content: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 10-Q
  
                [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                  For the quarterly period ended September 30, 1999
                                                 ------------------
  
                                         OR
  
                [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                    for the transition period from _____ to _____
  
                            Commission file number 1-8323
                                                   ------
  
                                  CIGNA Corporation
               ------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
                   Delaware                         06-1059331
      ---------------------------------         -------------------
        (State or other jurisdiction            (I.R.S. Employer
      of incorporation or organization)         Identification No.)
  
                        One Liberty Place, 1650 Market Street
                          Philadelphia, Pennsylvania 19192
                 ---------------------------------------------------
                 (Address of principal executive offices) (Zip Code)
  
          Registrant's telephone number, including area code (215) 761-1000
                                                             --------------
  
                                   Not Applicable
                 ---------------------------------------------------
                (Former name, former address and former fiscal year,
                           if changed since last report)
  
       Indicate  by check mark  whether the  registrant  (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
  1934  during  the  preceding  12 months  (or for such  shorter  period  that the
  registrant was required to file such reports),  and (2) has been subject to such
  filing requirements for the past 90 days.
                                                 Yes _x_   No ___
  
  As of September 30, 1999,  185,952,253  shares of the issuer's Common Stock were
  outstanding.
  <PAGE>
                                  CIGNA CORPORATION
  
  
                                        INDEX
  
  
                                                                          Page No.
                                                                          --------
  
  PART I.  FINANCIAL INFORMATION
  
           Item 1.  Financial Statements
                    Consolidated Income Statements                           1
                    Consolidated Balance Sheets                              2
                    Consolidated Statements of Comprehensive
                      Income and Changes in Shareholders' Equity             3
                    Consolidated Statements of Cash  Flows                   4
                    Notes to Financial Statements                            5
  
           Item 2.  Management's Discussion and Analysis
                      of Financial Condition and Results of Operations      11
  
  PART II. OTHER INFORMATION
  
           Item 6.  Exhibits and Reports on Form 8-K                        21
  
  SIGNATURE                                                                 22
  
  EXHIBIT INDEX                                                             23
  
  As used  herein,  "CIGNA"  refers  to one or more of CIGNA  Corporation  and its
  consolidated subsidiaries.
  <PAGE>
  Part I.  FINANCIAL  INFORMATION
  Item 1.  Financial Statements
  -----------------------------
  
  CIGNA  CORPORATION
  CONSOLIDATED INCOME STATEMENTS
  (In millions, except per share amounts)
  <TABLE>
  <CAPTION>
                                                               Three Months Ended         Nine Months Ended
                                                                 September 30,              September 30,
                                                             1999           1998         1999          1998
  ------------------------------------------------------------------------------------------------------------
  <S>                                                      <C>           <C>           <C>           <C>
  REVENUES
  Premiums and fees                                        $  3,781      $  3,344      $ 11,092      $  9,914
  Net investment income                                         762           766         2,217         2,344
  Other revenues                                                157           150           561           785
  Realized investment gains (losses)                            (11)           42            13           121
                                                           --------      --------      --------      --------
  
      Total revenues                                          4,689         4,302        13,883        13,164
                                                           --------      --------      --------      --------
  
  BENEFITS, LOSSES AND EXPENSES
  Benefits, losses and settlement expenses                    3,142         2,879         9,280         8,655
  Policy acquisition expenses                                    63            58           188           148
  Other operating expenses                                    1,547           953         3,641         2,881
                                                           --------      --------      --------      --------
  
      Total benefits, losses and expenses                     4,752         3,890        13,109        11,684
                                                           --------      --------      --------      --------
  
  INCOME (LOSS) FROM CONTINUING OPERATIONS
      BEFORE INCOME TAXES                                       (63)          412           774         1,480
                                                           --------      --------      --------      --------
  
  Income taxes (benefits):
      Current                                                   159           132           485           666
      Deferred                                                  (90)           16          (118)         (138)
                                                           --------      --------      --------      --------
          Total taxes                                            69           148           367           528
                                                           --------      --------      --------      --------
  
  INCOME (LOSS) FROM CONTINUING OPERATIONS                     (132)          264           407           952
                                                           --------      --------      --------      --------
  DISCONTINUED OPERATIONS
  Income (loss) from operations, net of taxes                    --           (13)          (28)          102
  Gain on sale, net of taxes                                  1,194            --         1,194            --
                                                           --------      --------      --------      --------
      Income (loss) from discontinued operations              1,194           (13)        1,166           102
                                                           --------      --------      --------      --------
  INCOME BEFORE CUMULATIVE
       EFFECT OF ACCOUNTING CHANGE                            1,062           251         1,573         1,054
  
  Cumulative effect of accounting change, net of taxes           --            --           (91)           --
                                                           --------      --------      --------      --------
  
  NET INCOME                                               $  1,062      $    251      $  1,482      $  1,054
  -------------------------------------------------------=====================================================
  BASIC EARNINGS PER SHARE
  Income (loss) from continuing operations                 $  (0.68)     $   1.26      $   2.03      $   4.47
  Income (loss) from discontinued operations                   6.12         (0.06)         5.81          0.48
  ------------------------------------------------------------------------------------------------------------
  Income before cumulative effect of accounting change         5.44          1.20          7.84          4.95
  Cumulative effect of accounting change, net of taxes           --            --         (0.45)           --
  ------------------------------------------------------------------------------------------------------------
  Net income                                               $   5.44      $   1.20      $   7.39      $   4.95
  -------------------------------------------------------=====================================================
  DILUTED EARNINGS PER SHARE
  Income (loss) from continuing operations                 $  (0.68)     $   1.25      $   2.00      $   4.42
  Income (loss) from discontinued operations                   6.12         (0.06)         5.73          0.48
  ------------------------------------------------------------------------------------------------------------
  Income before cumulative effect of accounting change         5.44          1.19          7.73          4.90
  Cumulative effect of accounting change, net of taxes           --            --         (0.45)           --
  ------------------------------------------------------------------------------------------------------------
  Net income                                               $   5.44      $   1.19      $   7.28      $   4.90
  -------------------------------------------------------=====================================================
  DIVIDENDS DECLARED PER SHARE                             $   0.30      $   0.29      $   0.90      $   0.86
  -------------------------------------------------------=====================================================
  </TABLE>
  
  The Notes to Financial Statements are an integral part of these statements.
  
                                         1
  <PAGE>
  CIGNA  CORPORATION
  CONSOLIDATED  BALANCE  SHEETS
  (In millions, except per share amounts)
  <TABLE>
  <CAPTION>
                                                                                        As of                   As of
                                                                                    September 30,           December 31,
                                                                                        1999                    1998
  ---------------------------------------------------------------------------------------------------------------------
  <S>                                                                                 <C>                     <C>
  ASSETS
  Investments:
     Fixed maturities, at fair value (amortized cost, $23,188; $22,663)               $ 23,392                $ 24,270
     Equity securities, at fair value (cost, $271; $249)                                   515                     477
     Mortgage loans                                                                      9,830                   9,599
     Policy loans                                                                        3,339                   6,185
     Real estate                                                                           794                     733
     Other long-term investments                                                           164                     170
     Short-term investments                                                              2,197                     242
                                                                                      --------                --------
         Total investments                                                              40,231                  41,676
  Cash and cash equivalents                                                              1,851                   1,986
  Accrued investment income                                                                623                     617
  Premiums, accounts and notes receivable                                                2,423                   2,481
  Reinsurance recoverables                                                               6,795                   6,666
  Deferred policy acquisition costs                                                        850                     730
  Property and equipment                                                                   707                     701
  Deferred income taxes                                                                  1,309                   1,034
  Other assets                                                                             506                     750
  Goodwill and other intangibles                                                         1,974                   2,090
  Separate account assets                                                               35,504                  34,808
  Net assets of discontinued operations                                                     --                   2,351
  ---------------------------------------------------------------------------------------------------------------------
          Total assets                                                                $ 92,773                $ 95,890
  -----------------------------------------------------------------------------------==================================
  LIABILITIES
  Contractholder deposit funds                                                        $ 27,353                $ 30,607
  Unpaid claims and claim expenses                                                       3,860                   3,392
  Future policy benefits                                                                12,377                  12,510
  Unearned premiums                                                                        540                     589
                                                                                      --------                --------
           Total insurance and contractholder liabilities                               44,130                  47,098
  Accounts payable, accrued expenses and other liabilities                               4,756                   4,358
  Current income taxes                                                                     196                      27
  Short-term debt                                                                           68                     272
  Long-term debt                                                                         1,360                   1,428
  Separate account liabilities                                                          35,087                  34,430
  ---------------------------------------------------------------------------------------------------------------------
           Total liabilities                                                            85,597                  87,613
  ---------------------------------------------------------------------------------------------------------------------
  
  CONTINGENCIES - NOTE 9
  
  SHAREHOLDERS' EQUITY
  Common stock (par value, $0.25; shares issued, 267; 265)                                  67                      66
  Additional paid-in capital                                                             2,821                   2,719
  Net unrealized appreciation, fixed maturities                            $     12                $    750
  Net unrealized appreciation, equity securities                                150                     206
  Net translation of foreign currencies                                           6                    (114)
                                                                           --------                --------
     Accumulated other comprehensive income                                                168                     842
  Retained earnings                                                                      8,049                   6,746
  Less treasury stock, at cost                                                          (3,929)                 (2,096)
  ---------------------------------------------------------------------------------------------------------------------
           Total shareholders' equity                                                    7,176                   8,277
  ---------------------------------------------------------------------------------------------------------------------
           Total liabilities and shareholders' equity                                 $ 92,773                $ 95,890
  -----------------------------------------------------------------------------------==================================
  SHAREHOLDERS' EQUITY PER SHARE                                                      $  38.59                $  40.25
  -----------------------------------------------------------------------------------==================================
  </TABLE>
  
  The Notes to Financial Statements are an integral part of these statements.
  
                                         2
  <PAGE>
  CIGNA  CORPORATION
  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND CHANGES IN
     SHAREHOLDERS' EQUITY
  (In millions)
  <TABLE>
  <CAPTION>
  Three Months Ended September 30,                                             1999                     1998
  --------------------------------------------------------------------------------------------------------------------
                                                                       Compre-      Share-      Compre-       Share-
                                                                      hensive     holders'      hensive     holders'
                                                                       Income       Equity       Income       Equity
  --------------------------------------------------------------------------------------------------------------------
  <S>                                                                 <C>          <C>          <C>          <C>
  Common stock                                                                     $    67                   $    66
                                                                                   ---------                 ---------
  Additional paid-in capital, July 1                                                 2,814                     2,704
    Issuance of common stock for employee benefits plans                                 7                         6
                                                                                   ---------                 ---------
  Additional paid-in capital, September 30                                           2,821                     2,710
                                                                                   ---------                 ---------
  Accumulated other comprehensive income, July 1                                       215                       835
    Net unrealized appreciation (depreciation), fixed maturities      $  (148)        (148)     $   119          119
    Net unrealized depreciation, equity securities                       (128)        (128)         (85)         (85)
                                                                      ---------                 ---------
        Net unrealized appreciation (depreciation) on securities         (276)                       34
    Net translation of foreign currencies                                 229          229          (27)         (27)
                                                                      ---------                 ---------
            Other comprehensive income (loss)                             (47)                        7
                                                                                   ---------                 ---------
  Accumulated other comprehensive income, September 30                                 168                       842
                                                                                   ---------                 ---------
  Retained earnings, July 1                                                          7,045                     6,376
    Net income                                                          1,062        1,062          251          251
    Common dividends declared                                                          (58)                      (60)
                                                                                   ---------                 ---------
  Retained earnings, September 30                                                    8,049                     6,567
                                                                                   ---------                 ---------
  Treasury stock, July 1                                                            (2,800)                   (1,641)
    Repurchase of common stock                                                      (1,128)                     (385)
    Other treasury stock transactions, net                                              (1)                       (3)
                                                                                   ---------                 ---------
  Treasury stock, September 30                                                      (3,929)                   (2,029)
  --------------------------------------------------------------------------------------------------------------------
  TOTAL COMPREHENSIVE INCOME AND SHAREHOLDERS' EQUITY                 $ 1,015      $ 7,176      $   258      $ 8,156
  ------------------------------------------------------------------==================================================
  
  
  Nine Months Ended September 30,
  --------------------------------------------------------------------------------------------------------------------
  
  Common stock, January 1                                                          $    66                   $    66
    Issuance of common stock for employee benefits plans                                 1                        --
                                                                                   ---------                 ---------
  Common stock, September 30                                                            67                        66
                                                                                   ---------                 ---------
  Additional paid-in capital, January 1                                              2,719                     2,655
    Issuance of common stock for employee benefits plans                               102                        55
                                                                                   ---------                 ---------
  Additional paid-in capital, September 30                                           2,821                     2,710
                                                                                   ---------                 ---------
  Accumulated other comprehensive income, January 1                                    842                       758
    Net unrealized appreciation (depreciation), fixed maturities      $  (738)        (738)     $   112          112
    Net unrealized depreciation, equity securities                        (56)         (56)          (5)          (5)
                                                                      ---------                 ---------
        Net unrealized appreciation (depreciation) on securities         (794)                      107
    Net translation of foreign currencies                                 120          120          (23)         (23)
                                                                      ---------                 ---------
            Other comprehensive income (loss)                            (674)                       84
                                                                                   ---------                 ---------
  Accumulated other comprehensive income, September 30                                 168                       842
                                                                                   ---------                 ---------
  Retained earnings, January 1                                                       6,746                     5,696
    Net income                                                          1,482        1,482        1,054        1,054
    Common dividends declared                                                         (179)                     (183)
                                                                                   ---------                 ---------
  Retained earnings, September 30                                                    8,049                     6,567
                                                                                   ---------                 ---------
  Treasury stock, January 1                                                         (2,096)                   (1,243)
    Repurchase of common stock                                                      (1,786)                     (756)
    Other treasury stock transactions, net                                             (47)                      (30)
                                                                                   ---------                 ---------
  Treasury stock, September 30                                                      (3,929)                   (2,029)
  --------------------------------------------------------------------------------------------------------------------
  TOTAL COMPREHENSIVE INCOME AND SHAREHOLDERS' EQUITY                 $   808      $ 7,176      $ 1,138      $ 8,156
  ------------------------------------------------------------------==================================================
  </TABLE>
  
  The Notes to Financial Statements are an integral part of these statements.
  
