who do not provide a social security number or other taxpayer identification number will not be permitted to elect out of withholding. Additionally, United States citizens residing outside of the country, or U.S. legal residents temporarily residing outside the country, are not permitted to elect out of withholding. ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- VOTING RIGHTS ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- The Contract Owner has certain voting rights in Fund BD II and the Underlying Funds. The number of votes which a Contract Owner may cast in the accumulation period is equal to the number of Accumulation Units credited to the account under the Contract. During the annuity period, the Contract Owner may cast the number of votes equal to (i) the reserve related to the Contract divided by (ii) the value of an Accumulation Unit. A Contract Owner's voting rights will decline as the reserve for the Contract declines. Upon the death of the Contract Owner, all voting rights will vest in the Beneficiary of the Contract, except in the case of contracts where the surviving spouse may succeed to the ownership. In accordance with its view of present applicable law, the Company will vote shares of Underlying Funds held by Fund BD II at regular and special meetings of the Underlying Fund shareholders in accordance with instructions received from persons having a voting interest in Fund BD II. The Company will vote shares for which it has not received instructions in the same proportion as it votes shares for ------------------------------------------------------------------------------- 21 which it has received instructions. However, if the Investment Company Act of 1940 ("1940 Act") or any regulation thereunder should be amended, or if the present interpretation thereof should change, and as a result the Company determines that it is permitted to vote shares of the Underlying Funds in its own right, it may elect to do so. The number of shares which a person has a right to vote will be determined as of the date concurrent with the date established by the respective Underlying Fund for determining shareholders eligible to vote at the meeting of the fund, and voting instructions will be solicited by written communication before the meeting in accordance with the procedures established by the Underlying Fund. Each person having a voting interest in Fund BD II will receive periodic reports relating to the Underlying Fund(s) in which he or she has an interest, as well as any proxy materials, including a form on which to give voting instructions with respect to the proportion of the Underlying Fund shares held by Fund BD II which correspond to his or her interest in the Sub-Account. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- DISTRIBUTION OF VARIABLE ANNUITY CONTRACTS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Company intends to sell the Contracts in all jurisdictions where it is licensed to do business and where the Contract is approved. The Contracts will be sold by life insurance sales agents who represent the Company, and who are licensed registered representatives of the Company or certain other registered broker-dealers. The compensation paid to sales representatives will not exceed 8.5% of the payments made under the Contracts. From time to time, the Company may pay or permit other promotional incentives, in cash, credit or other compensation. Any sales representative or employee will have been qualified to sell Variable Annuities under applicable federal and state laws. Each broker-dealer is registered with the Securities and Exchange Commission under the Securities Exchange Act of 1934, and all are members of the National Association of Securities Dealers, Inc. Tower Square Securities, Inc., an affiliate of the Company, is the principal underwriter for the Contracts. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- STATE REGULATION -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- The Company is subject to the laws of the state of Connecticut governing insurance companies and to regulation by the Insurance Commissioner of the state of Connecticut. An annual statement covering the operations of the Company for the preceding year, as well as its financial conditions as of December 31 of such year, must be filed with the Commissioner in a prescribed format on or before March 1 of each year. The Company's books and assets are subject to review or examination by the Commissioner or his agents at all times, and a full examination of its operations is conducted at least once every four years. The Company is also subject to the insurance laws and regulations of all other states in which it is licensed to operate. However, the insurance departments of each of these states generally apply the laws of the jurisdiction of domicile in determining the field of permissible investments. -------------------------------------------------------------------------------- 22 CONFORMITY WITH STATE AND FEDERAL LAWS The Contract is governed by the laws of the state in which it is delivered. Any paid-up Annuity, Cash Surrender Value or death benefits that are available under the Contract are not less than the minimum benefits required by the statutes of the state in which the Contract is delivered. The Company may at any time make any changes, including retroactive changes, in the Contract to the extent that the change is required to meet the requirements of any law or regulation issued by any governmental agency to which the Company, the Contract or the Contract Owner is subject. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- LEGAL PROCEEDINGS AND OPINIONS -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- There are no pending material legal proceedings affecting Fund BD II. Legal matters in connection with the federal laws and regulations affecting the issue and sale of the Contract described in this Prospectus, as well as the organization of the Company, its authority to issue variable annuity contracts under Connecticut law and the validity of the forms of the variable annuity contracts under Connecticut law, have been reviewed by the General Counsel of the Life and Annuities Division of the Company. -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- THE FIXED ACCOUNT -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- Purchase Payments allocated to the Fixed Account portion of the Contract and any transfers made to the Fixed Account become part of the general account of the Company which supports insurance and annuity obligations. Because of exemptive and exclusionary provisions, interests in the general account have not been registered under the Securities Act of 1933 ("1933 Act"), nor is the general account registered as an investment company under the 1940 Act. Accordingly, neither the general account nor any interest therein is generally subject to the provisions of the 1933 or 1940 Acts, and the staff of the Securities and Exchange Commission does not generally review the disclosure in the prospectus relating to the Fixed Account. Disclosure regarding the Fixed Account and the general account may, however, be subject to certain generally applicable provisions of the federal securities laws relating to the accuracy and completeness of statements made in the prospectus. Under the Fixed Account, the Company assumes the risk of investment gain or loss, guarantees a specified interest rate, and guarantees a specified periodic annuity payment. The investment gain or loss of Fund BD II or any of the Sub- Accounts does not affect the Fixed Account portion of the Contract Owner's Contract Value, or the dollar amount of fixed annuity payments made under any payout option. The Fixed Account is secured by part of the general assets of the Company. The general assets of the Company include all assets of the Company other than those held in Fund BD II or any other separate account sponsored by the Company or its affiliates. Purchase Payments will be allocated to the Fixed Account at the direction of the Contract Owner at the time of purchase or at a later date. The Company will invest the assets of the Fixed Account in those assets chosen by the Company and allowed by applicable law. Investment income from such Fixed Account assets will be allocated by the Company between itself and the Contracts participating in the Fixed Account. -------------------------------------------------------------------------------- 23 Investment income from the Fixed Account allocated to the Company includes compensation for mortality and expense risks borne by the Company in connection with Fixed Account Contracts. The amount of such investment income allocated to the Contracts will vary from year to year in the sole discretion of the Company at such rate or rates as the Company prospectively declares from time to time. The initial rate for any deposit into the Fixed Account is guaranteed for one year from the date of such deposit. Subsequent renewal rates will be guaranteed for the calendar quarter. The Company also guarantees that for the life of the Contract it will credit interest at not less than 3% per year. ANY INTEREST CREDITED TO AMOUNTS ALLOCATED TO THE FIXED ACCOUNT IN EXCESS OF 3% PER YEAR WILL BE DETERMINED IN THE SOLE DISCRETION OF THE COMPANY. THE CONTRACT OWNER ASSUMES THE RISK THAT INTEREST CREDIT TO THE FIXED ACCOUNT MAY NOT EXCEED THE MINIMUM GUARANTEE OF 3% FOR ANY GIVEN YEAR. The Company guarantees that, at any time, the Fixed Account Contract Value will not be less than the amount of the Purchase Payments allocated to the Fixed Account, plus interest credited as described above, less any applicable premium taxes or prior surrenders. If the Contract Owner effects a surrender, the amount available from the Fixed Account will be reduced by any applicable Contingent Deferred Sales Charge. TRANSFERS Transfers from the Fixed Account to any of the Sub-Accounts will be permitted twice a year during the 30 days following the semiannual Contract Date anniversary in an amount of up to 15% of the Fixed