Travelers 2003 Annual Report Download - page 152

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150
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
16. RELATED PARTY TRANSACTIONS, Continued
At December 31, 2003 and 2002, Travelers had $14.6 million and $60.2 million, respectively, of securities
pledged as collateral to Citigroup to support a letter of credit facility for certain of Travelers surety customers.
In the ordinary course of business, Travelers purchases and sells securities through formerly affiliated broker-
dealers. These transactions are conducted on an arm’s-length basis. Commissions are not paid for the purchase
and sale of debt securities. Citigroup was the underwriter of the offerings and received underwriting discounts
and commissions of approximately $90.0 million.
Travelers participates in reinsurance agreements with TIC, a former affiliate. See note 6.
Travelers purchases annuities from former affiliates to settle certain claims. Through 2004, Travelers has agreed
to use TIC as the most preferred provider of annuities, as long as Citigroup maintains competitive ratings and its
products are competitively priced. Reinsurance recoverables at December 31, 2003 and 2002 included
$760.6 million and $810.4 million, respectively, related to these annuities.
17. NONCASH FINANCING AND INVESTING ACTIVITIES
There were no significant noncash financing or investing activities for the year ended December 31, 2003. In
2002, TPC paid dividends of $5.095 billion to Citigroup in the form of notes payable. These notes were all
repaid during 2002. On October 3, 2001, the capital stock of Associates Insurance Company, with a net book
value of $356.5 million, was contributed to Travelers.