                                         3
  <PAGE>
  CIGNA  CORPORATION
  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
  (In millions)
  
  <TABLE>
  <CAPTION>
                                                                                                Nine Months Ended September 30,
                                                                                                      1999           1998
  ------------------------------------------------------------------------------------------------------------------------------
  <S>                                                                                               <C>           <C>
  CASH FLOWS FROM OPERATING ACTIVITIES
      Income from continuing operations                                                             $   407       $   952
      Adjustments to reconcile income from continuing operations
          to net cash provided by operating activities:
              Insurance liabilities                                                                     660           696
              Reinsurance recoverables                                                                  (82)          (69)
              Deferred policy acquisition costs                                                        (101)         (113)
              Premiums, accounts and notes receivable                                                  (348)         (207)
              Accounts payable, accrued expenses, other liabilities and
                  current income taxes                                                                  263           (26)
              Deferred income taxes                                                                    (118)         (138)
              Realized investment gains                                                                 (13)         (121)
              Depreciation and goodwill amortization                                                    172           173
              Gain on sale of businesses (excluding discontinued operations)                           (139)         (393)
              Charge attributable to Brazilian investments                                              478            --
              Other, net                                                                               (154)         (293)
                                                                                                    ---------     ---------
                  Net cash provided by operating activities of continuing operations                  1,025           461
                                                                                                    ---------     ---------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
      Proceeds from investments sold:
          Fixed maturities                                                                            1,889         2,599
          Equity securities                                                                              81           122
          Mortgage loans                                                                                481           824
          Other                                                                                       1,236           993
      Investment maturities and repayments:
          Fixed maturities                                                                            2,090         2,406
          Mortgage loans                                                                                276           416
      Investments purchased:
          Fixed maturities                                                                           (4,353)       (4,876)
          Equity securities                                                                             (83)          (55)
          Mortgage loans                                                                             (1,080)       (1,292)
          Other                                                                                      (2,782)       (2,028)
      Proceeds on sale of businesses                                                                  3,557           998
      Other, net                                                                                       (207)         (160)
                                                                                                    ---------     ---------
                  Net cash provided by (used in) investing activities of continuing operations        1,105           (53)
                                                                                                    ---------     ---------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
      Deposits and interest credited to contractholder deposit funds                                  5,708         4,648
      Withdrawals and benefit payments from contractholder deposit funds                             (6,103)       (4,892)
      Net change in short-term debt                                                                    (256)         (372)
      Repayment of long-term debt                                                                       (16)          (99)
      Repurchase of common stock                                                                     (1,596)         (754)
      Issuance of common stock                                                                           39            20
      Common dividends paid                                                                            (180)         (184)
                                                                                                    ---------     ---------
                  Net cash used in financing activities of continuing operations                     (2,404)       (1,633)
                                                                                                    ---------     ---------
  Effect of foreign currency rate changes on cash and cash equivalents                                    1            (8)
  Net cash (to) from discontinued operations                                                            138          (143)
  -------------------------------------------------------------------------------------------------------------------------
  Net decrease in cash and cash equivalents                                                            (135)       (1,376)
  Cash and cash equivalents, beginning of period                                                      1,986         1,832
  -------------------------------------------------------------------------------------------------------------------------
  
  Cash and cash equivalents, end of period                                                          $ 1,851       $   456
  ------------------------------------------------------------------------------------------------=========================
  
  Supplemental Disclosure of Cash Information:
      Income taxes paid, net of refunds                                                             $   346       $   626
      Interest paid                                                                                 $    82       $    81
  -------------------------------------------------------------------------------------------------------------------------
  </TABLE>
  
  The Notes to Financial Statements are an integral part of these statements.
  
                                         4
  <PAGE>
  CIGNA CORPORATION
  NOTES TO FINANCIAL STATEMENTS
  
  NOTE 1 - BASIS OF PRESENTATION
  
  The consolidated  financial statements include the accounts of CIGNA Corporation
  and  all  significant   subsidiaries  (CIGNA).   These  consolidated   financial
  statements have been prepared in conformity with generally  accepted  accounting
  principles.  Certain  reclassifications  have been made to conform with the 1999
  presentation.
  
  The interim  financial  statements  are  unaudited  but include all  adjustments
  (consisting  of normal  recurring  adjustments)  necessary,  in the  opinion  of
  management, for a fair statement of financial position and results of operations
  for the period reported.
  
  The preparation of interim financial  statements  necessarily  relies heavily on
  estimates.  This and  certain  other  factors,  such as the  seasonal  nature of
  portions of CIGNA's business as well as competitive and other market conditions,
  call for  caution  in  estimating  results  for the full year  based on  interim
  results of operations.
  
  NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS
  
  CIGNA adopted  Statement of Position  (SOP) 97-3,  "Accounting  by Insurance and
  Other Enterprises for Insurance-Related  Assessments" as of January 1, 1999. SOP
  97-3, issued by the American Institute of Certified Public Accountants  (AICPA),
  provides guidance on the recognition and measurement of liabilities for guaranty
  fund and  other  insurance-related  assessments  such as  workers'  compensation
  second  injury  funds,  medical  risk pools and  charges  related  to  operating
  expenses of state regulatory  bodies.  The cumulative effect of adopting the SOP
  was a reduction  of net income of $91 million  ($140  million  pre-tax),  and is
  primarily  related to the property and casualty  business,  which CIGNA sold and
  reports as discontinued operations.
  
  In 1999, CIGNA adopted SOP 98-1,  "Accounting for the Costs of Computer Software
  Developed or Obtained for Internal Use." SOP 98-1,  issued by the AICPA in 1998,
  specifies the types of costs that must be  capitalized  and  amortized  over the
  software's expected useful life and the types of costs which must be immediately
  recognized  as  expense.  Implementation  of this  pronouncement  did not have a
  material effect on results of operations, liquidity or financial condition.
  
  In 1998, the Financial  Accounting Standards Board issued Statement of Financial
  Accounting Standards (SFAS) No. 133, "Accounting for Derivative  Instruments and
  Hedging  Activities."  SFAS No. 133 requires that derivatives be reported on the
  balance  sheet at fair value.  Changes in fair value are to be recognized in net
  income or, for  derivatives  that are hedging market risk related to future cash
  flows, in the accumulated  other  comprehensive  income section of shareholders'
  equity.  Implementation  is  required  by the first  quarter  of 2001,  with the
  cumulative  effect of adoption  reflected  in net income and  accumulated  other
  comprehensive  income,  as  appropriate.  CIGNA has not determined the effect or
  timing of implementation of this pronouncement.
  
  NOTE 3 - ACQUISITIONS AND DISPOSITIONS
  
  On July 2, 1999, CIGNA sold its domestic and international property and casualty
  business to ACE Limited for cash proceeds of $3.45  billion.  CIGNA reports this
  business as discontinued  operations and has reclassified prior period financial
  information.  CIGNA recognized the after-tax gain on sale of approximately  $1.2
  billion in discontinued operations in the third quarter.
  
                                         5
  
  <PAGE>
  Summarized financial data for the discontinued operations is outlined below:
  
  <TABLE>
  <CAPTION>
  ------------------------------------------------------------------------------------------------
                                                         Three Months             Nine Months
                                                            Ended                   Ended
                                                        September 30,            September 30,
  (In millions)                                       1999        1998         1999         1998
  ------------------------------------------------------------------------------------------------
  <S>                                               <C>           <C>        <C>         <C>
  Income Statement Data
  Revenues                                             $--        $942       $1,863       $2,846
                                                    ----------------------------------------------
  Income (loss) before income taxes (benefits)         $--        $(20)        $(48)        $151
  Income taxes (benefits)                               --          (7)         (20)          49
                                                    ----------------------------------------------
  Income (loss) from operations                         --         (13)         (28)         102
  Gain on sale, net of taxes of $1,152               1,194          --        1,194           --
  ------------------------------------------------------------------------------------------------
  Income (loss) from discontinued operations        $1,194        $(13)      $1,166         $102
  -------------------------------------------------===============================================
  </TABLE>
  
  ------------------------------------------
                               December 31,
  (In millions)                        1998
  ------------------------------------------
  Balance Sheet Data
  Invested assets                 $ 9,031
  Reinsurance recoverables          6,470
  Other assets                      6,240
                             --------------
  Total assets                     21,741
                             --------------
  Insurance liabilities            16,494
  Other liabilities                 2,896
                             --------------
  Total liabilities                19,390
  -----------------------------------------
  Net assets*                     $ 2,351
  ---------------------------==============
  
  The gain includes the  recognition  of after-tax  foreign  currency  translation
  losses of $139 million  (net of tax benefits of $80 million) and net  unrealized
  appreciation on securities of $163 million (net of taxes of $65 million).
  
  During the third  quarter of 1999,  CIGNA  completed  a review of its  Brazilian
  operations (including analyses of future estimated cash flows). These operations
  consist primarily of a health care operation and a managed health care business.
  As a result of the  review,  CIGNA  decided to  withdraw  from the  health  care
  operation but will continue to operate the managed  health care  business.  This
  review  resulted in an aggregate  after-tax  charge of $400 million.  The charge
  includes the recognition of after-tax foreign currency translation losses of $89
  million (net of a tax benefit of $48  million),  and  consists of the  following
  items:
  
  o    $305 million for the carrying value of the health care operation from which
       CIGNA is withdrawing,  certain loans  guaranteed by CIGNA,  and exit costs;
       and
  o    $95 million for impairment of other investments, primarily goodwill.
  
  CIGNA's withdrawal from the health care operation could be challenged. While the
  outcome of any regulatory or legal actions cannot be determined,  CIGNA does not
  expect  that such  actions  would  result in losses  material  to its results of
  operations, liquidity or financial condition.
  
  In  April  1999,  CIGNA  sold a 29%  interest  in its  Japanese  life  insurance
  operations  to Yasuda Fire & Marine  Insurance  Company Ltd.,  reducing  CIGNA's
  ownership interest to 61%. Proceeds of the sale were $105 million. The after-tax
  gain was $43  million  and is reported  in the  International  Life,  Health and
  Employee Benefits segment.
  
  As of January 1, 1998,  CIGNA sold its  individual  life  insurance  and annuity
  business to Lincoln National  Corporation for cash proceeds of $1.4 billion. The
  sale resulted in an after-tax gain of  approximately  $770 million of which $202
  million was recognized upon closing of the sale.  Since the principal  agreement
  to sell this  business is in the form of an indemnity  reinsurance  arrangement,
  the  remaining  gain was  deferred  and is  being  recognized  at the rate  that
  earnings from the business  sold would have been  expected to emerge,  primarily
  over fifteen years on a declining  basis.  CIGNA  recognized $15 million and $17
  million of the  deferred  gain in the third  quarters of 1999 and 1998,  and $46
  million and $50 million for the nine months ended  September  30, 1999 and 1998,
  respectively.
  
  CIGNA had other acquisitions and dispositions during the nine months of 1999 and
  1998, the effects of which were not material to the financial statements.
  
  --------
  *  Accumulated  other  comprehensive  income  associated  with the  discontinued
  operations  was $222 million as of December 31, 1998.
  
                                         6
  <PAGE>
  
  NOTE 4 - INVESTMENTS
  
  Realized Investment Gains and Losses
  
  Realized  gains and losses on investments  of continuing  operations,  excluding
  policyholder share, were as follows:
  
  -------------------------------------------------------------------------------
                                     Three Months                Nine Months
                                         Ended                      Ended
                                     September 30,              September 30,
  (In millions)                   1999          1998         1999          1998
  -------------------------------------------------------------------------------
  Fixed maturities                $(15)          $19          $(5)          $39
  Equity securities                  2             5           15            30
  Mortgage loans                    --             7           --            12
  Real Estate                       --             8            1            15
  Other                              2             3            2            25
                                -------------------------------------------------
                                   (11)           42           13           121
  Less income taxes
    (benefits)                      (3)           15            5            42
  -------------------------------------------------------------------------------
  Net realized investment
    gains (losses)                 $(8)          $27           $8           $79
  ------------------------------=================================================
  
  Fixed Maturities and Equity Securities
  
  Sales of  available-for-sale  fixed maturities and equity securities,  including
  policyholder share, for continuing operations were as follows:
  
  ----------------------------------------------------------------------------
                                 Three Months                 Nine Months
                                     Ended                       Ended
                                 September 30,              September 30,
  (In millions)                1999         1998         1999         1998
  ----------------------------------------------------------------------------
  Proceeds from sales          $610         $686       $1,970       $2,721
  Gross gains on sales           11           58           54          155
  Gross losses on sales         (16)          (1)         (24)         (42)
  ----------------------------------------------------------------------------
  
  The  components  of net  unrealized  appreciation  (depreciation)  on securities
  (including  securities of  discontinued  operations  and excluding  policyholder
  share) for the three and nine months ended September 30 were as follows:
  
  --------------------------------------------------------------------
  (In millions)                                      1999       1998
  --------------------------------------------------------------------
  Three months ended September 30,
  Unrealized appreciation (depreciation) on
    securities held, net of taxes (benefits) of
    $(68) and $26, respectively.                    $(121)       $32
  Less gains (losses) realized in net income,
    net of taxes of $60 in 1999.                      155         (2)
  --------------------------------------------------------------------
  Net unrealized appreciation (depreciation)        $(276)       $34
  ------------------------------------------------====================
  Nine months ended September 30,
  Unrealized appreciation (depreciation) on
    securities held, net of taxes (benefits) of
    $(312) and $135, respectively.                  $(575)      $251
  Less gains realized in net income, net of
    taxes of $94 and $78, respectively.               219        144
  --------------------------------------------------------------------
  Net unrealized appreciation (depreciation)        $(794)      $107
  ------------------------------------------------====================
  
                                         7
  <PAGE>
  NOTE 5 - EARNINGS PER SHARE
  
  Income and per share amounts reflect income (loss) from continuing operations.
  ------------------------------------------------------------------------------
                                                          Effect
  (Dollars in millions,                                       Of
  except per share amounts)                  Basic      Dilution        Diluted
  ------------------------------------------------------------------------------
  Three Months Ended September 30,
  ------------------------------------------------------------------------------
  1999
  ------------------------------------------------------------------------------
  Loss                                        $(132)           --        $(132)
  ----------------------------------------======================================
  Shares (in thousands):
  Weighted average                          195,137           --       195,137
  Options and restricted stock grants*                        --            --
  ------------------------------------------------------------------------------
  Total shares                              195,137           --       195,137
  ----------------------------------------======================================
  Loss per share                             $(0.68)           --       $(0.68)
  ----------------------------------------======================================
  1998
  ------------------------------------------------------------------------------
  Income                                       $264           --          $264
  ----------------------------------------======================================
  Shares (in thousands):
  Weighted average                          209,212           --       209,212
  Options and restricted stock grants                      2,300         2,300
  ------------------------------------------------------------------------------
  Total shares                              209,212        2,300       211,512
  ----------------------------------------======================================
  Earnings per share                          $1.26       $(0.01)        $1.25
  ----------------------------------------======================================
  
  Nine Months Ended September 30,
  ------------------------------------------------------------------------------
  1999
  ------------------------------------------------------------------------------
  Income                                       $407           --          $407
  ----------------------------------------======================================
  Shares (in thousands):
  Weighted average                          200,541           --       200,541
  Options and restricted stock grants                      2,933         2,933
  ------------------------------------------------------------------------------
  Total shares                              200,541        2,933       203,474
  ----------------------------------------======================================
  Earnings per share                          $2.03       $(0.03)        $2.00
  ----------------------------------------======================================
  1998
  ------------------------------------------------------------------------------
  Income                                       $952           --          $952
  ----------------------------------------======================================
  Shares (in thousands):
  Weighted average                          212,871           --       212,871
  Options and restricted stock grants                      2,376         2,376
  ------------------------------------------------------------------------------
  Total shares                              212,871        2,376       215,247
  ----------------------------------------======================================
  Earnings per share                          $4.47       $(0.05)        $4.42
  ----------------------------------------======================================
  
  Common  shares held as Treasury  shares were  80,809,495  and  58,498,295  as of
  September 30, 1999 and 1998, respectively.
  
  NOTE 6 - REINSURANCE RECOVERABLES
  
  In the normal  course of business,  CIGNA's  insurance  subsidiaries  enter into
  agreements  to assume  and cede  reinsurance  with  other  insurance  companies.
  Reinsurance  is ceded  primarily  to limit  losses from large  exposures  and to
  permit recovery of a portion of direct losses,  although ceded  reinsurance does
  not relieve the originating insurer of liability.
  
  In connection  with the sale of CIGNA's  individual  life  insurance and annuity
  business,  the  reinsurance  recoverable  from Lincoln  National  Corporation at
  September 30, 1999 was $6.1 billion.
  