Account Value on the semiannual Contract Date anniversary. (This restriction does not apply to transfers from the Dollar-Cost Averaging Program.) Amounts previously transferred from the Fixed Account to the Sub-Accounts may not be transferred back to the Fixed Account for a period of at least six months from the date of transfer. The Company reserves the right to waive either of these restrictions in its discretion. Automated transfers from the Fixed Account to any of the Sub-Accounts may begin at any time. Automated transfers from the Fixed Account may not deplete your Fixed Account value in a period of less than twelve months from your enrollment in the Dollar-Cost Averaging Program. -------------------------------------------------------------------------------- 24 ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- APPENDIX A ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- FOR CONTRACTS ISSUED IN THE STATE OF FLORIDA DEATH BENEFIT The Enhanced Death Benefit is NOT available in Florida. STANDARD DEATH BENEFIT. Under the standard death benefit, if the Annuitant dies BEFORE AGE 75 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the greatest of (1), (2) or (3) below, less any applicable premium tax or prior surrenders not previously deducted: (1) the Contract Value; (2) the total Purchase Payments made under the Contract; or (3) the Contract Value on the fifth contract year anniversary immediately preceding the date on which the Company receives due proof of death. IF THE ANNUITANT DIES ON OR AFTER AGE 75, BUT BEFORE AGE 90 and before the Maturity Date, the Company will pay to the Beneficiary a death benefit in an amount equal to the greatest of (1), (2) or (3) below, less any applicable premium tax or prior surrenders not previously deducted: (1) the Contract Value; (2) the total Purchase Payments made under the Contract; or (3) the Contract Value on the latest fifth contract year anniversary occurring on or before the Annuitant's 75th birthday. THE ANNUITY PERIOD MATURITY DATE The maturity date may not be any date beyond the Annuitant's 90TH birthday. THE VARIABLE ANNUITY Variable payouts are not permitted in Florida. Contract Owners may only have their Contract Values applied to provide a Fixed Annuity. Disregard the "Variable Annuity" section described on page 14. ELECTION OF OPTIONS ON THE MATURITY DATE, OR OTHER AGREED-UPON DATE, THE COMPANY WILL PAY AN AMOUNT PAYABLE UNDER THE CONTRACT IN ACCORDANCE WITH THE PAYMENT OPTION SELECTED BY THE CONTRACT OWNER. Election of an option must be made in writing in a form satisfactory to the Company. Any election made during the lifetime of the Annuitant must be made by the Contract Owner. While the Annuitant is alive, the Contract Owner may change a Settlement Option election by Written Request at any time prior to the Maturity Date. Once Annuity or Income Payments have begun, no further election changes are allowed. During the Annuitant's lifetime, if no election has been made prior to the Maturity Date, the Company will pay to the Contract Owner the first of a series of monthly Annuity Payments based on the life of the Annuitant, in ------------------------------------------------------------------------------- 25 accordance with Annuity Option 2 (Life Annuity with 120 monthly payments assured). For certain tax-qualified contracts, Annuity Option 4 (Joint and Last Survivor Joint Life Annuity--Annuity Reduced on Death of Primary Payee) will be the automatic option as described in the contract. The minimum amount that can be placed under an Annuity or Income Option will be $2,000 unless the Company consents to a lesser amount. If any monthly periodic payment due any payee is less than $100, the Company reserves the right to make payments at less frequent intervals, or to pay the Contract Value in one lump-sum payment. -------------------------------------------------------------------------------- 26 ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- APPENDIX B ------------------------------------------------------------------------------- ------------------------------------------------------------------------------- CONTENTS OF THE STATEMENT OF ADDITIONAL INFORMATION The Statement of Additional Information contains more specific information and financial statements relating to the Separate Account and The Travelers Life and Annuity Company. A list of the contents of the Statement of Additional Information is set forth below: The Insurance Company Principal Underwriter Distribution and Management Agreement Valuation of Assets Performance Information Independent Accountants Financial Statements -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- COPIES OF THE STATEMENT OF ADDITIONAL INFORMATION DATED SEPTEMBER 22, 1995 (FORM NO. L-12540S ARE AVAILABLE WITHOUT CHARGE. TO REQUEST A COPY, PLEASE CLIP THIS COUPON ON THE DOTTED LINE ABOVE, ENTER YOUR NAME AND ADDRESS IN THE SPACES PROVIDED BELOW, AND MAIL TO: THE TRAVELERS LIFE AND ANNUITY COMPANY, ANNUITY INVESTOR SERVICES--5SHS ONE TOWER SQUARE, HARTFORD, CONNECTICUT 06183- 9061. Name: _________________________________________________________________________ Address: ______________________________________________________________________ _______________________________________________________________________________ ------------------------------------------------------------------------------- 27 PART B Information Required in a Statement of Additional Information ------------------------------------------------------------- VINTAGE STATEMENT OF ADDITIONAL INFORMATION dated September 22, 1995 for THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES ISSUED BY THE TRAVELERS LIFE AND ANNUITY COMPANY This Statement of Additional Information ("SAI") is not a prospectus but relates to, and should be read in conjunction with, the Individual Variable Annuity Contract Prospectus dated September 22, 1995. A copy of the Prospectus may be obtained by writing to The Travelers Life and Annuity Company, Annuity Services - 5 SHS, One Tower Square, Hartford, Connecticut 06183-9061, or by calling 1-800-842-8573. TABLE OF CONTENTS
THE INSURANCE COMPANY.............................................. 1 PRINCIPAL UNDERWRITER.............................................. 1 DISTRIBUTION AND MANAGEMENT AGREEMENT.............................. 1 VALUATION OF ASSETS................................................ 1 PERFORMANCE INFORMATION............................................ 2 INDEPENDENT ACCOUNTANTS............................................ 4 FINANCIAL STATEMENTS............................................... 4
THE INSURANCE COMPANY The Travelers Life and Annuity Company (the "Company"), an indirect wholly owned subsidiary of Travelers Group Inc., is a stock insurance company chartered in 1973 in Connecticut and continuously engaged in the insurance business since that time. The Company is licensed to conduct a life insurance business in a majority of the states of the United States, and intends to seek licensure in the remaining states, except New York. The Company's Home Office is located at One Tower Square, Hartford, Connecticut 06183, and its telephone number is (203) 277-0111. The Company is a wholly owned subsidiary of The Travelers Insurance Company, which is indirectly owned, through a wholly owned subsidiary, by Travelers Group Inc., a financial services holding company engaged, through its subsidiaries, principally in four business segments: (i) Investment Services; (ii) Consumer Finance Services; (iii) Life Insurance Services; and (iv) Property and Casualty Insurance Services. PRINCIPAL UNDERWRITER Tower Square Securities, Inc. ("TSSI"), an affiliate of the Company, serves as principal underwriter for Fund BD II and the Contracts. The offering is continuous. TSSI is an indirect wholly owned subsidiary of Travelers Group Inc. and its principal executive offices are located at One Tower Square, Hartford, Connecticut. DISTRIBUTION AND MANAGEMENT AGREEMENT Under the terms of the Distribution and Management Agreement among Fund BD II, the Company and TSSI, the Company provides all administrative services and mortality and expense risk guarantees related to variable annuity contracts sold by the Company in connection with Fund BD II. TSSI performs the sales functions related to the Contracts. The Company reimburses TSSI for commissions paid, other sales expenses and certain overhead expenses connected with sales functions. The Company also pays all costs (including costs associated with the preparation of sales literature); all costs of qualifying Fund BD II and the variable annuity contract with regulatory authorities; the costs of proxy solicitation; and all custodian, accountant's and legal fees. The Company also provides without cost to Fund BD II all necessary office space, facilities, and personnel to manage its affairs. VALUATION OF ASSETS The value of the assets of each Underlying Fund is determined on each Valuation Date as of the close of the New York Stock Exchange. Each security traded on a national securities exchange is valued at the last reported sale price on the Valuation Date. If there has been no sale on that day, then the value of the security is taken to be the mean between the reported bid and 1 asked prices on the Valuation Date or on the basis of quotations received from a reputable broker or any other recognized source. Any security not traded on a securities exchange but traded in the over-the-counter-market and for which market quotations are readily available is valued at the mean between the quoted bid and asked prices on the Valuation Date or on the basis of quotations received from a reputable broker or any other recognized source. Securities traded on the over-the-counter-market and listed securities with no reported sales are valued at the mean between the last reported bid and asked prices or on the basis of quotations received from a reputable broker or other recognized source. Short-term investments for which a quoted market price is available are valued at market. Short-term investments maturing