  Failure of reinsurers to indemnify CIGNA, as a result of reinsurer  insolvencies
  and disputes, could result in losses. However, CIGNA does not expect charges for
  unrecoverable   reinsurance  to  have  a  material  effect  on  its  results  of
  operations, liquidity or financial condition.
  
  In CIGNA's  consolidated income statements,  premiums and fees were net of ceded
  premiums and benefits,  losses and  settlement  expenses were net of reinsurance
  recoveries as follows:
  
  -------------------------------------------------------------
                              Three Months       Nine Months
                                  Ended             Ended
                              September 30,     September 30,
  (In millions)               1999     1998     1999     1998
  -------------------------------------------------------------
  Ceded premiums:
  Individual life
    insurance and
    annuity business sold     $159     $139     $323     $360
  Other                        118       91      347      305
  -------------------------------------------------------------
  Total                       $277     $230     $670     $665
  --------------------------===================================
  Reinsurance recoveries:
  Individual life
    insurance and
    annuity business sold     $162     $118     $261     $236
  Other                        130       58      284      247
  -------------------------------------------------------------
  Total                       $292     $176     $545     $483
  --------------------------===================================
  
  ------------
  * Because of the loss from continuing  operations for the quarter, the number of
  shares used to compute  earnings per share does not reflect the dilution  caused
  by stock  options  and  restricted  stock  grants of  approximately  2.6 million
  shares.
  
                                         8
  
  <PAGE>
  
  NOTE 7 - SEGMENT INFORMATION
  
  Operating segments reflect CIGNA's internal reporting structure and are based on
  differences  in products,  except the  International  Life,  Health and Employee
  Benefits segment, which is based on geography.  CIGNA uses operating income (net
  income excluding after-tax realized investment results,  results of discontinued
  operations and, in 1999, the cumulative  effect of adopting SOP 97-3) to measure
  the financial results of its segments.  Summarized segment financial information
  was as follows:
  
  <TABLE>
  <CAPTION>
  ----------------------------------------------------------------------------------------
                                             Three Months                Nine Months
                                                 Ended                      Ended
                                             September 30,               September 30,
  (In millions)                           1999          1998          1999          1998
  ----------------------------------------------------------------------------------------
  <S>                                   <C>           <C>          <C>           <C>
  Premiums and fees
    and other revenues:
  Employee Health Care,
    Life and Disability Benefits        $3,288        $3,006        $9,643        $8,845
  Employee Retirement
    Benefits and Investment
    Services                                70            54           203           198
  International Life, Health
    and Employee Benefits                  409           300         1,274           887
  Other Operations                         213           164           654           848
  Corporate                                (42)          (30)         (121)          (79)
  ----------------------------------------------------------------------------------------
  Total                                 $3,938        $3,494       $11,653       $10,699
  -------------------------------------===================================================
  Income (loss) from continuing
    operations:
  Operating income (loss):
  Employee Health Care,
    Life and Disability  Benefits         $182          $159          $512          $433
  Employee Retirement
    Benefits and Investment
    Services                                66            63           196           184
  International Life, Health
    and Employee Benefits                 (397)           14          (350)           30
  Other Operations                          33            30           100           292
  Corporate                                 (8)          (29)          (59)          (66)
                                       ---------------------------------------------------
  Total operating income (loss)           (124)          237           399           873
  Realized investment gains
    (losses), net of taxes                  (8)           27             8            79
  ----------------------------------------------------------------------------------------
  Income (loss) from continuing
    operations                           $(132)         $264          $407          $952
  -------------------------------------===================================================
  </TABLE>
  
  
  NOTE 8 - COST REDUCTION INITIATIVES
  
  During  the third  quarter  of 1999,  CIGNA  adopted  a plan for cost  reduction
  initiatives  subsequent  to the  sale of the  property  and  casualty  business.
  Adoption of the plan  resulted in a pre-tax  charge of $15 million  ($10 million
  after-tax),  primarily for severance  expenses,  which was recorded in Corporate
  ($7 million after-tax) and the International  Life, Health and Employee Benefits
  segment  ($3  million  after-tax).   CIGNA  expects  to  substantially  complete
  implementation of this plan by mid-2000.
  
  NOTE 9 - CONTINGENCIES AND OTHER MATTERS
  
  Financial Guarantees
  
  CIGNA,  through its subsidiaries,  is contingently  liable for various financial
  guarantees  provided in the  ordinary  course of business.  For  example,  CIGNA
  guarantees  the  repayment of  industrial  revenue  bonds and a minimum level of
  benefits for certain separate account contracts. In addition,  CIGNA has entered
  into specialty life reinsurance  contracts that guarantee payments for specified
  unfavorable  changes in variable  annuity  account  values  based on  underlying
  mutual fund  investments if account holders expire or elect to receive  periodic
  income payments.
  
  Although the  ultimate  outcome of any loss  contingencies  arising from CIGNA's
  financial  guarantees  may  adversely  affect  results of  operations  in future
  periods,  they are not  expected  to have a material  adverse  effect on CIGNA's
  liquidity or financial condition.
  
                                         9
  
  <PAGE>
  
  Regulatory and Industry Developments
  
  CIGNA's  businesses  are  subject  to  a  changing  social,   economic,   legal,
  legislative and regulatory  environment.  Some of the more  significant  current
  issues that may affect CIGNA's businesses include:
  
  o    efforts to expand tort liability of health plans;
  o    proposed class action lawsuits targeting the health care industry's efforts
       to deliver quality care at affordable costs;
  o    initiatives to increase health care regulation; and
  o    initiatives  to  restrict   insurance   pricing  and  the   application  of
       underwriting standards.
  
  Pending  initiatives  to increase  health care  regulation  at the federal level
  include  "managed care reform" and "patients' bill of rights"  legislation.  The
  bill  that  recently  passed  the House of  Representatives  would  expand  tort
  liability  for health  plans and  change  the  practices  for  defining  medical
  necessity.  The corresponding bill that recently passed the Senate lacks similar
  provisions.  Given these differences  between the House and Senate bills and the
  general  uncertainty of the political  process,  it is not possible to determine
  what, if any, legislation will ultimately be enacted or what the effect on CIGNA
  of any such legislation would be.
  
  Several of CIGNA's health care industry  competitors  recently have had proposed
  class  action  lawsuits  filed  against  them  by  a  coalition  of  plaintiffs'
  attorneys.  CIGNA expects that similar lawsuits could be filed against it. Given
  that no such  lawsuits  are  currently  pending  against  CIGNA  and  given  the
  uncertainties  of  predicting  the outcome of  litigation  generally,  it is not
  possible to determine at this time what the ultimate effect, if any, on CIGNA of
  any such litigation would be.
  
  In 1998,  the National  Association  of Insurance  Commissioners  (NAIC) adopted
  risk-based capital guidelines for health maintenance organizations (HMOs). CIGNA
  expects its HMO subsidiaries to be adequately capitalized under these guidelines
  as they become effective in various jurisdictions in 1999.
  
  
  In 1998, the NAIC adopted standardized  statutory accounting  principles.  Since
  these  principles have not been adopted by most of the insurance  departments of
  various jurisdictions in which CIGNA's insurance subsidiaries are domiciled, the
  timing and effects of implementation have not yet been determined.
  
  The eventual  effect on CIGNA of the changing  environment  in which it operates
  remains uncertain.
  
  Litigation
  
  CIGNA is continuously  involved in numerous lawsuits arising, for the most part,
  in the ordinary course of the business of  administering  and insuring  employee
  benefits programs.  While the outcome of litigation cannot be determined,  CIGNA
  does not expect that litigation  currently  threatened or pending will result in
  losses that differ from  recorded  reserves by amounts that would be material to
  results of operations, liquidity or financial condition.
  
                                         10
  <PAGE>
  Item 2.       Management's Discussion and Analysis of
                Financial Condition and Results of Operations
  
  INTRODUCTION
  
  The following  discussion addresses the financial condition of CIGNA Corporation
  (CIGNA) as of  September  30, 1999,  compared  with  December 31, 1998,  and its
  results of operations for the quarter and nine months ended  September 30, 1999,
  compared  with the same periods  last year.  This  discussion  should be read in
  conjunction with  Management's  Discussion and Analysis included in CIGNA's 1998
  Annual  Report to  Shareholders  (pages 10 through  24),  to which the reader is
  directed for additional  information.  Due to the seasonality of certain aspects
  of CIGNA's business,  caution should be used in estimating  results for the full
  year based on interim results of operations.
  
  Acquisitions and Dispositions
  
  On July 2, 1999, CIGNA sold its domestic and international property and casualty
  business to ACE Limited for cash proceeds of $3.45  billion.  CIGNA reports this
  business as discontinued  operations and has reclassified prior period financial
  information.  CIGNA recognized the after-tax gain on sale of approximately  $1.2
  billion in discontinued operations in the third quarter.  CIGNA's priorities for
  use  of  capital,  including  proceeds  from  the  sale,  are  internal  growth,
  acquisitions, and share repurchases.
  
  In the third  quarter of 1999,  CIGNA  recognized  an  after-tax  charge of $400
  million attributable to certain Brazilian  investments.  See page 15 for further
  discussion.
  
  In  April  1999,  CIGNA  sold a 29%  interest  in its  Japanese  life  insurance
  operations  to Yasuda Fire & Marine  Insurance  Company Ltd.,  reducing  CIGNA's
  ownership interest to 61%. Proceeds of the sale were $105 million. The after-tax
  gain was $43  million  and is reported  in the  International  Life,  Health and
  Employee Benefits segment.
  
  As of January 1, 1998,  CIGNA sold its  individual  life  insurance  and annuity
  business for cash  proceeds of $1.4  billion.  The sale resulted in an after-tax
  gain of  approximately  $770 million of which $202 million was  recognized  upon
  closing of the sale.  Since the principal  agreement to sell this business is in
  the  form of an  indemnity  reinsurance  arrangement,  the  remaining  gain  was
  deferred and is being  recognized  at the rate that  earnings  from the business
  sold would have been  expected  to emerge,  primarily  over  fifteen  years on a
  declining  basis.  CIGNA  recognized $15 million and $17 million of the deferred
  gain in the third quarters of 1999 and 1998, and $46 million and $50 million for
  the nine months ended September 30, 1999 and 1998, respectively.
  
  CIGNA will continue to conduct strategic and financial reviews of its businesses
  in order to deploy its capital  most  effectively.  See Note 3 to the  Financial
  Statements for additional information on acquisitions and dispositions.
  
  Other Matters
  
  CIGNA's  businesses  are  subject  to  a  changing  social,   economic,   legal,
  legislative and regulatory  environment.  Some of the more  significant  current
  issues that may affect CIGNA's businesses include:
  
  o    efforts to expand tort liability of health plans;
  o    proposed class action lawsuits targeting the health care industry's efforts
       to deliver quality care at affordable costs;
  o    initiatives to increase health care regulation; and
  o    initiatives  to  restrict   insurance   pricing  and  the   application  of
       underwriting standards.
  
  Pending  initiatives  to increase  health care  regulation  at the federal level
  include  "managed care reform" and "patients' bill of rights"  legislation.  The
  bill  that  recently  passed  the House of  Representatives  would  expand  tort
  liability  for health  plans and  change  the  practices  for  defining  medical
  necessity.  The corresponding bill that recently passed the Senate lacks similar
  provisions.  Given these differences  between the House and Senate bills and the
  general  uncertainty of the political  process,  it is not possible to determine
  what, if any, legislation will ultimately be enacted or what the effect on CIGNA
  of any such legislation would be.
  
                                         11
  <PAGE>
  Several of CIGNA's health care industry  competitors  recently have had proposed
  class  action  lawsuits  filed  against  them  by  a  coalition  of  plaintiffs'
  attorneys.  CIGNA expects that similar lawsuits could be filed against it. Given
  that no such  lawsuits  are  currently  pending  against  CIGNA  and  given  the
  uncertainties  of  predicting  the outcome of  litigation  generally,  it is not
  possible to determine at this time what the ultimate effect, if any, on CIGNA of
  any such litigation would be.
  
  The eventual  effect on CIGNA of the changing  environment  in which it operates
  remains  uncertain.  For  additional  information,  see Note 9 to the  Financial
  Statements.
  
  Recent Accounting Pronouncements
  
  CIGNA adopted  Statement of Position  (SOP) 97-3,  "Accounting  by Insurance and
  Other Enterprises for Insurance-Related  Assessments" as of January 1, 1999. SOP
  97-3, issued by the American Institute of Certified Public Accountants  (AICPA),
  provides guidance on the recognition and measurement of liabilities for guaranty
  fund and  other  insurance-related  assessments  such as  workers'  compensation
  second  injury  funds,  medical  risk pools and  charges  related  to  operating
  expenses of state regulatory  bodies.  The cumulative effect of adopting the SOP
  was a reduction  of net income of $91 million  ($140  million  pre-tax),  and is
  primarily  related to the property and casualty  business,  which CIGNA sold and
  reports as discontinued operations, as discussed above.
  
  In 1999, CIGNA adopted SOP 98-1,  "Accounting for the Costs of Computer Software
  Developed or Obtained for Internal Use." SOP 98-1,  issued by the AICPA in 1998,
  specifies the types of costs that must be  capitalized  and  amortized  over the
  software's expected useful life and the types of costs which must be immediately
  recognized  as  expense.  Implementation  of this  pronouncement  did not have a
  material effect on results of operations, liquidity or financial condition.
  
  In 1998, the Financial  Accounting Standards Board issued Statement of Financial
  Accounting Standards (SFAS) No. 133, "Accounting for Derivative  Instruments and
  Hedging  Activities."  SFAS No. 133 requires that derivatives be reported on the
  balance  sheet at fair value.  Changes in fair value are to be recognized in net
  income or, for  derivatives  that are hedging market risk related to future cash
  flows, in the accumulated  other  comprehensive  income section of shareholders'
  equity.  Implementation  is  required  by the first  quarter  of 2001,  with the
  cumulative  effect of adoption  reflected  in net income and  accumulated  other
  comprehensive  income,  as  appropriate.  CIGNA has not determined the effect or
  timing of implementation of this pronouncement.
  
  Cost Reduction Initiatives
  
  During  the third  quarter  of 1999,  CIGNA  adopted  a plan for cost  reduction
  initiatives  subsequent  to the  sale of the  property  and  casualty  business.
  Adoption of the plan  resulted in a pre-tax  charge of $15 million  ($10 million
  after-tax),  primarily for severance  expenses,  which was recorded in Corporate
  ($7 million after-tax) and the International  Life, Health and Employee Benefits
  segment  ($3  million  after-tax).   CIGNA  expects  to  substantially  complete
  implementation of this plan by mid-2000.
  
  RESULTS OF CONTINUING OPERATIONS
  <TABLE>
  <CAPTION>
  -----------------------------------------------------------------------------------
  FINANCIAL SUMMARY                     Three Months                 Nine Months
                                           Ended                        Ended
                                        September 30,               September 30,
  (In millions)                      1999          1998          1999          1998
  -----------------------------------------------------------------------------------
  <S>                              <C>           <C>          <C>            <C>
  Premiums and fees                $3,781        $3,344       $11,092        $9,914
  Net investment income               762           766         2,217         2,344
  Other revenues                      157           150           561           785
  Realized investment
    gains (losses)                    (11)           42            13           121
                                   --------------------------------------------------
  Total revenues                    4,689         4,302        13,883        13,164
  Benefits and expenses             4,752         3,890        13,109        11,684
                                   --------------------------------------------------
  Income (loss) before taxes          (63)          412           774         1,480
  Income taxes                         69           148           367           528
                                   --------------------------------------------------
  Income (loss) from
    continuing operations            (132)          264           407           952
  Realized investment
    (gains) losses, net
    of taxes                            8           (27)           (8)          (79)
  -----------------------------------------------------------------------------------
  Operating income (loss)*          $(124)         $237          $399          $873
  ---------------------------------==================================================
  </TABLE>
  --------
  * Operating  income (loss) is defined as net income (loss)  excluding  after-tax
  realized  investment results,  results of discontinued  operations and, in 1999,
  the cumulative effect of adopting SOP 97-3.
  