in more than sixty days for which there is no reliable quoted market price are valued by "marking to market" (computing a market value based upon quotations from dealers or issuers for securities of a similar type, quality and maturity.) "Marking to market" takes into account unrealized appreciation or depreciation due to changes in interest rates or other factors which would influence the current fair values of such securities. Short-term investments maturing in sixty days or less for which there is no reliable quoted market price are valued at amortized cost which approximates market. PERFORMANCE INFORMATION From time to time, the Company may advertise several types of historical performance for Sub-Accounts of Fund BD II. The Company may advertise the "standardized average annual total returns" of the Sub-Accounts, calculated in a manner prescribed by the Securities and Exchange Commission, as well as the "non-standardized total return," as described below: STANDARDIZED METHOD. Quotations of average annual total return are computed according to a formula in which a hypothetical initial investment of $1,000 is applied to the Sub-Account, and then related to ending redeemable values over one, five and ten year periods, or for a period covering the time during which the Underlying Fund held in the Sub-Account has been in existence if the Underlying Fund has not been in existence for one of the prescribed periods. These quotations reflect the deduction of all recurring charges during each period (on a pro rata basis in the case of fractional periods). The deduction for the annual administrative charge ($30) is converted to a percentage of assets based on the actual fee collected, divided by the average net assets per contract sold under the Prospectus to which this Statement of Additional Information relates. Each quotation assumes a total redemption at the end of each period with the assessment of any applicable Contingent Deferred Sales Charge at that time. NON-STANDARDIZED METHOD. Non-standardized "total return" will be calculated in a similar manner based on the performance of the Sub-Account over a period of time, usually for the calendar year-to-date, and for the past one-, three-, five- and seven-year periods. Non-standardized total return will not reflect the deduction of any applicable Contingent Deferred 2 Sales Charge or the $30 annual contract administrative charge, which, if reflected, would decrease the level of performance shown. The contingent Deferred Sales Charge is not reflected because the Contract is designed for long-term investment. GENERAL. Within the guidelines prescribed by the SEC and the National Association of Securities Dealers, Inc. ("NASD"), performance information may be quoted numerically or may be presented in a table, graph or other illustration. Advertisements may include data comparing performance to well-known indices of market performance (including, but not limited to, the Dow Jones Industrial Average, the Standard & Poor's (S&P) 500 Index and the S&P 400 Index, the Lehman Brothers Long T-Bond Index, the Russell 1000, 2000 and 3000 Indices, the Value Line Index, and the Morgan Stanley Capital International's EAFE Index). Advertisements may also include published editorial comments and performance rankings compiled by independent organizations (including, but not limited to, Lipper Analytical Services, Inc. and Morningstar, Inc.) and publications that monitor the performance of Fund BD II and the Underlying Funds. For Sub-Accounts that invest in Underlying Funds that were in existence prior to the date the Underlying Funds became available under Fund BD II, the standardized average total return and non-standardized total return quotations will show the investment performance that such Underlying Funds would have achieved (reduced by the applicable charges) had they been held as Sub- Accounts under the Contract for the period quoted. The total return quotations are based upon historical earnings and are not necessarily representative of future performance. An Owner's Contract Value at redemption may be more or less than original cost. Average annual total returns for each of the Sub-Accounts computed according to the standardized and non-standardized methods for the period ending December 31, 1994 (beginning at inception date) are set forth in the following table. (Parentheses indicate a negative number.) TOTAL RETURN CALCULATIONS SUB-ACCOUNTS OF FUND BD II
---------------------------------------------------------------------------------- STANDARDIZED NON-STANDARDIZED Regular Enhanced Regular Enhanced Inception 1 Year 1 Year 1 Year 1 Year Date ---------------------------------------------------------------------------------- Smith Barney Income and Growth Portfolio (7.78)% (7.91)% (1.85)% (2.00)% 6/94 Alliance Growth Portfolio (1.32)% (1.48)% 4.72% 4.56% 6/94 American Capital Enterprise Portfolio (2.18)% (2.33)% 3.86% 3.71% 6/94 Smith Barney International Equity Portfolio (10.27)% (10.40)% (4.51)% (4.65)% 6/94 Smith Barney Pacific Basin Portfolio (15.50)% (15.62)% (10.07)% (10.20)% 6/94
3 TOTAL RETURN CALCULATIONS SUB-ACCOUNTS OF FUND BD II (Continued)
------------------------------------------------------------------------------- STANDARDIZED NON-STANDARDIZED Regular Enhanced Regular Enhanced Inception 1 Year 1 Year 1 Year 1 Year Date ------------------------------------------------------------------------------- TBC Managed Income Portfolio (6.35)% (6.48)% (0.33)% (0.48)% 6/94 Putnam Diversified Income Portfolio (5.19)% (5.34)% 0.85% 0.70% 6/94 G.T. Global Strategic Income Portfolio (11.21)% (11.34)% (5.51)% (5.64)% 6/94 Smith Barney High Income Portfolio (7.20)% (7.34)% (1.24)% (1.39)% 6/94 MFS Total Return Portfolio (8.03)% (8.17)% (2.12)% (2.46)% 6/94 Smith Barney Money Market Portfolio (4.47)% (4.62)% 1.57% 1.42% 6/94 AIM Capital Appreciation -- -- -- -- 9/95 Portfolio Smith Barney Total Return Portfolio (4.99)% (5.02)% 1.36% 1.12% 11/94
INDEPENDENT ACCOUNTANTS Coopers & Lybrand L.L.P., independent certified public accountants, 100 Pearl Street, Hartford, Connecticut, are the independent auditors for Fund BD II. The services provided to Fund BD II include primarily the examination of the Fund's financial statements. FINANCIAL STATEMENTS Financial Statements for Fund BD II are not available since the Fund had no assets as of the effective date of this SAI. Financial statements for The Travelers Life and Annuity Company are included in this SAI. 4 VINTAGE STATEMENT OF ADDITIONAL INFORMATION Individual Variable Annuity Contract issued by The Travelers Life and Annuity Company One Tower Square Hartford, Connecticut 06183 L-12540S September, 1995 PART C Other Information ----------------- Item 24. Financial Statements and Exhibits (a) The audited financial statements of The Travelers Life and Annuity Company and the Reports of Independent Accountants are contained in the Statement of Additional Information. The financial statements of The Travelers Life and Annuity Company include: Statement of Operations and Retained Earnings for the years ended December 31, 1994, 1993 and 1992 Balance Sheet as of December 31, 1994 and 1993 Statement of Cash Flows for the years ended December 31, 1994, 1993 and 1992 Notes to Financial Statements The unaudited interim financial statements of The Travelers Life and Annuity Company are contained in the Statement of Additional Information. These financial statements include: Condensed Statement of Operations and Retained Earnings for the six months ended June 30, 1995 Condensed Balance Sheet as of June 30, 1995 Condensed Statement of Cash Flows for the six months ended June 30, 1995 Notes to Condensed Financial Statements Financial statements of the Registrant will not be provided since the Registrant will have no assets as of the effective date of the Registration Statement. (b) Exhibits 1. Resolution of The Travelers Life and Annuity Company Board of Directors authorizing the establishment of the Registrant. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 2. Not Applicable. 3. Distribution and Management Agreement among the Registrant, The Travelers Life and Annuity Company and Tower Square Securities, Inc. 4. Variable Annuity Contracts. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 5. Application. 6(a). Charter of The Travelers Life and Annuity Company, as amended on April 10, 1990. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 6(b). By-Laws of The Travelers Life and Annuity Company, as amended on October 20, 1994. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 7. None. 8. None. 9. Opinion of Counsel as to the legality of securities being registered. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 10(a). Consent of Coopers & Lybrand L.L.P., Independent Certified Public Accountants, to the inclusion in this Form N-4 of their report on the financial statements of The Travelers Life and Annuity Company contained in Part B of this Registration Statement. 10(b). Consent of KPMG Peat Marwick LLP, Independent Certified Public Accountants, to the inclusion in this Form N-4 of their report on the financial statements of The Travelers Life and Annuity Company contained in Part B of this Registration Statement. 11. None. 12. None. 13. Schedule for computation of each performance quotation. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-73466, filed via Edgar on April 27, 1995.) 14. Representation concerning reliance upon No-Action Letter IP-6-88. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 15(a). Powers of Attorney authorizing Jay S. Fishman or Ernest J. Wright as signatory for Donald T. DeCarlo and Christine B. Mead. 15(b). Powers of Attorney authorizing Jay S. Fishman or Ernest J. Wright as a signatory for Michael A. Carpenter, Robert I. Lipp, Charles O. Prince III, Marc P. Weill, and Irwin R. Ettinger. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 27. Financial Data Schedule. (Incorporated herein by reference to Exhibit 27 to Form 10-Q for the quarter ended June 30, 1995, File No. 33-58131, filed on August 14, 1995.)
Item 25. Directors and Officers of the Depositor --------------------------------------- Name and Principal Positions and Offices Business Address with Depositor ---------------- ------------------------ Michael A. Carpenter* Director and Chairman Robert I. Lipp* Director Jay S. Fishman* Director and Chief Financial Officer Charles O. Prince, III** Director Marc P. Weill** Director and Chief Investment Officer Irwin R. Ettinger** Director Donald T. DeCarlo* Director, General Counsel and Secretary Robert E. Evans* President Stuart Baritz* Senior Vice President Jay S. Benet* Senior Vice President Russell H. Johnson Senior Vice President Christine B. Mead* Vice President and Controller William H. White* Vice President and Treasurer Ian R. Stuart* Vice President and Financial Officer Kathleen M. D'Auria* Vice President Elizabeth C. Georgakopoulous* Vice President Charles N. Vest* Vice President and Actuary Robert Hamilton* Second Vice President Bethann C. Maas* Second Vice President Kyle Rotherie* Second Vice President Ernest J. Wright* Assistant Secretary Kathleen A. McGah* Assistant Secretary Principal Business Address: * The Travelers Life and Annuity Company ** Travelers Group Inc. One Tower Square 388 Greenwich Street Hartford, Connecticut 06183 New York, New York 10013 Item 26. Persons Controlled by or Under Common Control with the Depositor. OWNERSHIP OF THE TRAVELERS LIFE AND ANNUITY COMPANY
Company State of Organization Ownership Principal Business ------- --------------------- --------- ------------------ The Travelers Inc. Delaware Publicly Held -------------- Associated Madison Companies Inc. Delaware 100.00 -------------- The Travelers Insurance Group, Inc. Connecticut 100.00 -------------- The Travelers Insurance Company Connecticut 100.00 Insurance The Travelers Life and Annuity Company Connecticut 100.00 Insurance
------------------------------------------------------------------------------- PERSONS CONTROLLED BY OR UNDER COMMON CONTROL WITH THE TRAVELERS LIFE AND ANNUITY COMPANY
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ AC Health Ventures, Inc. Delaware 100.00 Inactive AMCO Biotech, Inc. Delaware 100.00 Inactive Associated Madison Companies, Inc. Delaware 100.00 Holding company. American National Life Insurance (T & C), Ltd. Turks and Caicos Islands 100.00 Insurance ERISA Corporation New York 100.00 Inactive Mid-America Insurance Services, Inc. Georgia 100.00 Third party administrator National Marketing Corporation Pennsylvania 100.00 Inactive PFS Custodial Services, Inc. Georgia 100.00 General partner PFS Distributors, Inc. Georgia 100.00 General partner PFS Investments Inc. Georgia 100.00 Broker dealer PFS Services, Inc. Georgia 100.00 General partner
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ Primerica Finance Corporation Delaware 100.00 Holding company American Capital Custodial Services, Inc. Delaware 100.00 Limited partner American Capital T.A., Inc. Delaware 100.00 Joint venture partner Primerica Financial Services Home Mortgages, Inc. Georgia 100.00 Mortgage loan broker Primerica Financial Services, Inc. Nevada 100.00 General agency Primerica Financial Services Agency of New York, Inc. New York 100.00 General agency licensing Primerica Financial Services Insurance Marketing of Connecticut, Inc. Connecticut 100.00 General agency licensing Primerica Financial Services Insurance Marketing of Idaho, Inc. Idaho 100.00 General agency licensing Primerica Financial Services Insurance Marketing of Nevada, Inc. Nevada 100.00 General agency licensing Primerica Financial Services Insurance Marketing of Pennsylvania, Inc. Pennsylvania 100.00 General agency licensing Primerica Financial Services Insurance Marketing of the Virgin Islands, Inc. United States Virgin Islands 100.00 General agency licensing Primerica Financial Services Insurance Marketing of Wyoming, Inc. Wyoming 100.00 General agency licensing Primerica Financial Services Insurance Marketing, Inc. Delaware 100.00 General agency licensing Primerica Financial Services of Alabama, Inc. Alabama 100.00 General agency licensing Primerica Financial Services of New Mexico, Inc. New Mexico 100.00 General agency licensing Primerica Insurance Agency of Massachusetts, Inc. Massachusetts 100.00 General agency licensing Primerica Insurance Marketing Services of Puerto Rico, Inc. Puerto Rico 100.00 Insurance agency Primerica Insurance Services of Louisiana, Inc. Louisiana 100.00 General agency licensing Primerica Insurance Services of Maryland, Inc. Maryland 100.00 General agency licensing Primerica Services, Inc. Georgia 100.00 Print operations RCM Acquisition Inc. Delaware 100.00 Investments SCN Acquisitions Company Delaware 100.00 Investments SL&H Reinsurance, Ltd. Turks and Caicos Islands 100.00 Reinsurance Southwest Service Agreements, Inc. North Carolina 100.00 Warranty/service agreements Southwest Warranty Corporation Florida 100.00 Extended automobile warranty The Travelers Insurance Group Inc. Connecticut 100.00 Holding company Harbour Associates I, Inc. Delaware 100.00 Real estate holding Deer Run II, Inc. Delaware 100.00 Real estate holding Net & Twine II Corporation Delaware 100.00 Real estate holding KP Properties Corporation Massachusetts 100.00 Real estate
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ KPI 85, Inc. Massachusetts 100.00 Real estate KRA Advisers Corporation Massachusetts 100.00 Real estate KRP Corporation Massachusetts 100.00 Real estate La Metropole S.A. Belgium 98.83 P-C insurance/reinsurance Principal Financial Associates, Inc. 100.00 Inactive Winthrop Financial Group, Inc. 100.00 Leasing company. The Plaza Corporation Connecticut 100.00 Holding company Joseph A. Wynne Agency California 100.00 Inactive The Copeland Companies New Jersey 100.00 Holding company American Odyssey Funds Management, Inc. New Jersey 100.00 Investment advisor American Odyssey Funds, Inc. Maryland 100.00 Investment management Copeland Administrative Services, Inc. New Jersey 100.00 Administrative services Copeland Associates, Inc. Delaware 100.00 Fixed/variable annuities Copeland Associates Agency of Ohio, Inc. Ohio 99.00 Fixed/variable annuities Copeland Associates of Alabama, Inc. Alabama 100.00 Fixed/variable annuities Copeland Associates of Montana, Inc. Montana 100.00 Fixed/variable annuities Copeland Benefits Management Company New Jersey 51.00 Investment marketing Copeland Equities, Inc. New Jersey 100.00 Fixed/variable annuities H.C. Copeland Associates, Inc. of Massachusetts Massachusetts 100.00 Fixed annuities Copeland Financial Services, Inc. New Jersey 100.00 Investment advisory services. Copeland Healthcare Services, Inc. New Jersey 100.00 Life insurance marketing H.C. Copeland and Associates, Inc. of Texas Texas 100.00 Fixed/variable annuities The Parker Realty and Insurance Agency, Inc. Vermont 57.98 Real estate Travelers General Agency of Hawaii, Inc. Hawaii 100.00 Insurance agency The Prospect Company Delaware 100.00 Investments 89th & York Avenue Corporation New York 100.00 Real estate 979 Third Avenue Corporation Delaware 100.00 Real estate Meadow Lane, Inc. Georgia 100.00 Real estate development Panther Valley, Inc. New Jersey 100.00 Real estate management Prospect Management Services Company Delaware 100.00 Real estate management
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ The Travelers Asset Funding Corporation Connecticut 100.00 Investment adviser Travelers Capital Funding Corporation Connecticut 100.00 Furniture/equipment The Travelers Corporation of Bermuda Limited Bermuda 99.99 Pensions The Travelers Indemnity Company Connecticut 100.00 P-C insurance Commercial Insurance Resources, Inc. Delaware 100.00 Holding company Gulf Insurance Company Missouri 100.00 P-C insurance Atlantic Insurance Company Texas 100.00 P-C insurance Gulf Risk Services, Inc. Delaware 100.00 Claims/risk management Gulf Underwriters Insurance Company North Carolina 100.00 P-C ins/surplus lines The Travelers Indemnity Company of Missouri Missouri 100.00 P-C insurance Select Insurance Company Texas 100.00 P-C insurance Countersignature Agency, Inc. Florida 100.00 Countersign ins policies First Trenton Indemnity Company New Jersey 100.00 P-C insurance Laramia Insurance Agency, Inc. North Carolina 100.00 Flood insurance Lynch, Ryan & Associates, Inc. Massachusetts 100.00 Cost containment The Charter Oak Fire Insurance Company Connecticut 100.00 P-C insurance VIPortfolio Agency, Inc. Delaware 100.00 Insurance agency The Phoenix Insurance Company Connecticut 100.00 P-C insurance Constitution State Service Company Montana 100.00 Service company The Travelers Indemnity Company of America Georgia 100.00 P-C insurance The Travelers Indemnity Company of Connecticut Connecticut 100.00 Insurance The Travelers Indemnity Company of Illinois Illinois 100.00 P-C insurance The Premier Insurance Company of Massachusetts Massachusetts 100.00 Insurance The Travelers Home and Marine Insurance Company Indiana 100.00 P-C insurance The Travelers Lloyds Insurance Company Texas 100.00 Non-life insurance TI Home Mortgage Brokerage, Inc. Delaware 100.00 Mortgage brokerage services TravCo Insurance Company Indiana 100.00 P-C insurance Travelers Medical Management Services Inc. Delaware 100.00 Managed care The Travelers Insurance Company Connecticut 100.00 Insurance Delaware Windtree Realty Corporation Delaware 100.00 Real estate holdings