                                         12
  <PAGE>
  CIGNA's consolidated  operating income (as defined in the footnote above on page
  12) included certain nonrecurring items. The most significant nonrecurring items
  and operating  income excluding these items  ("adjusted  operating  income") are
  presented in the table below:
  
  -----------------------------------------------------------------------
                                     Three Months         Nine Months
                                        Ended                Ended
                                     September 30,       September 30,
  (In millions)                    1999       1998      1999       1998
  -----------------------------------------------------------------------
  Operating income (loss)         $(124)      $237      $399       $873
  Charge related to certain
    Brazilian investments           400         --       400         --
  Restructuring costs                10         --        10         --
  Gain on sale of partial
    interest in Japanese
    life insurance operations        --         --       (43)        --
  Gain on sale of individual
    life insurance and
    annuity business                 --         --        --       (202)
  -----------------------------------------------------------------------
  Adjusted operating income        $286       $237      $766       $671
  -------------------------------========================================
  
  The increase in adjusted  operating  income for the third quarter and nine month
  periods primarily reflects improved operating results in CIGNA's Employee Health
  Care,  Life and Disability  Benefits  segment and investment  income on proceeds
  from the sale of the property and casualty business.
  
  After-tax  realized  investment results of the continuing  operations  decreased
  significantly  in the third  quarter  and nine  months of 1999  versus  the same
  periods last year.  These  decreases  primarily  reflect lower gains on sales of
  fixed maturities, real estate partnerships and equity securities. For additional
  information, see Note 4 to the Financial Statements.
  
  Excluding the  nonrecurring  items presented  above,  full year operating income
  (which excludes  results of  discontinued  operations) is expected to improve in
  1999 over 1998;  however,  such improvement  could be adversely  affected by the
  factors noted in the cautionary statement on page 20.
  
  EMPLOYEE HEALTH CARE, LIFE AND DISABILITY BENEFITS
  
  ------------------------------------------------------------------------
  FINANCIAL SUMMARY               Three Months            Nine Months
                                     Ended                   Ended
                                  September 30,           September 30,
  (In millions)                1999         1998        1999        1998
  ------------------------------------------------------------------------
  Premiums and fees          $3,139       $2,870      $9,179      $8,443
  Net investment income         141          152         428         437
  Other revenues                149          136         464         402
                            ----------------------------------------------
  Segment revenues            3,429        3,158      10,071       9,282
  Benefits and expenses       3,146        2,904       9,279       8,594
                            ----------------------------------------------
  Income before taxes           283          254         792         688
  Income taxes                  101           95         280         255
                            ----------------------------------------------
  Operating income             $182         $159        $512        $433
  --------------------------==============================================
  Realized investment gains
    (losses),  net of taxes     $(6)         $19          $3         $55
  --------------------------==============================================
  
  Operating  income for the Employee  Health Care,  Life and  Disability  Benefits
  segment  increased  14% and 18% for the third  quarter  and nine  months of 1999
  compared with the same periods last year. Operating income for the Indemnity and
  HMO operations was as follows:
  
  ----------------------------------------------------------
                           Three Months        Nine Months
                               Ended              Ended
                           September 30,      September 30,
  (In millions)            1999     1998     1999     1998
  ----------------------------------------------------------
  Indemnity operations      $78      $77     $219     $219
  HMO operations            104       82      293      214
  ----------------------------------------------------------
  Total                    $182     $159     $512     $433
  -----------------------===================================
  
  Indemnity  results  for the third  quarter of 1999  primarily  reflect  improved
  Administrative Services Only (ASO) and group life and accident businesses offset
  by  lower  earnings  on  experience-rated   medical  and  long-term   disability
  businesses.  The results for the nine months also  reflect  improved  guaranteed
  cost medical claims experience.
  
  HMO operating  results for the third quarter and nine months of 1999 include net
  favorable  after-tax  adjustments  of $6 million and $18 million,  respectively,
  from account and tax reviews.  HMO results for the third quarter and nine months
  of 1998  include  net  favorable  after-tax  adjustments  of $1 million  and net
  unfavorable after-tax adjustments of $5 million, respectively,  from account and
  tax reviews. Excluding these items,
  
                                         13
  <PAGE>
  
  HMO operating  results reflect  improvement in health care services  operations,
  rate increases for guaranteed  cost HMO business,  and membership  growth in HMO
  experience-rated and alternative funding business.
  
  Premiums and fees  increased  9% for the third  quarter and nine months of 1999,
  primarily due to HMO and medical indemnity membership growth and rate increases.
  
  Net investment  income  decreased 7% for the quarter and 2% for the nine months,
  reflecting lower investment yields.
  
  As of September 30, 1999,  HMO  membership  totaled  approximately  6.7 million,
  representing  increases of 4% since September 30, 1998 and 3% since December 31,
  1998. These increases  primarily reflect  membership growth in  experience-rated
  and alternative  funding  programs,  partially  offset by declines in guaranteed
  cost HMO membership.  Under alternative  funding programs,  the customer assumes
  all or a portion of the  responsibility  for funding the payment of claims,  and
  CIGNA generally earns a lower margin than under traditional programs.
  
  Management  believes  that  adding  premium  equivalents  to  premiums  and fees
  (adjusted  premiums  and fees)  produces a more  meaningful  measure of business
  volume.  Premium  equivalents  generally represent paid claims under alternative
  funding programs, such as minimum premium and ASO plans. Premium equivalents for
  the third  quarter and nine months of 1999 were $4.0 billion and $11.4  billion,
  respectively. These amounts represent increases of 22% and 18% compared with the
  same periods last year. These increases primarily reflect HMO and PPO (Preferred
  Provider  Organization)  membership growth. Premium equivalents were 55% and 53%
  of total  adjusted  premiums  and fees for the  nine  months  of 1999 and  1998,
  respectively.   Premium   equivalents   related  to  ASO  plans   accounted  for
  approximately  51% and 49% of  total  adjusted  premiums  and  fees for the nine
  months of 1999 and 1998.
  
  EMPLOYEE RETIREMENT BENEFITS AND INVESTMENT SERVICES
  
  --------------------------------------------------------------------
  FINANCIAL SUMMARY             Three Months           Nine Months
                                    Ended                 Ended
                                September 30,         September 30,
  (In millions)               1999        1998       1999       1998
  --------------------------------------------------------------------
  Premiums and fees            $70         $54       $203       $198
  Net investment income        409         389      1,199      1,213
                            ------------------------------------------
  Segment revenues             479         443      1,402      1,411
  Benefits and expenses        382         352      1,113      1,141
                            ------------------------------------------
  Income before taxes           97          91        289        270
  Income taxes                  31          28         93         86
                            ------------------------------------------
  Operating income             $66         $63       $196       $184
  --------------------------==========================================
  Realized investment
    gains (losses), net
    of taxes                   $(1)         $6         $6        $19
  --------------------------==========================================
  
  The increases in operating  income for the third quarter and nine months of 1999
  are due to higher earnings from an increased asset base,  partially  offset by a
  shift to lower margin products (separate account equity funds). Operating income
  for the nine months of 1999 also  includes  favorable  nonrecurring  adjustments
  totaling $3 million after-tax.
  
  Premiums and fees for the third  quarter and nine months of 1999  increased  30%
  and 3%,  respectively,  compared  with the same  periods  last  year,  primarily
  reflecting  higher fees from  separate  accounts  partially  offset for the nine
  months by lower annuity sales.
  
  Net  investment  income  increased 5% and decreased 1% for the third quarter and
  nine months of 1999, respectively, primarily reflecting higher investment yields
  for the quarter and lower investment yields for the nine months.
  
                                         14
  
  <PAGE>
  
  Assets under  management  are generally a key  determinant  of earnings for this
  segment.  For the nine months ended  September 30, assets under  management  and
  related activity,  including amounts attributable to separate accounts,  were as
  follows:
  
  ---------------------------------------------------------------------
  (In millions)                                 1999             1998
  ---------------------------------------------------------------------
  Balance - January 1                        $52,929          $48,231
  Premiums and deposits                        6,292            6,073
  Investment results                           2,785            2,234
  Decrease in fair value of assets              (898)             (21)
  Customer withdrawals                        (3,780)          (2,922)
  Other, including participant
    withdrawals and benefit payments          (4,505)          (4,321)
  ---------------------------------------------------------------------
  Balance - September 30                     $52,823          $49,274
  =====================================================================
  
  For the nine months of 1999 and 1998,  approximately 63% and 54%,  respectively,
  of premiums and deposits  reflect  recurring  deposits from  existing  customers
  while the remaining  amounts represent sales to new customers and new plan sales
  to existing  customers.  Investment  results increased 25% in the nine months of
  1999 due to higher realized capital gains and growth in assets, partially offset
  by lower investment yields. The fair value of assets decreased more in 1999 than
  in 1998  primarily due to market value  depreciation  of fixed  maturities.  The
  increase in customer  withdrawals  is primarily due to the effect of withdrawals
  of defined contribution business in the first quarter of 1999.
  
  Assets  under   management   will  continue  to  be  affected  by  market  value
  fluctuations for fixed maturities and equity securities.
  
  INTERNATIONAL LIFE, HEALTH AND EMPLOYEE BENEFITS
  
  ----------------------------------------------------------------------------
  FINANCIAL SUMMARY                 Three Months              Nine Months
                                        Ended                    Ended
                                    September 30,            September 30,
  (In millions)                  1999         1998         1999         1998
  ----------------------------------------------------------------------------
  Premiums and fees              $409         $300       $1,203         $886
  Net investment income            29           27           91           83
  Other revenues                   --           --           71            1
                              ------------------------------------------------
  Segment revenues                438          327        1,365          970
  Benefits and expenses           911          306        1,757          924
                              ------------------------------------------------
  Income (losses) before
    taxes                        (473)          21         (392)          46
  Income taxes (benefits)         (76)           7          (42)          16
                              ------------------------------------------------
  Operating income (loss)       $(397)         $14        $(350)         $30
  ----------------------------================================================
  Realized investment
    losses, net of taxes          $--          $(2)         $(1)         $(2)
  ----------------------------================================================
  
  Operating income (loss) for the International Life, Health and Employee Benefits
  segment included certain nonrecurring items indicated in the table below:
  
  -----------------------------------------------------------------------
                                     Three Months         Nine Months
                                        Ended                Ended
                                    September 30,         September 30,
  (In millions)                    1999       1998      1999       1998
  -----------------------------------------------------------------------
  Operating income (loss)         $(397)       $14     $(350)       $30
  Charge related to certain
    Brazilian investments           400         --       400         --
  Restructuring costs                 3         --         3         --
  Gain on sale of partial
    interest in Japanese life
    insurance operations             --         --       (43)        --
  -----------------------------------------------------------------------
  Adjusted operating income          $6        $14       $10        $30
  -------------------------------========================================
  
  During the third  quarter of 1999,  CIGNA  completed  a review of its  Brazilian
  operations (including analyses of future estimated cash flows). These operations
  consist primarily of a health care operation and a managed health care business.
  As a result of the  review,  CIGNA  decided to  withdraw  from the  health  care
  operation but will continue to operate the managed  health care  business.  This
  review resulted in an aggregate after-tax charge of $400 million,  consisting of
  the following items:
  
  o    $305 million for the carrying value of the health care operation from which
       CIGNA is withdrawing,  certain loans  guaranteed by CIGNA,  and exit costs;
       and
  
                                         15
  
  <PAGE>
  
  o    $95 million for impairment of other investments, primarily goodwill.
  
  CIGNA's withdrawal from the health care operation could be challenged. While the
  outcome of any regulatory or legal actions cannot be determined,  CIGNA does not
  expect  that such  actions  would  result in losses  material  to its results of
  operations, liquidity or financial condition.
  
  The decline for the quarter in adjusted operating income primarily reflects less
  favorable claim experience in the health care business for expatriate  employees
  of  multinational  companies and unfavorable  mortality  experience in the group
  life  business,  partially  offset by  favorable  growth and  product mix in the
  Japanese life  operations.  The decline for the nine months also reflects losses
  of $15 million  after-tax for the  Brazilian  health care  operation  from which
  CIGNA is withdrawing.
  
  Premiums and fees  increased  36% for the third  quarter and nine months of 1999
  compared with the same periods last year.  Excluding  premiums and fees from the
  retained  Brazilian managed health care business (which were included in results
  beginning with the fourth  quarter of 1998) and the effects of foreign  currency
  changes,  premiums and fees increased 17% and 21% for the third quarter and nine
  months of 1999,  respectively.  These increases  reflect growth in Japanese life
  insurance operations and, to a lesser extent,  growth in life and group benefits
  business in Southeast  Asia, as well as higher health care premiums and fees for
  expatriate employees of multinational companies.
  
  CIGNA expects to pursue  international  growth  through  acquisitions  and other
  investments.  CIGNA expects this growth to result in additional  start-up  costs
  and initial losses.
  
  OTHER OPERATIONS
  
  ----------------------------------------------------------------------------
  FINANCIAL SUMMARY                  Three Months            Nine Months
                                        Ended                   Ended
                                     September 30,           September 30,
  (In millions)                    1999         1998        1999        1998
  ----------------------------------------------------------------------------
  Premiums and fees                $163         $120        $507        $387
  Net investment income             140          193         447         587
  Other revenues                     50           44         147         461
                                 ---------------------------------------------
  Segment revenues                  353          357       1,101       1,435
  Benefits and expenses             303          310         948         985
                                 ---------------------------------------------
  Income before taxes                50           47         153         450
  Income taxes                       17           17          53         158
                                 ---------------------------------------------
  Operating income                   33           30         100         292
  Gain on sale of
    individual life
    insurance and annuity
    business                         --           --          --        (202)
                                 ---------------------------------------------
  Adjusted operating income         $33          $30        $100         $90
  -------------------------------=============================================
  Realized investment
    gains (losses), net of
    taxes                           $(1)          $4         $--          $7
  -------------------------------=============================================
  
  Other Operations consist of:
  o    deferred  gain  recognition  related  to the  sale of the  individual  life
       insurance and annuity business;
  o    corporate life insurance on which policy loans are  outstanding  (leveraged
       corporate life insurance);
  o    life, accident and health reinsurance operations;
  o    settlement annuity business; and
  o    certain new business initiatives.
  
  The  increase in adjusted  operating  income for the quarter  reflects  improved
  health  reinsurance  results  partially  offset by lower  income from  leveraged
  corporate  life  insurance  business due to  increased  policy  surrenders.  The
  improved  results for the nine months of 1999  reflect  growth in the  specialty
  life  reinsurance  business  partially  offset by the  reductions  in  leveraged
  corporate life insurance business.
  
  The 36% and 31%  increases in premiums  and fees for the third  quarter and nine
  months of 1999 are primarily due to growth in the personal accident  reinsurance
  business partially offset by lower health reinsurance premiums.
  
                                         16
  
  <PAGE>
  
  The 27% and 24%  decreases in net  investment  income for the third  quarter and
  nine months of 1999 primarily reflect lower assets from leveraged corporate life
  insurance, and, to a lesser extent, lower yields.
  