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ Market Funding Corporation I Delaware 100.00 Real estate management Market Funding Corporation II Delaware 100.00 Real estate management Red Oak Plaza Holding Company, Inc. Delaware 100.00 Inactive The Travelers Life and Annuity Company Connecticut 100.00 Life insurance Three Parkway Inc. - I Pennsylvania 100.00 Investment real estate Three Parkway Inc. - II Pennsylvania 100.00 Investment real estate Three Parkway Inc. - III Pennsylvania 100.00 Investment real estate Travelers Insurance Holdings Inc. Georgia 100.00 Holding company AC RE, Ltd. Bermuda 100.00 Reinsurance American Financial Life Insurance Company Texas 100.00 Insurance Transport Life Insurance Company Texas 100.00 Insurance Continental Life Insurance Company Texas 100.00 Insurance Primerica Life Insurance Company Massachusetts 100.00 Life insurance National Benefit Life Insurance Company New York 100.00 Insurance Primerica Financial Services (Canada) Ltd. Canada 100.00 Holding company PFSL Investments Canada Ltd. Canada 100.00 Mutual fund dealer Primerica Financial Services Ltd. Canada 82.82 General agent Primerica Life Insurance Company of Canada Canada 100.00 Life insurance The Travelers Insurance Corporation Proprietary Limited Australia 100.00 Inactive The Travelers Marine Corporation California 100.00 General insurance brokerage The Travelers Realty Investment Company Connecticut 100.00 Real estate investment advisor AdVision, Inc. Connecticut 100.00 Advertising agency Constitution Plaza, Inc. Connecticut 100.00 Real estate brokerage Travelers Asset Management International Corporation New York 100.00 Investment adviser Travelers Canada Corporation Canada 100.00 Inactive Tower Square Securities, Inc. Connecticut 100.00 Broker dealer Travelers Mortgage Securities Corporation Delaware 100.00 Collateralized obligations Travelers of Ireland Limited Ireland 99.90 Data processing Travelers Specialty Property Casualty Company, Inc. Connecticut 100.00 Insurance management CCC Holdings, Inc. Delaware 100.00 Holding company
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ Commercial Credit Company Delaware 100.00 Holding company. American Health and Life Insurance Company Maryland 100.00 LH&A Insurance Brookstone Insurance Company Vermont 100.00 Insurance managers CC Finance Company, Inc. New York 100.00 Consumer lending CC Financial Services, Inc. Hawaii 100.00 Financial services CCC Fairways, Inc. Delaware 100.00 Investment company City Loan Financial Services, Inc. Ohio 100.00 Consumer finance Commercial Credit Banking Corporation Oregon 100.00 Consumer finance Commercial Credit Consumer Services, Inc. Minnesota 100.00 Consumer finance Commercial Credit Corporation Alabama 100.00 Consumer finance Commercial Credit Corporation California 100.00 Consumer finance Commercial Credit Corporation Iowa 100.00 Consumer finance Commercial Credit Corporation Kentucky 100.00 Consumer finance Certified Insurance Agency, Inc. Kentucky 100.00 Insurance agency Commercial Credit Investment, Inc. Kentucky 100.00 Investment company National Life Insurance Agency of Kentucky, Inc. Kentucky 100.00 Insurance agency Union Casualty Insurance Agency, Inc. Kentucky 100.00 Insurance agency Commercial Credit Corporation Maryland 100.00 Consumer finance Action Data Services, Inc. Missouri 100.00 Data processing Commercial Credit Plan, Incorporated Oklahoma 100.00 Consumer finance Commercial Credit Corporation New Jersey 100.00 Consumer finance Commercial Credit Corporation New York 100.00 Consumer finance Commercial Credit Corporation South Carolina 100.00 Consumer finance Commercial Credit Corporation West Virginia 100.00 Consumer finance Commercial Credit Corporation NC North Carolina 100.00 Consumer finance Commercial Credit Europe, Inc. Delaware 100.00 Inactive Commercial Credit Far East Inc. Delaware 100.00 Inactive Commercial Credit Insurance Services, Inc. Maryland 100.00 Insurance broker Commercial Credit Insurance Agency (P&C) of Mississippi, Inc. Mississippi 100.00 Insurance agency Commercial Credit Insurance Agency of Alabama, Inc. Alabama 100.00 Insurance agency
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ Commercial Credit Insurance Agency of Kentucky, Inc. Kentucky 100.00 Insurance agency Commercial Credit Insurance Agency of Massachusetts, Inc. Massachusetts 100.00 Insurance agency Commercial Credit Insurance Agency of Nevada, Inc. Nevada 100.00 Credit LH&A, P-C insurance Commercial Credit Insurance Agency of New Mexico, Inc. New Mexico 100.00 Insurance agency/Broker Commercial Credit Insurance Agency of Ohio, Inc. Ohio 100.00 Insurance agency/broker Commercial Credit International, Inc. Delaware 100.00 Holding company Commercial Credit International Banking Corporation Oregon 100.00 International lending Commercial Credit Corporation CCC Limited Canada 100.00 Second mortgage loans Commercial Credit Services do Brazil Ltda. Brazil 99.00 Inactive Commercial Credit Services Belgium S.A. Belgium 100.00 Inactive Commercial Credit Services Israel Limited Israel 100.00 Equipment leasing Industrial Leasing Services Limited Israel 99.71 Equipment leasing Comlease Ltd. Israel 99.99 Equipment leasing Commercial Credit Limited Delaware 100.00 Inactive Commercial Credit Loan, Inc. New York 100.00 Consumer finance Commercial Credit Loans, Inc. Delaware 100.00 Consumer finance Commercial Credit Loans, Inc. Ohio 100.00 Consumer finance Commercial Credit Loans, Inc. Virginia 100.00 Consumer finance Commercial Credit Management Corporation Maryland 100.00 Intercompany services Commercial Credit Plan Incorporated Tennessee 100.00 Consumer finance Commercial Credit Plan Incorporated Utah 100.00 Consumer finance Commercial Credit Plan Incorporated of Georgetown Delaware 100.00 Consumer finance Commercial Credit Plan Industrial Loan Company Virginia 100.00 Consumer finance Commercial Credit Plan, Incorporated Colorado 100.00 Consumer finance Commercial Credit Plan, Incorporated Delaware 100.00 Consumer finance Commercial Credit Plan, Incorporated Georgia 100.00 Consumer finance Commercial Credit Plan, Incorporated Missouri 100.00 Consumer finance Commercial Credit Securities, Inc. Delaware 100.00 Broker dealer DeAlessandro & Associates, Inc. Delaware 100.00 Insurance consulting Park Tower Holdings, Inc. Delaware 100.00 Holding company
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ CC Retail Services, Inc. Delaware 100.00 Leasing, financing Troy Textiles, Inc. Delaware 100.00 Factoring. Company is inactive. COMCRES, Inc. Delaware 100.00 Inactive Commercial Credit Development Corporation Delaware 100.00 Direct loan Myers Park Properties, Inc. Delaware 100.00 Inactive Penn Re, Inc. North Carolina 100.00 Management company Plympton Concrete Products, Inc. Delaware 100.00 Inactive Resource Deployment, Inc. Texas 100.00 Management company The Travelers Bank Delaware 100.00 Banking services The Travelers Bank USA Delaware 100.00 Credit card bank Travelers Home Equity, Inc. North Carolina 100.00 Financial services CC Consumer Services of Alabama, Inc. Alabama 100.00 Financial services Commercial Credit Plan Consumer Discount Company Pennsylvania 100.00 Financial services CC Home Lenders Financial, Inc. Georgia 100.00 Financial services CC Home Lenders, Inc. Ohio 100.00 Financial services Commercial Credit Corporation Texas 100.00 Consumer finance Commercial Credit Financial of Kentucky, Inc. Kentucky 100.00 Consumer finance Commercial Credit Financial of West Virginia, Inc. West Virginia 100.00 Consumer finance Commercial Credit Services of Kentucky, Inc. Kentucky 100.00 Financial services. Travelers Home Equity Services, Inc. North Carolina 100.00 Financial services Verochris Corporation Delaware 100.00 Joint venture company AMC Aircraft Corp. Delaware 100.00 Aviation Triton Insurance Company Missouri 100.00 P-C insurance World Service Life Insurance Company Colorado 100.00 Life insurance D.I.R.E.C.T. Resources, Inc. Delaware 100.00 Fraud/subrogation recovery Greenwich Street Capital Partners, Inc. Delaware 100.00 Investments Greenwich Street Investments, Inc. Delaware 100.00 Investments Greenwich Street Capital Partners Offshore Delaware 100.00 Investments Holdings, Inc. Margco Holdings, Inc. Delaware 100.00 Holding company Berg Associates New Jersey 100.00 Inactive
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ Berg Enterprises Realty, Inc. New York 100.00 Inactive Dublin Escrow, Inc. California 100.00 Inactive M.K.L. Realty Corporation New Jersey 66.67 Holding company MFC Holdings, Inc. Delaware 100.00 Inactive MRC Holdings, Inc. Delaware 100.00 Real estate The Berg Agency, Inc. 100.00 Inactive Mirasure Insurance Company, Ltd. Bermuda 100.00 Inactive Intermediate Holdings Inc. Delaware 100.00 Holding company Pacific Basin Investments Ltd. Delaware 100.00 Inactive Primerica Corporation Wyoming 100.00 Inactive Primerica, Inc. Delaware 100.00 Name saver RCM Capital Trust Company California 100.00 Trust company Smith Barney Corporate Trust Company 100.00 Trust company Smith Barney Holdings Inc. Delaware 100.00 Holding company Mutual Management Corp. New York 100.00 Inactive Smith Barney Asset Management Co., Ltd. Japan 100.00 Investment management R-H Sports Enterprises Inc Georgia 100.00 Sports representation SB Cayman Holdings I Inc. Delaware 100.00 Holding company SB Cayman Holdings II Inc. Delaware 100.00 Holding company SBS Software Inc. Delaware 100.00 Computer licensing Smith Barney (Delaware) Inc. Delaware 100.00 Holding company 1345 Media Corp. Delaware 100.00 Holding company Americas Avenue Corporation Delaware 100.00 Inactive Corporate Realty Advisors, Inc. Delaware 100.00 Realty trust adviser CRA Acquisition Corp. Delaware 100.00 Inactive IPO Holdings Inc. Delaware 100.00 Holding company Institutional Property Owners, Inc. IV Delaware 100.00 Leaseback transactions Institutional Property Owners, Inc. V Delaware 100.00 Investments Institutional Property Owners, Inc. VI Delaware 100.00 General partner Institutional Property Owners, Inc. VII Delaware 100.00 Never activated