  In 1996,  Congress passed  legislation that phased out over a three-year  period
  the tax deductibility of policy loan interest for most leveraged  corporate life
  insurance products.  As a result,  revenues and operating income associated with
  these  products are expected to continue to decline.  For the third  quarter and
  nine months of 1999,  revenues of $84 million and $274  million,  and  operating
  income of $8 million and $27 million  were from  products  that are  affected by
  this legislation.
  
  The specialty life reinsurance  products of this segment include  contracts that
  guarantee payments for specified unfavorable changes in variable annuity account
  values based on underlying  mutual fund investments if account holders expire or
  elect to  receive  periodic  income  payments.  Although  these  guarantees  may
  adversely affect CIGNA's  consolidated  results of operations in future periods,
  they are not expected to have a material adverse effect on CIGNA's  liquidity or
  financial condition.
  
  The  personal   accident   reinsurance   business  of  this   segment   includes
  participation in a workers'  compensation  program managed by Unicover Managers,
  Inc. where disputes have arisen regarding retrocessional coverage. Resolution of
  these disputes is likely to take several  years.  CIGNA does not expect to incur
  losses  material  to  its  consolidated  results  of  operations,  liquidity  or
  financial condition related to this program.
  
  CORPORATE
  
  -----------------------------------------------------------
  FINANCIAL SUMMARY    Three Months           Nine Months
                           Ended                 Ended
                       September 30,         September 30,
  (In millions)       1999       1998       1999       1998
  -----------------------------------------------------------
  Operating loss       $(8)      $(29)      $(59)      $(66)
  -------------------========================================
  
  Corporate  includes amounts not allocated to segments,  such as interest expense
  and intersegment eliminations. The reduced operating losses in the third quarter
  and nine months of 1999 primarily  reflect higher net investment income from the
  proceeds of the sale of the property and casualty business,  partially offset by
  a restructuring  charge of $7 million after-tax recorded in the third quarter of
  1999 for cost reduction initiatives (primarily severance-related costs). Results
  for the third quarter of 1999 and previous  periods  include  certain  corporate
  overhead expenses which had been allocated to the property and casualty business
  (prior to the reporting of this business as discontinued operations).
  
  PROPERTY AND CASUALTY DISCONTINUED OPERATIONS
  
  --------------------------------------------------------------------------------
  FINANCIAL SUMMARY                      Three Months               Nine Months
                                             Ended                     Ended
                                          September 30,            September 30,
  (In millions)                        1999        1998         1999         1998
  --------------------------------------------------------------------------------
  Premiums and fees                     $--        $749       $1,411       $2,195
  Net investment income                  --         145          268          446
  Other revenues                         --          73          136          203
  Realized investment gains
    (losses)                             --         (25)          48            2
                                   -----------------------------------------------
  Total revenues                         --         942        1,863        2,846
  Benefits and expenses                  --         962        1,911        2,695
                                   -----------------------------------------------
  Income (loss) before taxes             --         (20)         (48)         151
  Income taxes (benefits)                --          (7)         (20)          49
                                   -----------------------------------------------
  Income (loss) from operations          --         (13)         (28)         102
  Gain on sale, net of taxes
    of $1,152                         1,194          --        1,194           --
  --------------------------------------------------------------------------------
  Income (loss) from
    discontinued operations          $1,194        $(13)      $1,166         $102
  ---------------------------------===============================================
  
  On July 2, 1999, CIGNA sold its property and casualty business. See Acquisitions
  and  Dispositions  on page 11 for additional  information.  Amounts in the table
  above are excluded from CIGNA's results of continuing operations.
  
  LIQUIDITY AND CAPITAL RESOURCES
  
  Liquidity  for CIGNA  and its  insurance  subsidiaries  has  remained  strong as
  evidenced by  significant  amounts of short-term  investments  and cash and cash
  equivalents   in  the  aggregate.   Generally,   CIGNA  has  met  its  operating
  requirements  by maintaining  appropriate  levels of liquidity in its investment
  portfolio and through utilization of overall positive cash flows.
  
  For the nine months of 1999, cash and cash equivalents of continuing  operations
  decreased $135 million from $2.0 billion as of December 31, 1998.  This decrease
  primarily resulted from
  
                                         17
  
  <PAGE>
  
  payments of dividends on and  repurchases  of CIGNA common stock ($1.8  billion)
  and net withdrawals  from  contractholder  deposit funds ($395  million).  These
  decreases were partially  offset by cash provided by operating  activities ($1.0
  billion),  reflecting  earnings  and the timing of operating  cash  receipts and
  disbursements  and cash provided by investing  activities ($1.1 billion),  which
  includes $3.45 billion  received upon completion of the sale of the property and
  casualty business.
  
  CIGNA's  capital  resources  represent  funds  available for long-term  business
  commitments.  They primarily  consist of retained earnings and proceeds from the
  issuance of long-term debt and equity  securities.  CIGNA's  financial  strength
  provides the capacity and flexibility to enable it to raise funds in the capital
  markets  through the  issuance of such  securities.  CIGNA  continues to be well
  capitalized, with sufficient borrowing capacity to meet the anticipated needs of
  its businesses.
  
  CIGNA had $1.4 billion of long-term  debt  outstanding at September 30, 1999 and
  December  31,  1998,   respectively.   As  of  September  30,  1999,  CIGNA  had
  approximately $1 billion remaining under effective shelf registration statements
  filed with the  Securities  and Exchange  Commission  that may be issued as debt
  securities,  equity  securities or both,  depending  upon market  conditions and
  CIGNA's capital requirements.
  
  At September  30,  1999,  CIGNA's  short-term  debt  amounted to $68 million,  a
  decrease of $204 million from December 31, 1998. The decrease reflects repayment
  of  commercial  paper using  proceeds from the sale of the property and casualty
  business.
  
  CIGNA has repurchased  approximately  27,660,000  shares of its common stock for
  $2.3 billion  during  1999,  including  7,291,900  shares  repurchased  for $539
  million from October 1 through November 1, 1999. On September 22, 1999,  CIGNA's
  Board of Directors authorized an additional $2 billion of share repurchases. The
  total remaining authorization as of November 1, 1999 was $1.46 billion.
  
  INVESTMENT ASSETS - CONTINUING OPERATIONS
  
  -------------------------------------------------------------
                                 September 30,   December 31,
  (In millions)                           1999           1998
  -------------------------------------------------------------
  Fixed maturities                     $23,392        $24,270
  Equity securities                        515            477
  Mortgage loans                         9,830          9,599
  Real estate                              794            733
  Other, primarily policy loans          5,700          6,597
  -------------------------------------------------------------
  Total investment assets              $40,231        $41,676
  =============================================================
  
  Additional information regarding CIGNA's investment assets is included in Note 4
  to the third quarter 1999 Financial  Statements and Notes 2, 4 and 5 to the 1998
  Financial Statements as well as the 1998 Form 10-K.
  
  Investment  assets as of September 30, 1999 decreased 3% from December 31, 1998.
  This decrease  primarily  reflects a $2.8 billion decline in policy loans due to
  surrenders of leveraged  corporate  life  insurance  policies and a $1.4 billion
  reduction  in the fair value of fixed  maturities  due to  increases in interest
  rates, partially offset by $1.9 billion of short-term investments purchased with
  proceeds of the sale of the property and casualty business.
  
  Significant  percentages  of  CIGNA's  investment  assets  are  attributable  to
  experience-rated  contracts with policyholders  (policyholder contracts).  These
  percentages were as follows:
  
  ---------------------------------------------------------------
                            September 30,           December 31,
                                     1999                   1998
  ---------------------------------------------------------------
  Fixed maturities                    40%                    39%
  Mortgage loans                      59%                    57%
  Real estate                         64%                    63%
  ===============================================================
  
  Investments in fixed  maturities  (bonds)  include  publicly  traded and private
  placement debt  securities,  asset-backed  securities  and redeemable  preferred
  stocks.  CIGNA's  mortgage loans are diversified by property type,  location and
  borrower to reduce exposure to potential losses.
  
  Problem bonds and mortgage loans are delinquent or have been  restructured as to
  terms (interest rate or maturity date).
  
  Potential  problem bonds and mortgage  loans include fully current  amounts with
  other characteristics that increase their likelihood of
  
                                         18
  
  <PAGE>
  
  problem  classification.  CIGNA also  considers  mortgage  loans to be potential
  problems if the borrower has requested restructuring or if principal or interest
  payments are past due by more than 30 but fewer than 60 days.
  
  Real estate held for sale primarily comprises properties acquired as a result of
  foreclosure of mortgage loans.
  
  The following  table presents  problem and potential  problem bonds and mortgage
  loans and real estate held for sale, net of valuation  reserves and write-downs,
  and includes amounts attributable to policyholder contracts:
  
  ------------------------------------------------------------------
                                     September 30,    December 31,
  (In millions)                               1999            1998
  ------------------------------------------------------------------
  Problem bonds, including $14 and
    $3, respectively, related to
    emerging market investments               $165            $108
  Potential problem bonds                      $65             $58
  Problem mortgage loans                       $95             $98
  Potential problem mortgage loans            $101             $55
  Real estate held for sale                   $347            $343
  ==================================================================
  
  CIGNA's  investment  asset  write-downs,  non-accruals  and changes in valuation
  reserves  were not  material  to  CIGNA's  policyholder  contracts,  results  of
  operations,   liquidity  or  financial  condition  for  the  periods  presented.
  Additional  investment  losses are  expected  to occur in the  normal  course of
  business.  However, assuming no significant deterioration in economic conditions
  in Latin  America,  Asia or other  geographical  areas,  CIGNA  does not  expect
  additional losses to materially  affect future results of operations,  liquidity
  or financial  condition,  or to result in a significant decline in the aggregate
  carrying value of its assets.
  
  YEAR 2000
  
  CIGNA is highly  dependent  on  automated  systems and systems  applications  in
  conducting its  operations.  These systems include  information  technology (IT)
  systems  that are used for,  among other  things,  processing  claims,  billing,
  collecting  premiums  from  customers,   managing   investment   activities  and
  maintaining  management  information  systems.  If these  systems were unable to
  function because of failing to be Year 2000 ready,  CIGNA's business  operations
  would be  interrupted,  which  could have a material  adverse  effect on CIGNA's
  results of operations.
  
  CIGNA's  Year 2000 efforts  have  included:  1)  identifying  systems  requiring
  remediation;  2)  assessing  what is required to  remediate  those  systems;  3)
  remediating  systems  to be ready  for the Year  2000 (by  either  modifying  or
  replacing them); and 4) testing systems for Year 2000 readiness,  including that
  they properly interface with systems of external parties,  such as customers and
  third-party   administrators.   CIGNA  has  completed  the   identification  and
  assessment  phases  with  respect  to  its  IT  systems  that  are  critical  to
  maintaining  operations  or where the failure of those  systems  would result in
  significant  costs or  disruption of operations  ("mission  critical  systems").
  CIGNA has completed the remediation and testing of its mission critical systems.
  
  CIGNA's  systems  also  include  non-IT  systems,  such as  telephone,  facility
  management  and other systems using  embedded  chips.  These non-IT  systems are
  substantially Year 2000 ready.
  
  CIGNA is using  both  internal  and  external  resources  to meet the  timetable
  established for completion of its Year 2000 efforts. The after-tax costs of Year
  2000  efforts  (including  amounts  related  to  discontinued  operations)  were
  approximately  $100  million in 1998 and are  expected to be  approximately  $40
  million in 1999. Year 2000 after-tax costs for the third quarter and nine months
  of  1999  were   approximately  $15  million  and  $35  million,   respectively.
  Approximately  60% of total Year 2000 costs are attributable to existing systems
  resources  which have been  redirected to the Year 2000  efforts.  The remaining
  amounts  represent  incremental  costs for Year 2000 efforts.  Although  certain
  systems  development  efforts  have been  deferred in order to address Year 2000
  issues, CIGNA does not expect that this deferral will have a significant adverse
  effect on its results of operations or financial condition.
  
  CIGNA has relationships with various third-party entities in the ordinary course
  of business. For example,  CIGNA receives data from clients;  depends on others,
  such as third-party  administrators  and banks,  for services;  and bears credit
  risk on others,  such as  entities  in which it
  
                                         19
  
  <PAGE>
  
  invests.  CIGNA has identified  third-party entities critical to its operations,
  and it is  assessing  and  attempting  to mitigate its risks with respect to the
  potential  failure  of these  entities  to be Year 2000  ready by,  among  other
  things,  reviewing,  where possible,  their formal Year 2000 plans and obtaining
  Year 2000 readiness  affirmations from certain third-party entities. The effect,
  if any, on CIGNA's  results of  operations  from the  failure of these  entities
  (including  entities on which CIGNA bears  credit risk) to be Year 2000 ready is
  not reasonably estimable.
  
  While  CIGNA  expects  that its Year 2000  efforts  will be  successful,  it has
  completed a  comprehensive  analysis of the  operational  problems that would be
  reasonably  likely to result from the failure by CIGNA and certain third parties
  to complete efforts necessary to achieve Year 2000 compliance on a timely basis.
  CIGNA has  historically  had security and backup  policies  and  procedures  for
  safeguarding  critical corporate data, as well as business  continuity plans. It
  is  supplementing  these policies by developing Year 2000  contingency  plans to
  provide  for the  continuity  of  operations  in the event of Year 2000  systems
  failures or the failure of third-party entities to be Year 2000 ready. CIGNA has
  completed these contingency  plans for the most critical  functions of its major
  businesses and expects them to be ready for implementation by the end of 1999.
  
  The costs of CIGNA's Year 2000 efforts and the dates on which CIGNA  believes it
  will complete such efforts are based on management's best estimates,  which were
  derived  using  numerous  assumptions  regarding  future  events,  including the
  continued availability of certain resources,  third-party remediation plans, and
  other factors.  There can be no assurance that these  estimates will prove to be
  accurate,  and actual  results  could  differ  materially  from those  currently
  anticipated.  Specific  factors  that  could  cause  such  material  differences
  include, but are not limited to, the availability and costs of personnel trained
  in Year 2000 issues,  the ability to identify,  assess,  remediate  and test all
  relevant  computer  codes and  embedded  technology,  the risk  that  reasonable
  testing will not uncover all Year 2000 problems, and similar uncertainties.
  
  
  
  
  
  CAUTIONARY  STATEMENTS  FOR  PURPOSES  OF THE "SAFE  HARBOR"  PROVISIONS  OF THE
  PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
  
  CIGNA  and its  representatives  may  from  time to time  make  written  or oral
  forward-looking  statements,  including  statements contained in CIGNA's filings
  with the Securities and Exchange  Commission and in its reports to shareholders.
  In  connection  with the "safe  harbor"  provisions  of the  Private  Securities
  Litigation  Reform Act of 1995,  CIGNA  cautions the reader that actual  results
  could differ  materially from those contained in any  forward-looking  statement
  made by or on behalf of CIGNA, depending on the outcome of certain factors (some
  of which  are  described  with the  forward-looking  statements)  including:  1)
  increases  in  medical  costs  in  CIGNA's  health  care  operations,  including
  increases in utilization and costs of medical  services;  2) increased  medical,
  administrative  or  other  costs  resulting  from  legislative,  regulatory  and
  potential litigation challenges to CIGNA's health care business (see page 11 for
  more information);  3) heightened  competition,  particularly price competition,
  reducing  product  margins and  constraining  growth in CIGNA's  businesses;  4)
  significant  changes in interest  rates;  5) significant  stock market  declines
  resulting in payments  contingent on certain variable annuity account values; 6)
  the  effect on  CIGNA's  international  operations  and  investments  of further
  significant  deterioration  in  Latin  American  and  Asian  economies;  and  7)
  proposals to change federal income taxes. CIGNA cautions that the foregoing list
  of important factors may not be complete. CIGNA does not undertake to update any
  forward-looking  statement that may be made from time to time by or on behalf of
  CIGNA.
  
                                         20
  <PAGE>
  
  
  Part II.  OTHER INFORMATION
  
  
  Item 6.   Exhibits and Reports on Form 8-K.
  
  
            (a)  See Exhibit Index.
  
            (b)  During the quarterly  period ended  September 30, 1999, and as of
                 the filing date, CIGNA filed the following Reports on Form 8-K:
  
                 o    dated  November 1, 1999,  Item 5 - containing a news release
                      regarding its third quarter 1999 results.
  
                 o    dated  August 2, 1999,  Item 5 -  containing  a news release
                      regarding its second quarter 1999 results.
  
                 o    dated  July 2,  1999,  Item 2 -  containing  a news  release
                      regarding  the  completion  of the sale of its  domestic and
                      international   property  and  casualty  businesses  to  ACE
                      Limited.
  
  
                                         21
  <PAGE>
                                      SIGNATURE
  
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  registrant  has duly  caused this  report to be signed by the  undersigned  duly
  authorized officer, on its behalf and in the capacity indicated.
  
  
  
                                                  CIGNA CORPORATION
  
  
  
                                                  By: /s/James A. Sears
                                                      ----------------------------
                                                      James A. Sears
                                                      Vice President and
                                                      Chief Accounting Officer
  
  
  Date:    November  5, 1999
  
  
                                         22
  <PAGE>
  
  
                                    Exhibit Index
                                    -------------
  
  
                                                             Method of
  Number      Description                                     Filing
  ------      -----------                                     ------
  
  
  12          Computation of Ratio of                     Filed herewith
              Earnings to Fixed Charges
  
  27          Financial Data Schedule                     Included only in
                                                          the EDGAR version of
                                                          the Form 10-Q
  
  
  
  
                                         23
metadata_documents: [{"type": "10-Q", "sequence": "1", "secsgml_size_bytes": 112582}]
metadata_filer: {"company-data": {"conformed-name": "CIGNA CORP", "cik": "0000701221", "assigned-sic": "6321", "irs-number": "061059331", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "10-Q", "act": "34", "file-number": "001-08323", "film-number": "99742119"}, "business-address": {"street1": "ONE LIBERTY PLACE 48TH FLOOR", "street2": "1601 CHESTNUT STREET", "city": "PHILADELPHIA", "state": "PA", "zip": "19192-1550", "phone": "2157616211"}, "mail-address": {"street1": "TWO LIBERTY PLACE 48TH FLOOR", "street2": "1601 CHESTNUT STREET", "city": "PHILADELPHIA", "state": "PA", "zip": "19192"}}
text: UNITED STATES
                         SECURITIES AND EXCHANGE COMMISSION
                               Washington, D.C. 20549
  
                                      FORM 10-Q
  
                [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                  For the quarterly period ended September 30, 1999
                                                 ------------------
  
                                         OR
  
                [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                       OF THE SECURITIES EXCHANGE ACT OF 1934
  
                    for the transition period from _____ to _____
  
                            Commission file number 1-8323
                                                   ------
  
                                  CIGNA Corporation
               ------------------------------------------------------
               (Exact name of registrant as specified in its charter)
  
                   Delaware                         06-1059331
      ---------------------------------         -------------------
        (State or other jurisdiction            (I.R.S. Employer
      of incorporation or organization)         Identification No.)
  
                        One Liberty Place, 1650 Market Street
                          Philadelphia, Pennsylvania 19192
                 ---------------------------------------------------
                 (Address of principal executive offices) (Zip Code)
  
          Registrant's telephone number, including area code (215) 761-1000
                                                             --------------
  
                                   Not Applicable
                 ---------------------------------------------------
                (Former name, former address and former fiscal year,
                           if changed since last report)
  
       Indicate  by check mark  whether the  registrant  (1) has filed all reports
  required to be filed by Section 13 or 15(d) of the  Securities  Exchange  Act of
  1934  during  the  preceding  12 months  (or for such  shorter  period  that the
  registrant was required to file such reports),  and (2) has been subject to such
  filing requirements for the past 90 days.
                                                 Yes _x_   No ___
  
  As of September 30, 1999,  185,952,253  shares of the issuer's Common Stock were
  outstanding.
  CIGNA CORPORATION
  
                                        INDEX
  
                                                                          Page No.
                                                                          --------
  
  PART I.  FINANCIAL INFORMATION
  
           Item 1.  Financial Statements
                    Consolidated Income Statements                           1
                    Consolidated Balance Sheets                              2
                    Consolidated Statements of Comprehensive
                      Income and Changes in Shareholders' Equity             3
                    Consolidated Statements of Cash  Flows                   4
                    Notes to Financial Statements                            5
  
           Item 2.  Management's Discussion and Analysis
                      of Financial Condition and Results of Operations      11
  
  PART II. OTHER INFORMATION
  
           Item 6.  Exhibits and Reports on Form 8-K                        21
  
  SIGNATURE                                                                 22
  
  EXHIBIT INDEX                                                             23
  
  As used  herein,  "CIGNA"  refers  to one or more of CIGNA  Corporation  and its
  consolidated subsidiaries.
  Part I.  FINANCIAL  INFORMATION
  Item 1.  Financial Statements
  -----------------------------
  
  CIGNA  CORPORATION
  CONSOLIDATED INCOME STATEMENTS
  (In millions, except per share amounts)
  Three Months Ended         Nine Months Ended
                                                                 September 30,              September 30,
                                                             1999           1998         1999          1998
  ------------------------------------------------------------------------------------------------------------
  REVENUES
  Premiums and fees                                        $  3,781      $  3,344      $ 11,092      $  9,914
  Net investment income                                         762           766         2,217         2,344
  Other revenues                                                157           150           561           785
  Realized investment gains (losses)                            (11)           42            13           121
                                                           --------      --------      --------      --------
  
      Total revenues                                          4,689         4,302        13,883        13,164
                                                           --------      --------      --------      --------
  
  BENEFITS, LOSSES AND EXPENSES
  Benefits, losses and settlement expenses                    3,142         2,879         9,280         8,655
  Policy acquisition expenses                                    63            58           188           148
  Other operating expenses                                    1,547           953         3,641         2,881
                                                           --------      --------      --------      --------
  
      Total benefits, losses and expenses                     4,752         3,890        13,109        11,684
                                                           --------      --------      --------      --------
  
  INCOME (LOSS) FROM CONTINUING OPERATIONS
      BEFORE INCOME TAXES                                       (63)          412           774         1,480
                                                           --------      --------      --------      --------
  
  Income taxes (benefits):
      Current                                                   159           132           485           666
      Deferred                                                  (90)           16          (118)         (138)
                                                           --------      --------      --------      --------
          Total taxes                                            69           148           367           528
                                                           --------      --------      --------      --------
  
  INCOME (LOSS) FROM CONTINUING OPERATIONS                     (132)          264           407           952
                                                           --------      --------      --------      --------
  DISCONTINUED OPERATIONS
  Income (loss) from operations, net of taxes                    --           (13)          (28)          102
  Gain on sale, net of taxes                                  1,194            --         1,194            --
                                                           --------      --------      --------      --------
      Income (loss) from discontinued operations              1,194           (13)        1,166           102
                                                           --------      --------      --------      --------
  INCOME BEFORE CUMULATIVE
       EFFECT OF ACCOUNTING CHANGE                            1,062           251         1,573         1,054
  
  Cumulative effect of accounting change, net of taxes           --            --           (91)           --
                                                           --------      --------      --------      --------
  
  NET INCOME                                               $  1,062      $    251      $  1,482      $  1,054
  -------------------------------------------------------=====================================================
  BASIC EARNINGS PER SHARE
  Income (loss) from continuing operations                 $  (0.68)     $   1.26      $   2.03      $   4.47
  Income (loss) from discontinued operations                   6.12         (0.06)         5.81          0.48
  ------------------------------------------------------------------------------------------------------------
  Income before cumulative effect of accounting change         5.44          1.20          7.84          4.95
  Cumulative effect of accounting change, net of taxes           --            --         (0.45)           --
  ------------------------------------------------------------------------------------------------------------
  Net income                                               $   5.44      $   1.20      $   7.39      $   4.95
  -------------------------------------------------------=====================================================
  DILUTED EARNINGS PER SHARE
  Income (loss) from continuing operations                 $  (0.68)     $   1.25      $   2.00      $   4.42
  Income (loss) from discontinued operations                   6.12         (0.06)         5.73          0.48
  ------------------------------------------------------------------------------------------------------------
  Income before cumulative effect of accounting change         5.44          1.19          7.73          4.90
  Cumulative effect of accounting change, net of taxes           --            --         (0.45)           --
  ------------------------------------------------------------------------------------------------------------
  Net income                                               $   5.44      $   1.19      $   7.28      $   4.90
  -------------------------------------------------------=====================================================
  DIVIDENDS DECLARED PER SHARE                             $   0.30      $   0.29      $   0.90      $   0.86
  -------------------------------------------------------=====================================================
  The Notes to Financial Statements are an integral part of these statements.
  
                                         1
  CIGNA  CORPORATION
  CONSOLIDATED  BALANCE  SHEETS
  (In millions, except per share amounts)
  As of                   As of
                                                                                    September 30,           December 31,
                                                                                        1999                    1998
  ---------------------------------------------------------------------------------------------------------------------
  ASSETS
  Investments:
     Fixed maturities, at fair value (amortized cost, $23,188; $22,663)               $ 23,392                $ 24,270
     Equity securities, at fair value (cost, $271; $249)                                   515                     477
     Mortgage loans                                                                      9,830                   9,599
     Policy loans                                                                        3,339                   6,185
     Real estate                                                                           794                     733
     Other long-term investments                                                           164                     170
     Short-term investments                                                              2,197                     242
                                                                                      --------                --------
         Total investments                                                              40,231                  41,676
  Cash and cash equivalents                                                              1,851                   1,986
  Accrued investment income                                                                623                     617
  Premiums, accounts and notes receivable                                                2,423                   2,481
  Reinsurance recoverables                                                               6,795                   6,666
  Deferred policy acquisition costs                                                        850                     730
  Property and equipment                                                                   707                     701
  Deferred income taxes                                                                  1,309                   1,034
  Other assets                                                                             506                     750
  Goodwill and other intangibles                                                         1,974                   2,090
  Separate account assets                                                               35,504                  34,808
  Net assets of discontinued operations                                                     --                   2,351
  ---------------------------------------------------------------------------------------------------------------------
          Total assets                                                                $ 92,773                $ 95,890
  -----------------------------------------------------------------------------------==================================
  LIABILITIES
  Contractholder deposit funds                                                        $ 27,353                $ 30,607
  Unpaid claims and claim expenses                                                       3,860                   3,392
  Future policy benefits                                                                12,377                  12,510
  Unearned premiums                                                                        540                     589
                                                                                      --------                --------
           Total insurance and contractholder liabilities                               44,130                  47,098
  Accounts payable, accrued expenses and other liabilities                               4,756                   4,358
  Current income taxes                                                                     196                      27
  Short-term debt                                                                           68                     272
  Long-term debt                                                                         1,360                   1,428
  Separate account liabilities                                                          35,087                  34,430
  ---------------------------------------------------------------------------------------------------------------------
           Total liabilities                                                            85,597                  87,613
  ---------------------------------------------------------------------------------------------------------------------
  
  CONTINGENCIES - NOTE 9
  
  SHAREHOLDERS' EQUITY
  Common stock (par value, $0.25; shares issued, 267; 265)                                  67                      66
  Additional paid-in capital                                                             2,821                   2,719
  Net unrealized appreciation, fixed maturities                            $     12                $    750
  Net unrealized appreciation, equity securities                                150                     206
  Net translation of foreign currencies                                           6                    (114)
                                                                           --------                --------
     Accumulated other comprehensive income                                                168                     842
  Retained earnings                                                                      8,049                   6,746
  Less treasury stock, at cost                                                          (3,929)                 (2,096)
  ---------------------------------------------------------------------------------------------------------------------
           Total shareholders' equity                                                    7,176                   8,277
  ---------------------------------------------------------------------------------------------------------------------
           Total liabilities and shareholders' equity                                 $ 92,773                $ 95,890
  -----------------------------------------------------------------------------------==================================
  SHAREHOLDERS' EQUITY PER SHARE                                                      $  38.59                $  40.25
  -----------------------------------------------------------------------------------==================================
  The Notes to Financial Statements are an integral part of these statements.
  
                                         2
  CIGNA  CORPORATION
  CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME AND CHANGES IN
     SHAREHOLDERS' EQUITY
  (In millions)
  Three Months Ended September 30,                                             1999                     1998
  --------------------------------------------------------------------------------------------------------------------
                                                                       Compre-      Share-      Compre-       Share-
                                                                      hensive     holders'      hensive     holders'
                                                                       Income       Equity       Income       Equity
  --------------------------------------------------------------------------------------------------------------------
  Common stock                                                                     $    67                   $    66
                                                                                   ---------                 ---------
  Additional paid-in capital, July 1                                                 2,814                     2,704
    Issuance of common stock for employee benefits plans                                 7                         6
                                                                                   ---------                 ---------
  Additional paid-in capital, September 30                                           2,821                     2,710
                                                                                   ---------                 ---------
  Accumulated other comprehensive income, July 1                                       215                       835
    Net unrealized appreciation (depreciation), fixed maturities      $  (148)        (148)     $   119          119
    Net unrealized depreciation, equity securities                       (128)        (128)         (85)         (85)
                                                                      ---------                 ---------
        Net unrealized appreciation (depreciation) on securities         (276)                       34
    Net translation of foreign currencies                                 229          229          (27)         (27)
                                                                      ---------                 ---------
            Other comprehensive income (loss)                             (47)                        7
                                                                                   ---------                 ---------
  Accumulated other comprehensive income, September 30                                 168                       842
                                                                                   ---------                 ---------
  Retained earnings, July 1                                                          7,045                     6,376
    Net income                                                          1,062        1,062          251          251
    Common dividends declared                                                          (58)                      (60)
                                                                                   ---------                 ---------
  Retained earnings, September 30                                                    8,049                     6,567
                                                                                   ---------                 ---------
  Treasury stock, July 1                                                            (2,800)                   (1,641)
    Repurchase of common stock                                                      (1,128)                     (385)
    Other treasury stock transactions, net                                              (1)                       (3)
                                                                                   ---------                 ---------
  Treasury stock, September 30                                                      (3,929)                   (2,029)
  --------------------------------------------------------------------------------------------------------------------
  TOTAL COMPREHENSIVE INCOME AND SHAREHOLDERS' EQUITY                 $ 1,015      $ 7,176      $   258      $ 8,156
  ------------------------------------------------------------------==================================================
  
  Nine Months Ended September 30,
  --------------------------------------------------------------------------------------------------------------------
  
  Common stock, January 1                                                          $    66                   $    66
    Issuance of common stock for employee benefits plans                                 1                        --
                                                                                   ---------                 ---------
  Common stock, September 30                                                            67                        66
                                                                                   ---------                 ---------
  Additional paid-in capital, January 1                                              2,719                     2,655
    Issuance of common stock for employee benefits plans                               102                        55
                                                                                   ---------                 ---------
  Additional paid-in capital, September 30                                           2,821                     2,710
                                                                                   ---------                 ---------
  Accumulated other comprehensive income, January 1                                    842                       758
    Net unrealized appreciation (depreciation), fixed maturities      $  (738)        (738)     $   112          112
    Net unrealized depreciation, equity securities                        (56)         (56)          (5)          (5)
                                                                      ---------                 ---------
        Net unrealized appreciation (depreciation) on securities         (794)                      107
    Net translation of foreign currencies                                 120          120          (23)         (23)
                                                                      ---------                 ---------
            Other comprehensive income (loss)                            (674)                       84
                                                                                   ---------                 ---------
  Accumulated other comprehensive income, September 30                                 168                       842
                                                                                   ---------                 ---------
  Retained earnings, January 1                                                       6,746                     5,696
    Net income                                                          1,482        1,482        1,054        1,054
    Common dividends declared                                                         (179)                     (183)
                                                                                   ---------                 ---------
  Retained earnings, September 30                                                    8,049                     6,567
                                                                                   ---------                 ---------
  Treasury stock, January 1                                                         (2,096)                   (1,243)
    Repurchase of common stock                                                      (1,786)                     (756)
    Other treasury stock transactions, net                                             (47)                      (30)
                                                                                   ---------                 ---------
  Treasury stock, September 30                                                      (3,929)                   (2,029)
  --------------------------------------------------------------------------------------------------------------------
  TOTAL COMPREHENSIVE INCOME AND SHAREHOLDERS' EQUITY                 $   808      $ 7,176      $ 1,138      $ 8,156
  ------------------------------------------------------------------==================================================
  The Notes to Financial Statements are an integral part of these statements.
  