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ MLA 50 Corporation Delaware 100.00 Limited partner MLA GP Corporation Delaware 100.00 General partner Municipal Markets Advisors Incorporated Delaware 100.00 Public finance SBF Corp. Delaware 100.00 Merchant banking investments Smith Barney Acquisition Corporation Delaware 100.00 Offshore fund adviser Smith Barney Commercial Corp. Delaware 100.00 Commercial credit Smith Barney Funding Holding Corp. Delaware 100.00 Inactive Smith Barney Global Capital Management, Inc. Delaware 100.00 Investment management Smith Barney Investment, Inc. Delaware 100.00 Inactive Smith Barney Offshore, Inc. Delaware 100.00 Decathlon Fund advisor Decathlon Offshore Limited Cayman Islands 100.00 Commodity fund Smith Barney Pension Advisors Corp. Delaware 100.00 Inactive Smith Barney Realty Advisors, Inc. Delaware 100.00 Inactive Smith Barney Realty, Inc. Delaware 100.00 Investments Smith Barney Risk Investors, Inc. Delaware 100.00 Investments Smith Barney Venture Corp. Delaware 100.00 Investments First Century Company 100.00 Holding company First Century Management Company 100.00 Investment adviser Smith Barney Asia Inc. Delaware 100.00 Investment banking Smith Barney Asset Management Group (Asia) Pte. Ltd. Singapore 100.00 Asset management Smith Barney Canada Inc. Canada 100.00 Investment dealer Smith Barney Capital Services Inc. Delaware 100.00 Derivative product transactions Smith Barney Cayman Islands, Ltd. Cayman Islands 100.00 Securities trading Smith Barney Commercial Corporation Asia Limited Hong Kong 99.00 Commodities trading Smith Barney Europe Holdings, Ltd. United Kingdom 100.00 Holding corp. Smith Barney Europe, Ltd. United Kingdom 100.00 Securities brokerage Smith Barney Shearson Futures, Ltd. United Kingdom 100.00 Inactive Smith Barney Futures Management Inc. Delaware 100.00 Commodities pool operator Harbourer Fund, Ltd. Bahama Islands 100.00 Commodity pool Smith Barney Offshore Fund Ltd. 100.00 Commodity pool
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ Smith Barney Shearson Overview Fund PLC Dublin 100.00 Commodity fund Smith Barney Inc. Delaware 100.00 Broker dealer SBHU Life Agency, Inc. Delaware 100.00 Insurance brokerage Robinson-Humphrey Insurance Services Inc. Georgia 100.00 Insurance brokerage Robinson-Humphrey Insurance Services of Alabama, Inc. Alabama 100.00 Insurance brokerage SBHU Life & Health Agency, Inc. Delaware 100.00 Insurance brokerage SBHU Life Agency of Arizona, Inc. Arizona 100.00 Insurance brokerage SBHU Life Agency of Indiana, Inc. Indiana 100.00 Insurance brokerage SBHU Life Agency of Utah, Inc. Utah 100.00 Insurance brokerage SBHU Life Insurance Agency of Massachusetts, Inc. Massachusetts 100.00 Insurance brokerage SBS Insurance Agency of Hawaii, Inc. Hawaii 100.00 Insurance brokerage SBS Insurance Agency of Idaho, Inc. Idaho 100.00 Insurance brokerage SBS Insurance Agency of Maine, Inc. Maine 100.00 Insurance brokerage SBS Insurance Agency of Montana, Inc. Montana 100.00 Insurance brokerage SBS Insurance Agency of Nevada, Inc. Nevada 100.00 Insurance brokerage SBS Insurance Agency of North Carolina, Inc. North Carolina 100.00 Insurance brokerage SBS Insurance Agency of Ohio, Inc. Ohio 100.00 Insurance brokerage SBS Insurance Agency of South Dakota, Inc. South Dakota 100.00 Insurance brokerage SBS Insurance Agency of Wyoming, Inc. Wyoming 100.00 Insurance brokerage SBS Insurance Brokerage Agency of Arkansas, Inc. Arkansas 100.00 Insurance brokerage SBS Insurance Brokers of Arizona, Inc. Arizona 100.00 Insurance brokerage SBS Insurance Brokers of Kentucky, Inc. Kentucky 100.00 Insurance brokerage SBS Insurance Brokers of Louisiana, Inc. Louisiana 100.00 Insurance brokerage SBS Insurance Brokers of New Hampshire, Inc. New Hampshire 100.00 Insurance brokerage SBS Insurance Brokers of North Dakota, Inc. North Dakota 100.00 Insurance brokerage SBS Life Insurance Agency of Puerto Rico, Inc. Puerto Rico 100.00 Insurance brokerage SLB Insurance Agency of Maryland, Inc. Maryland 100.00 Insurance brokerage Smith Barney Life Agency Inc. Louisiana 100.00 Insurance brokerage Smith Barney (France) S.A. France 100.00 Commodities trading Smith Barney (Hong Kong) Limited Hong Kong 100.00 Broker dealer
% of Voting Securities Owned Directly State of or Indirectly by Organization The Travelers, Inc. Principal Business ------------ ------------------- ------------------ Smith Barney (Netherlands) Inc. Delaware 100.00 Broker dealer Smith Barney International Incorporated Oregon 100.00 Broker dealer Smith Barney Pacific Holdings, Inc. British Virgin Islands 100.00 Holding company Smith Barney (Asia) Limited Hong Kong 100.00 Broker dealer Smith Barney (Singapore) Pte Ltd Singapore 100.00 Commodities Smith Barney Securities Pte Ltd Singapore 100.00 Securities brokerage HG Asia (Singapore) Pte. Ltd. Singapore 100.00 Inactive The Robinson-Humphrey Company, Inc. Delaware 100.00 Broker dealer Smith Barney Mortgage Brokers Inc. Delaware 100.00 Mortgage brokerage Smith Barney Mortgage Capital Corp. Delaware 100.00 Mortgage-backed securities Smith Barney Mortgage Capital Group, Inc. Delaware 100.00 Mortgage trading Smith Barney Mutual Funds Management Inc. Delaware 100.00 Investment management Smith Barney Strategy Advisers Inc. Delaware 100.00 Investment management E.C. Tactical Management S.A. Luxembourg 100.00 Investment management Smith Barney Private Trust Company (Cayman) Limited Cayman Islands 100.00 Trust company Greenwich (Cayman) I Limited Cayman Islands 100.00 Corporate services Greenwich (Cayman) II Limited Cayman Islands 100.00 Corporate services Greenwich (Cayman) III Limited Cayman Islands 100.00 Corporate services Smith Barney S.A. France 100.00 Commodities trading Smith Barney Asset Management France SA France 100.00 Com. based asset management Smith Barney Shearson (Chile) Corredora de Seguro Chile 100.00 Insurance brokerage Limitada Smith Barney Shearson (Ireland) Limited Ireland 100.00 Fund management Structured Mortgage Securities Corporation Delaware 100.00 Mortgage-backed securities The Travelers Investment Management Company Connecticut 100.00 Investment advisor Smith Barney Private Trust Company New York 100.00 Trust company. Smith Barney Private Trust Company of Florida Florida 100.00 Trust company Tinmet Corporation Delaware 100.00 Inactive Travelers Services Inc. Delaware 100.00 Holding company TRV Employees Investments, Inc. Delaware 100.00 Investments
Item 27. Number of Contract Owners ------------------------- As of September 1, 1995, there were no contract owners of variable annuity contracts funded through the Registrant. Item 28. Indemnification --------------- Section 33-320a of the Connecticut General Statutes ("C.G.S.") regarding indemnification of directors and officers of Connecticut corporations provides in general that Connecticut corporations shall indemnify their officers, directors and certain other defined individuals against judgments, fines, penalties, amounts paid in settlement and reasonable expenses actually incurred in connection with proceedings against the corporation. The corporation's obligation to provide such indemnification generally does not apply unless (1) the individual is successful on the merits in the defense of any such proceeding; or (2) a determination is made (by persons specified in the statute) that the individual acted in good faith and in the best interests of the corporation; or (3) the court, upon application by the individual, determines in view of all of the circumstances that such person is fairly and reasonably entitled to be indemnified, and then for such amount as the court shall determine. With respect to proceedings brought by or in the right of the corporation, the statute provides that the corporation shall indemnify its officers, directors and certain other defined individuals, against reasonable expenses actually incurred by them in connection with such proceedings, subject to certain limitations. C.G.S. Section 33-320a provides an exclusive remedy; a Connecticut corporation cannot indemnify a director or officer to an extent either greater or less than that authorized by the statute, e.g., pursuant to its certificate of incorporation, by-laws, or any separate contractual arrangement. However, the statute does specifically authorize a corporation to procure indemnification insurance to provide greater indemnification rights. The premiums for such insurance may be shared with the insured individuals on an agreed basis. Travelers Group Inc. also provides liability insurance for its directors and officers and the directors and officers of its subsidiaries, including the Depositor. This insurance provides for coverage against loss from claims made against directors and officers in their capacity as such, including, subject to certain exceptions, liabilities under the Federal securities laws. Rule 484 Undertaking -------------------- Insofar as indemnification for liability arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liability (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. Item 29. Principal Underwriter --------------------- (a) Tower Square Securities, Inc. One Tower Square Hartford, Connecticut 06183 Tower Square Securities, Inc. also serves as principal underwriter for the following : The Travelers Growth and Income Stock Account for Variable Annuities The Travelers Quality Bond Account for Variable Annuities The Travelers Money Market Account for Variable Annuities The Travelers Timed Growth and Income Stock Account for Variable Annuities The Travelers Timed Short-Term Bond Account for Variable Annuities The Travelers Timed Aggressive Stock Account for Variable Annuities The Travelers Timed Bond Account for Variable Annuities The Travelers Fund U for Variable Annuities The Travelers Fund UL for Variable Life Insurance The Travelers Variable Life Insurance Separate Account One The Travelers Variable Life Insurance Separate Account Three The Travelers Fund BD for Variable Annuities The Travelers Fund VA for Variable Annuities (b) Name and Principal Positions and Offices Business Address * With Underwriter ------------------ ---------------- Russell H. Johnson Chairman and Chief Executive Officer Donald R. Munson, Jr. Director, President and Chief Operating Officer George C. Kokulis Director Gregory C. MacDonald Director and Assistant Secretary Kathleen A. Preston Director and Executive Vice President Robert C. Hamilton Director and Senior Vice President Thomas P. Tooley Vice President, Life Marketing George A. Ryan Vice President Jeffrey A. Barker Regional Vice President Walter Melnik, Jr. Regional Vice President Raymond W. Sheridan Regional Vice President William F. Scully, III Treasurer William H. White Assistant Treasurer Charles B. Chamberlain Assistant Treasurer George M. Quaggin Assistant Treasurer Kathleen A. McGah General