                                         3
  CIGNA  CORPORATION
  CONSOLIDATED  STATEMENTS  OF  CASH  FLOWS
  (In millions)
  Nine Months Ended September 30,
                                                                                                      1999           1998
  ------------------------------------------------------------------------------------------------------------------------------
  CASH FLOWS FROM OPERATING ACTIVITIES
      Income from continuing operations                                                             $   407       $   952
      Adjustments to reconcile income from continuing operations
          to net cash provided by operating activities:
              Insurance liabilities                                                                     660           696
              Reinsurance recoverables                                                                  (82)          (69)
              Deferred policy acquisition costs                                                        (101)         (113)
              Premiums, accounts and notes receivable                                                  (348)         (207)
              Accounts payable, accrued expenses, other liabilities and
                  current income taxes                                                                  263           (26)
              Deferred income taxes                                                                    (118)         (138)
              Realized investment gains                                                                 (13)         (121)
              Depreciation and goodwill amortization                                                    172           173
              Gain on sale of businesses (excluding discontinued operations)                           (139)         (393)
              Charge attributable to Brazilian investments                                              478            --
              Other, net                                                                               (154)         (293)
                                                                                                    ---------     ---------
                  Net cash provided by operating activities of continuing operations                  1,025           461
                                                                                                    ---------     ---------
  
  CASH FLOWS FROM INVESTING ACTIVITIES
      Proceeds from investments sold:
          Fixed maturities                                                                            1,889         2,599
          Equity securities                                                                              81           122
          Mortgage loans                                                                                481           824
          Other                                                                                       1,236           993
      Investment maturities and repayments:
          Fixed maturities                                                                            2,090         2,406
          Mortgage loans                                                                                276           416
      Investments purchased:
          Fixed maturities                                                                           (4,353)       (4,876)
          Equity securities                                                                             (83)          (55)
          Mortgage loans                                                                             (1,080)       (1,292)
          Other                                                                                      (2,782)       (2,028)
      Proceeds on sale of businesses                                                                  3,557           998
      Other, net                                                                                       (207)         (160)
                                                                                                    ---------     ---------
                  Net cash provided by (used in) investing activities of continuing operations        1,105           (53)
                                                                                                    ---------     ---------
  
  CASH FLOWS FROM FINANCING ACTIVITIES
      Deposits and interest credited to contractholder deposit funds                                  5,708         4,648
      Withdrawals and benefit payments from contractholder deposit funds                             (6,103)       (4,892)
      Net change in short-term debt                                                                    (256)         (372)
      Repayment of long-term debt                                                                       (16)          (99)
      Repurchase of common stock                                                                     (1,596)         (754)
      Issuance of common stock                                                                           39            20
      Common dividends paid                                                                            (180)         (184)
                                                                                                    ---------     ---------
                  Net cash used in financing activities of continuing operations                     (2,404)       (1,633)
                                                                                                    ---------     ---------
  Effect of foreign currency rate changes on cash and cash equivalents                                    1            (8)
  Net cash (to) from discontinued operations                                                            138          (143)
  -------------------------------------------------------------------------------------------------------------------------
  Net decrease in cash and cash equivalents                                                            (135)       (1,376)
  Cash and cash equivalents, beginning of period                                                      1,986         1,832
  -------------------------------------------------------------------------------------------------------------------------
  
  Cash and cash equivalents, end of period                                                          $ 1,851       $   456
  ------------------------------------------------------------------------------------------------=========================
  
  Supplemental Disclosure of Cash Information:
      Income taxes paid, net of refunds                                                             $   346       $   626
      Interest paid                                                                                 $    82       $    81
  -------------------------------------------------------------------------------------------------------------------------
  The Notes to Financial Statements are an integral part of these statements.
  
                                         4
  CIGNA CORPORATION
  NOTES TO FINANCIAL STATEMENTS
  
  NOTE 1 - BASIS OF PRESENTATION
  
  The consolidated  financial statements include the accounts of CIGNA Corporation
  and  all  significant   subsidiaries  (CIGNA).   These  consolidated   financial
  statements have been prepared in conformity with generally  accepted  accounting
  principles.  Certain  reclassifications  have been made to conform with the 1999
  presentation.
  
  The interim  financial  statements  are  unaudited  but include all  adjustments
  (consisting  of normal  recurring  adjustments)  necessary,  in the  opinion  of
  management, for a fair statement of financial position and results of operations
  for the period reported.
  
  The preparation of interim financial  statements  necessarily  relies heavily on
  estimates.  This and  certain  other  factors,  such as the  seasonal  nature of
  portions of CIGNA's business as well as competitive and other market conditions,
  call for  caution  in  estimating  results  for the full year  based on  interim
  results of operations.
  
  NOTE 2 - RECENT ACCOUNTING PRONOUNCEMENTS
  
  CIGNA adopted  Statement of Position  (SOP) 97-3,  "Accounting  by Insurance and
  Other Enterprises for Insurance-Related  Assessments" as of January 1, 1999. SOP
  97-3, issued by the American Institute of Certified Public Accountants  (AICPA),
  provides guidance on the recognition and measurement of liabilities for guaranty
  fund and  other  insurance-related  assessments  such as  workers'  compensation
  second  injury  funds,  medical  risk pools and  charges  related  to  operating
  expenses of state regulatory  bodies.  The cumulative effect of adopting the SOP
  was a reduction  of net income of $91 million  ($140  million  pre-tax),  and is
  primarily  related to the property and casualty  business,  which CIGNA sold and
  reports as discontinued operations.
  
  In 1999, CIGNA adopted SOP 98-1,  "Accounting for the Costs of Computer Software
  Developed or Obtained for Internal Use." SOP 98-1,  issued by the AICPA in 1998,
  specifies the types of costs that must be  capitalized  and  amortized  over the
  software's expected useful life and the types of costs which must be immediately
  recognized  as  expense.  Implementation  of this  pronouncement  did not have a
  material effect on results of operations, liquidity or financial condition.
  
  In 1998, the Financial  Accounting Standards Board issued Statement of Financial
  Accounting Standards (SFAS) No. 133, "Accounting for Derivative  Instruments and
  Hedging  Activities."  SFAS No. 133 requires that derivatives be reported on the
  balance  sheet at fair value.  Changes in fair value are to be recognized in net
  income or, for  derivatives  that are hedging market risk related to future cash
  flows, in the accumulated  other  comprehensive  income section of shareholders'
  equity.  Implementation  is  required  by the first  quarter  of 2001,  with the
  cumulative  effect of adoption  reflected  in net income and  accumulated  other
  comprehensive  income,  as  appropriate.  CIGNA has not determined the effect or
  timing of implementation of this pronouncement.
  
  NOTE 3 - ACQUISITIONS AND DISPOSITIONS
  
  On July 2, 1999, CIGNA sold its domestic and international property and casualty
  business to ACE Limited for cash proceeds of $3.45  billion.  CIGNA reports this
  business as discontinued  operations and has reclassified prior period financial
  information.  CIGNA recognized the after-tax gain on sale of approximately  $1.2
  billion in discontinued operations in the third quarter.
  
                                         5
  Summarized financial data for the discontinued operations is outlined below:
  ------------------------------------------------------------------------------------------------
                                                         Three Months             Nine Months
                                                            Ended                   Ended
                                                        September 30,            September 30,
  (In millions)                                       1999        1998         1999         1998
  ------------------------------------------------------------------------------------------------
  Income Statement Data
  Revenues                                             $--        $942       $1,863       $2,846
                                                    ----------------------------------------------
  Income (loss) before income taxes (benefits)         $--        $(20)        $(48)        $151
  Income taxes (benefits)                               --          (7)         (20)          49
                                                    ----------------------------------------------
  Income (loss) from operations                         --         (13)         (28)         102
  Gain on sale, net of taxes of $1,152               1,194          --        1,194           --
  ------------------------------------------------------------------------------------------------
  Income (loss) from discontinued operations        $1,194        $(13)      $1,166         $102
  -------------------------------------------------===============================================
  ------------------------------------------
                               December 31,
  (In millions)                        1998
  ------------------------------------------
  Balance Sheet Data
  Invested assets                 $ 9,031
  Reinsurance recoverables          6,470
  Other assets                      6,240
                             --------------
  Total assets                     21,741
                             --------------
  Insurance liabilities            16,494
  Other liabilities                 2,896
                             --------------
  Total liabilities                19,390
  -----------------------------------------
  Net assets*                     $ 2,351
  ---------------------------==============
  
  The gain includes the  recognition  of after-tax  foreign  currency  translation
  losses of $139 million  (net of tax benefits of $80 million) and net  unrealized
  appreciation on securities of $163 million (net of taxes of $65 million).
  
  During the third  quarter of 1999,  CIGNA  completed  a review of its  Brazilian
  operations (including analyses of future estimated cash flows). These operations
  consist primarily of a health care operation and a managed health care business.
  As a result of the  review,  CIGNA  decided to  withdraw  from the  health  care
  operation but will continue to operate the managed  health care  business.  This
  review  resulted in an aggregate  after-tax  charge of $400 million.  The charge
  includes the recognition of after-tax foreign currency translation losses of $89
  million (net of a tax benefit of $48  million),  and  consists of the  following
  items:
  
  o    $305 million for the carrying value of the health care operation from which
       CIGNA is withdrawing,  certain loans  guaranteed by CIGNA,  and exit costs;
       and
  o    $95 million for impairment of other investments, primarily goodwill.
  
  CIGNA's withdrawal from the health care operation could be challenged. While the
  outcome of any regulatory or legal actions cannot be determined,  CIGNA does not
  expect  that such  actions  would  result in losses  material  to its results of
  operations, liquidity or financial condition.
  
  In  April  1999,  CIGNA  sold a 29%  interest  in its  Japanese  life  insurance
  operations  to Yasuda Fire & Marine  Insurance  Company Ltd.,  reducing  CIGNA's
  ownership interest to 61%. Proceeds of the sale were $105 million. The after-tax
  gain was $43  million  and is reported  in the  International  Life,  Health and
  Employee Benefits segment.
  
  As of January 1, 1998,  CIGNA sold its  individual  life  insurance  and annuity
  business to Lincoln National  Corporation for cash proceeds of $1.4 billion. The
  sale resulted in an after-tax gain of  approximately  $770 million of which $202
  million was recognized upon closing of the sale.  Since the principal  agreement
  to sell this  business is in the form of an indemnity  reinsurance  arrangement,
  the  remaining  gain was  deferred  and is  being  recognized  at the rate  that
  earnings from the business  sold would have been  expected to emerge,  primarily
  over fifteen years on a declining  basis.  CIGNA  recognized $15 million and $17
  million of the  deferred  gain in the third  quarters of 1999 and 1998,  and $46
  million and $50 million for the nine months ended  September  30, 1999 and 1998,
  respectively.
  
  CIGNA had other acquisitions and dispositions during the nine months of 1999 and
  1998, the effects of which were not material to the financial statements.
  
  --------
  *  Accumulated  other  comprehensive  income  associated  with the  discontinued
  operations  was $222 million as of December 31, 1998.
  
                                         6
  NOTE 4 - INVESTMENTS
  
  Realized Investment Gains and Losses
  
  Realized  gains and losses on investments  of continuing  operations,  excluding
  policyholder share, were as follows:
  
  -------------------------------------------------------------------------------
                                     Three Months                Nine Months
                                         Ended                      Ended
                                     September 30,              September 30,
  (In millions)                   1999          1998         1999          1998
  -------------------------------------------------------------------------------
  Fixed maturities                $(15)          $19          $(5)          $39
  Equity securities                  2             5           15            30
  Mortgage loans                    --             7           --            12
  Real Estate                       --             8            1            15
  Other                              2             3            2            25
                                -------------------------------------------------
                                   (11)           42           13           121
  Less income taxes
    (benefits)                      (3)           15            5            42
  -------------------------------------------------------------------------------
  Net realized investment
    gains (losses)                 $(8)          $27           $8           $79
  ------------------------------=================================================
  
  Fixed Maturities and Equity Securities
  
  Sales of  available-for-sale  fixed maturities and equity securities,  including
  policyholder share, for continuing operations were as follows:
  
  ----------------------------------------------------------------------------
                                 Three Months                 Nine Months
                                     Ended                       Ended
                                 September 30,              September 30,
  (In millions)                1999         1998         1999         1998
  ----------------------------------------------------------------------------
  Proceeds from sales          $610         $686       $1,970       $2,721
  Gross gains on sales           11           58           54          155
  Gross losses on sales         (16)          (1)         (24)         (42)
  ----------------------------------------------------------------------------
  
  The  components  of net  unrealized  appreciation  (depreciation)  on securities
  (including  securities of  discontinued  operations  and excluding  policyholder
  share) for the three and nine months ended September 30 were as follows:
  
  --------------------------------------------------------------------
  (In millions)                                      1999       1998
  --------------------------------------------------------------------
  Three months ended September 30,
  Unrealized appreciation (depreciation) on
    securities held, net of taxes (benefits) of
    $(68) and $26, respectively.                    $(121)       $32
  Less gains (losses) realized in net income,
    net of taxes of $60 in 1999.                      155         (2)
  --------------------------------------------------------------------
  Net unrealized appreciation (depreciation)        $(276)       $34
  ------------------------------------------------====================
  Nine months ended September 30,
  Unrealized appreciation (depreciation) on
    securities held, net of taxes (benefits) of
    $(312) and $135, respectively.                  $(575)      $251
  Less gains realized in net income, net of
    taxes of $94 and $78, respectively.               219        144
  --------------------------------------------------------------------
  Net unrealized appreciation (depreciation)        $(794)      $107
  ------------------------------------------------====================
  
                                         7
  NOTE 5 - EARNINGS PER SHARE
  
  Income and per share amounts reflect income (loss) from continuing operations.
  ------------------------------------------------------------------------------
                                                          Effect
  (Dollars in millions,                                       Of
  except per share amounts)                  Basic      Dilution        Diluted
  ------------------------------------------------------------------------------
  Three Months Ended September 30,
  ------------------------------------------------------------------------------
  1999
  ------------------------------------------------------------------------------
  Loss                                        $(132)           --        $(132)
  ----------------------------------------======================================
  Shares (in thousands):
  Weighted average                          195,137           --       195,137
  Options and restricted stock grants*                        --            --
  ------------------------------------------------------------------------------
  Total shares                              195,137           --       195,137
  ----------------------------------------======================================
  Loss per share                             $(0.68)           --       $(0.68)
  ----------------------------------------======================================
  1998
  ------------------------------------------------------------------------------
  Income                                       $264           --          $264
  ----------------------------------------======================================
  Shares (in thousands):
  Weighted average                          209,212           --       209,212
  Options and restricted stock grants                      2,300         2,300
  ------------------------------------------------------------------------------
  Total shares                              209,212        2,300       211,512
  ----------------------------------------======================================
  Earnings per share                          $1.26       $(0.01)        $1.25
  ----------------------------------------======================================
  
  Nine Months Ended September 30,
  ------------------------------------------------------------------------------
  1999
  ------------------------------------------------------------------------------
  Income                                       $407           --          $407
  ----------------------------------------======================================
  Shares (in thousands):
  Weighted average                          200,541           --       200,541
  Options and restricted stock grants                      2,933         2,933
  ------------------------------------------------------------------------------
  Total shares                              200,541        2,933       203,474
  ----------------------------------------======================================
  Earnings per share                          $2.03       $(0.03)        $2.00
  ----------------------------------------======================================
  1998
  ------------------------------------------------------------------------------
  Income                                       $952           --          $952
  ----------------------------------------======================================
  Shares (in thousands):
  Weighted average                          212,871           --       212,871
  Options and restricted stock grants                      2,376         2,376
  ------------------------------------------------------------------------------
  Total shares                              212,871        2,376       215,247
  ----------------------------------------======================================
  Earnings per share                          $4.47       $(0.05)        $4.42
  ----------------------------------------======================================
  
  Common  shares held as Treasury  shares were  80,809,495  and  58,498,295  as of
  September 30, 1999 and 1998, respectively.
  