Counsel and Secretary Alison K. George Director of Compliance and Assistant Corporate Secretary * Principal business address: One Tower Square, Hartford, Connecticut 06183 (c) Not applicable. Item 30. Location of Accounts and Records -------------------------------- (1) The Travelers Life and Annuity Company One Tower Square Hartford, Connecticut 06183 Item 31. Management Services ------------------- Not applicable. Item 32. Undertakings ------------ The undersigned Registrant hereby undertakes: (a) To file a post-effective amendment to this registration statement as frequently as is necessary to ensure that the audited financial statements in the registration statement are never more than sixteen months old for so long as payments under the variable annuity contracts may be accepted; (b) To include either (1) as part of any application to purchase a contract offered by the prospectus, a space that an applicant can check to request a Statement of Additional Information, or (2) a post card or similar written communication affixed to or included in the prospectus that the applicant can remove to send for a Statement of Additional Information; (c) To deliver any Statement of Additional Information and any financial statements required to be made available under this Form N-4 promptly upon written or oral request; and (d) To include in any registration statement filed in connection with a contract used as a funding vehicle for retirement plans meeting the requirements of Section 403(b) of the Internal Revenue Code, a representation that the Registrant is relying upon No-Action Letter IP-6-88 issued to the American Council of Life Insurance. SIGNATURES ---------- As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has caused this Pre-Effective Amendment to this Registration Statement to be signed on its behalf, in the City of Hartford, State of Connecticut, on this 11th day of September, 1995. THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES By: The Travelers Life and Annuity Company By: /s/ JAY S. FISHMAN ----------------------- Jay S. Fishman Chief Financial Officer SIGNATURES ---------- As required by the Securities Act of 1933 and the Investment Company Act of 1940, the Registrant has caused this Pre-Effective Amendment to this Registration Statement to be signed on its behalf, in the City of Hartford, State of Connecticut, on this 11th day of September, 1995. THE TRAVELERS LIFE AND ANNUITY COMPANY (Depositor) By: /s/JAY S. FISHMAN ----------------------- Jay S. Fishman Chief Financial Officer Pursuant to the requirements of the Securities Act of 1933, this Pre-Effective amendment to this Registration Statement has been signed below by the following persons in the capacities indicated on September 11, 1995. *MICHAEL A. CARPENTER Chairman of the Board --------------------- and principal executive officer (Michael A. Carpenter) *ROBERT I. LIPP Director --------------- (Robert I. Lipp) /s/JAY S. FISHMAN Director and Chief Financial Officer ----------------- (Jay S. Fishman) *CHARLES O. PRINCE III Director ---------------------- (Charles O. Prince III) *MARC P. Weill Director -------------- (Marc P. Weill) *IRWIN R. ETTINGER Director ------------------ (Irwin R. Ettinger) *DONALD T. DeCARLO Director ------------------ (Donald T. DeCarlo) /s/ CHRISTINE B. MEAD Vice President and Controller --------------------- (Christine B. Mead) *By: /s/Jay S. Fishman --------------------- Jay S. Fishman, Attorney-in-Fact EXHIBIT INDEX -------------
Exhibit No. Description Method of Filing ------- ----------- ---------------- 1. Resolution of The Travelers Life and Annuity Company Board of Directors authorizing the establishment of the Registrant. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 3. Distribution and Management Agreement. Electronically 4. Variable Annuity Contracts. (Incorporated herein reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 5. Application. Electronically 6(a). Charter of The Travelers Life and Annuity Company, as amended on April 10, 1990. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 6(b). By-Laws of The Travelers Life and Annuity Company, as amended on October 20, 1994. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 9. Opinion of Counsel as to the legality of securities being registered by Registrant. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 10(a). Consent of Coopers & Lybrand L.L.P., Independent Certified Electronically Public Accountants. 10(b). Consent of KPMG Peat Marwick LLP, Independent Electronically Certified Public Accountants. 13. Schedule for computation of each performance quotation. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-73466, filed via Edgar on April 27, 1995.) 14. Representation concerning reliance upon No-Action Letter IP-6-88. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.)
15. Power of Attorney authorizing Jay S. Fishman or Electronically Ernest J. Wright as signatory for Donald T. DeCarlo and Christine B. Mead. 15. Powers of Attorney authorizing Jay S. Fishman or Ernest J. Wright as signatory for Michael A. Carpenter, Robert I. Lipp, Charles O. Prince III, Marc P. Weill, and Irwin R. Ettinger. (Incorporated herein by reference to Registration Statement on Form N-4, File No. 33-58131, filed via Edgar on March 17, 1995.) 27. Financial Data Schedule. (Incorporated herein by reference to Exhibit 27 to Form 10-Q for the quarter ended June 30, 1995, File No. 33-58131, filed on August 14, 1995.)
EX-3 2 DISTRIBUTION & MANAGEMENT EXHIBIT 3 DISTRIBUTION AND MANAGEMENT AGREEMENT DISTRIBUTION AND MANAGEMENT AGREEMENT made this 8th day of September, 1995, by and among The Travelers Life and Annuity Company, a Connecticut stock insurance company (hereinafter the "Company"), Tower Square Securities, Inc., a Connecticut general business corporation (hereinafter "TSSI"), and The Travelers Fund BD II for Variable Annuities (hereinafter "Fund BD II"), a separate account of the Company established by its President and Chief Executive Officer pursuant to a resolution of the Company's Board of Directors on February 22, 1995, pursuant to Section 38-433 of the Connecticut General Statutes. 1. The Company hereby agrees to provide all administrative services relative to variable annuity contracts and revisions thereof (hereinafter "Contracts") sold by the Company, the net proceeds of which or reserves for which are maintained in Fund BD II. 2. TSSI hereby agrees to perform all sales functions relative to the Contracts. The Company agrees to reimburse TSSI for commissions paid, other sales expenses and properly allocable overhead expenses incurred in performance thereof. 3. For providing the administrative services referred to in paragraph 1 above and reimbursing TSSI for the sales functions referred to in paragraph 2 above, the Company will receive the deductions for sales and administrative expenses which are stated in the Contracts. 4. The Company will furnish at its own expense and without cost to Fund BD II the administrative expenses of Fund BD II, including but not limited to: (a) office space in the offices of the Company or in such other place as may be agreed upon from time to time, and all necessary office facilities and equipment; (b) necessary personnel for managing the affairs of Fund BD II, including clerical, bookkeeping, accounting and other office personnel; (c) all information and services, including legal services, required in connection with registering and qualifying Fund BD II or the Contracts with federal and state regulatory authorities, preparation of registration statements and prospectuses, including amendments and revisions thereto, and annual, semi-annual and periodic reports, notices and proxy solicitation materials furnished to variable annuity Contract Owners or regulatory authorities, including the costs of printing and mailing such items; (d) the costs of preparing, printing, and mailing all sales literature; (e) all registration, filing and other fees in connection with compliance requirements of federal and state regulatory authorities; -1- (f) the charges and expenses of any custodian or depository appointed by Fund BD II for the safekeeping of its cash, securities and other property; and (g) the charges and expenses of independent accountants retained by Fund BD II. 5. The services of the Company and TSSI to Fund BD II hereunder are not to be deemed exclusive and the Company and TSSI shall be free to render similar services to others so long as its services hereunder are not impaired or interfered with thereby. 6. The Company agrees to guarantee that the annuity payments will not be affected by mortality experience (under Contracts the reserves for which are invested in Fund BD II) and as such assumes the risks (a) that the actuarial estimate of mortality rates among annuitants may prove erroneous and that reserves set up on the basis of such estimates will not be sufficient to meet the Company's variable annuity payment obligations, and (b) that the charges for services and expenses of the Company set forth in the Contracts may not prove sufficient to cover its actual expenses. For providing these mortality and expense risk guarantees, the Company will receive from Fund BD II an amount per valuation period of Fund BD II, as provided from time to time. 7. This Agreement will be effective on the date executed, and will remain effective until terminated by any party upon sixty (60) days notice; provided, however, that this agreement will terminate automatically in the event of its assignment by any of the parties hereto. 8. Notwithstanding termination of this Agreement, the Company shall continue to provide administrative services and mortality and expense risk guarantees provided for herein with respect to Contracts in effect on the date of termination, and the Company shall continue to receive the compensation provided under this Agreement. 9. This Agreement is subject to the provisions of the Investment Company Act of 1940, as amended, and the rules of the Securities and Exchange Commission. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be signed by their respective officials thereunto duly authorized and, in the case of the Company and TSSI, seals to be affixed as of the day and year first above written. THE TRAVELERS LIFE AND ANNUITY COMPANY (Seal) By: /s/ Michael A. Carpenter ------------------------------------------- Title: Chairman ---------------------------------------- ATTEST: /s/ Ernest J. Wright ---------------------------- Assistant Secretary -2- THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES By: /s/ Michael A. Carpenter ------------------------------------------- WITNESS: /s/ Ernest J. Wright ---------------------------- TOWER SQUARE SECURITIES, INC. By: /s/ Russell Johnson ------------------------------------------- Title: Chairman ----------------------------------------- ATTEST: (SEAL) /s/ Kathleen A. McGah --------------------------- Corporate Secretary -3- EX-5 3 VINTAGE APPLICATION TravelersInsurance Vintage A Member of TravelersGroup [LOGO APPEARS HERE] Application Annuity Investor Services * One Tower Square * Hartford, CT 06183-9061 -------------------------------------------------------------------------------- Owner -------------------------------------------------------------------------------- Name Address -------------------------------------------------------------------------------- Date of Birth -------------------------------------------------------------------------------- SS# Sex [_]M [_]F -------------------------------------------------------------------------------- U.S. Citizen [_]Y [_]N The Owner stated above will be used for all correspondence and tax reporting purposes -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- [_]Succeeding Owner [_] Joint Owner (check one, if any) Relationship to Owner -------------------------------------------------------------------------------- Name SS# Date of Birth -------------------------------------------------------------------------------- Annuitant (if different from owner) -------------------------------------------------------------------------------- Name SS# Date of Birth -------------------------------------------------------------------------------- Sex [_]M [_]F If no Annuitant is specified, the Owner stated above will be the Annuitant -------------------------------------------------------------------------------- Contingent Annuitant (if any) -------------------------------------------------------------------------------- Name Date of Birth -------------------------------------------------------------------------------- Beneficiary Information -------------------------------------------------------------------------------- Full Name Relationship to Owner Percent -------------------------------------------------------------------------------- % -------------------------------------------------------------------------------- % -------------------------------------------------------------------------------- Type of Plan Portfolio Allocation -------------------------------------------------------------------------------- [_]IRA Rollover [_]Nonqualified [_] Other __________________ Smith Barney Income & Growth % -------------------------------------------------------------------------------- Replacement Information AIM Capital Appreciation Portfolio % -------------------------------------------------------------------------------- Will the contract applied for Alliance Growth % replace any existing annuity ------------------------------------------- contract or life insurance policy? American Capital Enterprise % ------------------------------------------- [_]Y [_]N If Yes, specify company Smith Barney International Equity % name and contract # in ------------------------------------------- Remarks section below. Smith Barney Pacific Basin % -------------------------------------------------------------------------------- Remarks: TBC Managed Income % ------------------------------------------- Putnam Diversified Income % ------------------------------------------- GT Global Strategic Income % ------------------------------------------- Smith Barney High Income % ------------------------------------------- MFS Total Return % ------------------------------------------- Smith Barney Money Market % ------------------------------------------- Travelers Fixed Account % ------------------------------------------- Smith Barney Total Return Portfolio % ------------------------------------------- Total 100.000 % -------------------------------------------------------------------------------- Acknowledgement Initial Purchase Payment $ -------------------------------------------------------------------------------- I understand the contract will take effect when the first purchase payment is received and the application is approved in the Home Office of The Travelers Life and Annuity Company. All payments and values provided by the contract applied for, when based on investment experience of a separate account, are variable and are not guaranteed as to a fixed dollar. No agent is authorized to make changes to the contract or application. I acknowledge receipt of a current prospectus. In Non-Qualified situations where the owner is a trust, I/we hereby certify the trust is solely for the benefit of a natural person and not a Deferred Compensation Plan. _________________________________ ____________________________________ Contract Owner's Signature Signed at (City, State) _________________________________ ____________________________________ Joint Contract Owner's Signature Date Completed I acknowledge that all data representations and signatures recorded by me or in my presence in response to my inquiry and request and all such representations and signatures are accurate and valid to the best of my knowledge and belief. Will the contract applied for replace any existing annuity contract or life insurance policy? [_]Y [_]N _________________________________ __________ _____________________ Licensed Agent's Signature Date Soc Sec # _________________________________ ____________________________________ Print Name Agent's License # -------------------------------------------------------------------------------- EX-10.A 4 CONSENT OF INDEPENDENT ACCOUNTANTS: COOPERS & LYBRAND EXHIBIT 10(a) CONSENT OF INDEPENDENT ACCOUNTANTS We consent to the inclusion in this Pre-Effective Amendment No. 1 of this Registration Statement on Form N-4 (File No. 33-58131) of our reports on the statements of operations and retained earnings and cash flows for the years ended December 31, 1993 and 1992 of The Travelers Life and Annuity Company (the "Company") both dated September 16, 1994, which include an explanatory paragraph regarding the change in the methods of accounting for postretirement benefits other pensions, income taxes and foreclosed assets in 1992, on our audits of the financial statements of the Company. COOPERS & LYBRAND L.L.P. /s/ Coopers & Lybrand, L.L.P. Hartford, Connecticut September 8, 1995 EX-10.B 5 CONSENT OF INDEPENDENT ACCOUNTANTS: KPMG PEAT MARWICK EXHIBIT 10(b) The Board of Directors The Travelers Life and Annuity Company: We consent to the inclusion in this Pre-Effective Amendment No. 1 to the registration statement (No. 33-58131) on Form N-4, filed for The Travelers Fund BD II for Variable Annuities, of our report on the financial statements of The Travelers Life and Annuity Company, dated January 17, 1995. Our report refers to a change in accounting for investments in accordance with the provisions of Statement of Financial Accounting Standards No. 115, "Accounting for Certain Investments in Debt and Equity Securities." /s/ KPMG Peat Marwick LLP KPMG PEAT MARWICK LLP Hartford, Connecticut September 8, 1995 EX-15 6 POWERS OF ATTORNEY EXHIBIT 15 THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: That I, Donald T. DeCarlo of Douglaston, New York, director of The Travelers Life and Annuity Company (hereinafter the "Company"), do hereby make, constitute and appoint JAY S. FISHMAN, Director and Chief Financial Officer of said Company, and ERNEST J. WRIGHT, Assistant Secretary of said Company, or either one of them acting alone, my true and lawful attorney-in-fact, for me, and in my name, place and stead, to sign registration statements on behalf of said Company on Form N-4 or other appropriate form under the Securities Act of 1933 and the Investment Company Act of 1940 for The Travelers Fund BD II for Variable Annuities, a separate account of the Company dedicated specifically to the funding of variable annuity contracts to be offered by the Company, and further, to sign any and all amendments thereto, including post-effective amendments, that may be filed by the Company on behalf of said registrant. IN WITNESS WHEREOF, I have hereunto set my hand this 28th day of April, 1995. /s/Donald T. DeCarlo Director The Travelers Life and Annuity Company THE TRAVELERS FUND BD II FOR VARIABLE ANNUITIES POWER OF ATTORNEY ----------------- KNOW ALL MEN BY THESE PRESENTS: That I, Christine B. Mead of Avon, Connecticut, Vice President and Controller of The Travelers Life and Annuity Company (hereinafter the "Company"), do hereby make, constitute and appoint JAY S. FISHMAN, Director and Chief Financial Officer of said Company, and ERNEST J. WRIGHT, Assistant Secretary of said Company, or either one of them acting alone, my true and lawful attorney-in-fact, for me, and in my name, place and stead, to sign registration statements on behalf of said Company on Form N-4 or other appropriate form under the Securities Act of 1933 and the Investment Company Act of 1940 for The Travelers Fund BD II for Variable Annuities, a separate account of the Company dedicated specifically to the funding of variable annuity contracts to be offered by the Company, and further, to sign any and all amendments thereto, including post-effective amendments, that may be filed by the Company on behalf of said registrant. IN WITNESS WHEREOF, I have hereunto set my hand this 1st day of June, 1995. /s/Christine B. Mead Vice President and Controller The Travelers Life and Annuity Company