  NOTE 6 - REINSURANCE RECOVERABLES
  
  In the normal  course of business,  CIGNA's  insurance  subsidiaries  enter into
  agreements  to assume  and cede  reinsurance  with  other  insurance  companies.
  Reinsurance  is ceded  primarily  to limit  losses from large  exposures  and to
  permit recovery of a portion of direct losses,  although ceded  reinsurance does
  not relieve the originating insurer of liability.
  
  In connection  with the sale of CIGNA's  individual  life  insurance and annuity
  business,  the  reinsurance  recoverable  from Lincoln  National  Corporation at
  September 30, 1999 was $6.1 billion.
  
  Failure of reinsurers to indemnify CIGNA, as a result of reinsurer  insolvencies
  and disputes, could result in losses. However, CIGNA does not expect charges for
  unrecoverable   reinsurance  to  have  a  material  effect  on  its  results  of
  operations, liquidity or financial condition.
  
  In CIGNA's  consolidated income statements,  premiums and fees were net of ceded
  premiums and benefits,  losses and  settlement  expenses were net of reinsurance
  recoveries as follows:
  
  -------------------------------------------------------------
                              Three Months       Nine Months
                                  Ended             Ended
                              September 30,     September 30,
  (In millions)               1999     1998     1999     1998
  -------------------------------------------------------------
  Ceded premiums:
  Individual life
    insurance and
    annuity business sold     $159     $139     $323     $360
  Other                        118       91      347      305
  -------------------------------------------------------------
  Total                       $277     $230     $670     $665
  --------------------------===================================
  Reinsurance recoveries:
  Individual life
    insurance and
    annuity business sold     $162     $118     $261     $236
  Other                        130       58      284      247
  -------------------------------------------------------------
  Total                       $292     $176     $545     $483
  --------------------------===================================
  
  ------------
  * Because of the loss from continuing  operations for the quarter, the number of
  shares used to compute  earnings per share does not reflect the dilution  caused
  by stock  options  and  restricted  stock  grants of  approximately  2.6 million
  shares.
  
                                         8
  NOTE 7 - SEGMENT INFORMATION
  
  Operating segments reflect CIGNA's internal reporting structure and are based on
  differences  in products,  except the  International  Life,  Health and Employee
  Benefits segment, which is based on geography.  CIGNA uses operating income (net
  income excluding after-tax realized investment results,  results of discontinued
  operations and, in 1999, the cumulative  effect of adopting SOP 97-3) to measure
  the financial results of its segments.  Summarized segment financial information
  was as follows:
  ----------------------------------------------------------------------------------------
                                             Three Months                Nine Months
                                                 Ended                      Ended
                                             September 30,               September 30,
  (In millions)                           1999          1998          1999          1998
  ----------------------------------------------------------------------------------------
  Premiums and fees
    and other revenues:
  Employee Health Care,
    Life and Disability Benefits        $3,288        $3,006        $9,643        $8,845
  Employee Retirement
    Benefits and Investment
    Services                                70            54           203           198
  International Life, Health
    and Employee Benefits                  409           300         1,274           887
  Other Operations                         213           164           654           848
  Corporate                                (42)          (30)         (121)          (79)
  ----------------------------------------------------------------------------------------
  Total                                 $3,938        $3,494       $11,653       $10,699
  -------------------------------------===================================================
  Income (loss) from continuing
    operations:
  Operating income (loss):
  Employee Health Care,
    Life and Disability  Benefits         $182          $159          $512          $433
  Employee Retirement
    Benefits and Investment
    Services                                66            63           196           184
  International Life, Health
    and Employee Benefits                 (397)           14          (350)           30
  Other Operations                          33            30           100           292
  Corporate                                 (8)          (29)          (59)          (66)
                                       ---------------------------------------------------
  Total operating income (loss)           (124)          237           399           873
  Realized investment gains
    (losses), net of taxes                  (8)           27             8            79
  ----------------------------------------------------------------------------------------
  Income (loss) from continuing
    operations                           $(132)         $264          $407          $952
  -------------------------------------===================================================
  NOTE 8 - COST REDUCTION INITIATIVES
  
  During  the third  quarter  of 1999,  CIGNA  adopted  a plan for cost  reduction
  initiatives  subsequent  to the  sale of the  property  and  casualty  business.
  Adoption of the plan  resulted in a pre-tax  charge of $15 million  ($10 million
  after-tax),  primarily for severance  expenses,  which was recorded in Corporate
  ($7 million after-tax) and the International  Life, Health and Employee Benefits
  segment  ($3  million  after-tax).   CIGNA  expects  to  substantially  complete
  implementation of this plan by mid-2000.
  
  NOTE 9 - CONTINGENCIES AND OTHER MATTERS
  
  Financial Guarantees
  
  CIGNA,  through its subsidiaries,  is contingently  liable for various financial
  guarantees  provided in the  ordinary  course of business.  For  example,  CIGNA
  guarantees  the  repayment of  industrial  revenue  bonds and a minimum level of
  benefits for certain separate account contracts. In addition,  CIGNA has entered
  into specialty life reinsurance  contracts that guarantee payments for specified
  unfavorable  changes in variable  annuity  account  values  based on  underlying
  mutual fund  investments if account holders expire or elect to receive  periodic
  income payments.
  
  Although the  ultimate  outcome of any loss  contingencies  arising from CIGNA's
  financial  guarantees  may  adversely  affect  results of  operations  in future
  periods,  they are not  expected  to have a material  adverse  effect on CIGNA's
  liquidity or financial condition.
  
                                         9
  Regulatory and Industry Developments
  
  CIGNA's  businesses  are  subject  to  a  changing  social,   economic,   legal,
  legislative and regulatory  environment.  Some of the more  significant  current
  issues that may affect CIGNA's businesses include:
  
  o    efforts to expand tort liability of health plans;
  o    proposed class action lawsuits targeting the health care industry's efforts
       to deliver quality care at affordable costs;
  o    initiatives to increase health care regulation; and
  o    initiatives  to  restrict   insurance   pricing  and  the   application  of
       underwriting standards.
  
  Pending  initiatives  to increase  health care  regulation  at the federal level
  include  "managed care reform" and "patients' bill of rights"  legislation.  The
  bill  that  recently  passed  the House of  Representatives  would  expand  tort
  liability  for health  plans and  change  the  practices  for  defining  medical
  necessity.  The corresponding bill that recently passed the Senate lacks similar
  provisions.  Given these differences  between the House and Senate bills and the
  general  uncertainty of the political  process,  it is not possible to determine
  what, if any, legislation will ultimately be enacted or what the effect on CIGNA
  of any such legislation would be.
  
  Several of CIGNA's health care industry  competitors  recently have had proposed
  class  action  lawsuits  filed  against  them  by  a  coalition  of  plaintiffs'
  attorneys.  CIGNA expects that similar lawsuits could be filed against it. Given
  that no such  lawsuits  are  currently  pending  against  CIGNA  and  given  the
  uncertainties  of  predicting  the outcome of  litigation  generally,  it is not
  possible to determine at this time what the ultimate effect, if any, on CIGNA of
  any such litigation would be.
  
  In 1998,  the National  Association  of Insurance  Commissioners  (NAIC) adopted
  risk-based capital guidelines for health maintenance organizations (HMOs). CIGNA
  expects its HMO subsidiaries to be adequately capitalized under these guidelines
  as they become effective in various jurisdictions in 1999.
  
  In 1998, the NAIC adopted standardized  statutory accounting  principles.  Since
  these  principles have not been adopted by most of the insurance  departments of
  various jurisdictions in which CIGNA's insurance subsidiaries are domiciled, the
  timing and effects of implementation have not yet been determined.
  
  The eventual  effect on CIGNA of the changing  environment  in which it operates
  remains uncertain.
  
  Litigation
  
  CIGNA is continuously  involved in numerous lawsuits arising, for the most part,
  in the ordinary course of the business of  administering  and insuring  employee
  benefits programs.  While the outcome of litigation cannot be determined,  CIGNA
  does not expect that litigation  currently  threatened or pending will result in
  losses that differ from  recorded  reserves by amounts that would be material to
  results of operations, liquidity or financial condition.
  
                                         10
  Item 2.       Management's Discussion and Analysis of
                Financial Condition and Results of Operations
  
  INTRODUCTION
  
  The following  discussion addresses the financial condition of CIGNA Corporation
  (CIGNA) as of  September  30, 1999,  compared  with  December 31, 1998,  and its
  results of operations for the quarter and nine months ended  September 30, 1999,
  compared  with the same periods  last year.  This  discussion  should be read in
  conjunction with  Management's  Discussion and Analysis included in CIGNA's 1998
  Annual  Report to  Shareholders  (pages 10 through  24),  to which the reader is
  directed for additional  information.  Due to the seasonality of certain aspects
  of CIGNA's business,  caution should be used in estimating  results for the full
  year based on interim results of operations.
  
  Acquisitions and Dispositions
  
  On July 2, 1999, CIGNA sold its domestic and international property and casualty
  business to ACE Limited for cash proceeds of $3.45  billion.  CIGNA reports this
  business as discontinued  operations and has reclassified prior period financial
  information.  CIGNA recognized the after-tax gain on sale of approximately  $1.2
  billion in discontinued operations in the third quarter.  CIGNA's priorities for
  use  of  capital,  including  proceeds  from  the  sale,  are  internal  growth,
  acquisitions, and share repurchases.
  
  In the third  quarter of 1999,  CIGNA  recognized  an  after-tax  charge of $400
  million attributable to certain Brazilian  investments.  See page 15 for further
  discussion.
  
  In  April  1999,  CIGNA  sold a 29%  interest  in its  Japanese  life  insurance
  operations  to Yasuda Fire & Marine  Insurance  Company Ltd.,  reducing  CIGNA's
  ownership interest to 61%. Proceeds of the sale were $105 million. The after-tax
  gain was $43  million  and is reported  in the  International  Life,  Health and
  Employee Benefits segment.
  
  As of January 1, 1998,  CIGNA sold its  individual  life  insurance  and annuity
  business for cash  proceeds of $1.4  billion.  The sale resulted in an after-tax
  gain of  approximately  $770 million of which $202 million was  recognized  upon
  closing of the sale.  Since the principal  agreement to sell this business is in
  the  form of an  indemnity  reinsurance  arrangement,  the  remaining  gain  was
  deferred and is being  recognized  at the rate that  earnings  from the business
  sold would have been  expected  to emerge,  primarily  over  fifteen  years on a
  declining  basis.  CIGNA  recognized $15 million and $17 million of the deferred
  gain in the third quarters of 1999 and 1998, and $46 million and $50 million for
  the nine months ended September 30, 1999 and 1998, respectively.
  
  CIGNA will continue to conduct strategic and financial reviews of its businesses
  in order to deploy its capital  most  effectively.  See Note 3 to the  Financial
  Statements for additional information on acquisitions and dispositions.
  
  Other Matters
  
  CIGNA's  businesses  are  subject  to  a  changing  social,   economic,   legal,
  legislative and regulatory  environment.  Some of the more  significant  current
  issues that may affect CIGNA's businesses include:
  
  o    efforts to expand tort liability of health plans;
  o    proposed class action lawsuits targeting the health care industry's efforts
       to deliver quality care at affordable costs;
  o    initiatives to increase health care regulation; and
  o    initiatives  to  restrict   insurance   pricing  and  the   application  of
       underwriting standards.
  
  Pending  initiatives  to increase  health care  regulation  at the federal level
  include  "managed care reform" and "patients' bill of rights"  legislation.  The
  bill  that  recently  passed  the House of  Representatives  would  expand  tort
  liability  for health  plans and  change  the  practices  for  defining  medical
  necessity.  The corresponding bill that recently passed the Senate lacks similar
  provisions.  Given these differences  between the House and Senate bills and the
  general  uncertainty of the political  process,  it is not possible to determine
  what, if any, legislation will ultimately be enacted or what the effect on CIGNA
  of any such legislation would be.
  
                                         11
  Several of CIGNA's health care industry  competitors  recently have had proposed
  class  action  lawsuits  filed  against  them  by  a  coalition  of  plaintiffs'
  attorneys.  CIGNA expects that similar lawsuits could be filed against it. Given
  that no such  lawsuits  are  currently  pending  against  CIGNA  and  given  the
  uncertainties  of  predicting  the outcome of  litigation  generally,  it is not
  possible to determine at this time what the ultimate effect, if any, on CIGNA of
  any such litigation would be.
  
  The eventual  effect on CIGNA of the changing  environment  in which it operates
  remains  uncertain.  For  additional  information,  see Note 9 to the  Financial
  Statements.
  
  Recent Accounting Pronouncements
  
  CIGNA adopted  Statement of Position  (SOP) 97-3,  "Accounting  by Insurance and
  Other Enterprises for Insurance-Related  Assessments" as of January 1, 1999. SOP
  97-3, issued by the American Institute of Certified Public Accountants  (AICPA),
  provides guidance on the recognition and measurement of liabilities for guaranty
  fund and  other  insurance-related  assessments  such as  workers'  compensation
  second  injury  funds,  medical  risk pools and  charges  related  to  operating
  expenses of state regulatory  bodies.  The cumulative effect of adopting the SOP
  was a reduction  of net income of $91 million  ($140  million  pre-tax),  and is
  primarily  related to the property and casualty  business,  which CIGNA sold and
  reports as discontinued operations, as discussed above.
  
  In 1999, CIGNA adopted SOP 98-1,  "Accounting for the Costs of Computer Software
  Developed or Obtained for Internal Use." SOP 98-1,  issued by the AICPA in 1998,
  specifies the types of costs that must be  capitalized  and  amortized  over the
  software's expected useful life and the types of costs which must be immediately
  recognized  as  expense.  Implementation  of this  pronouncement  did not have a
  material effect on results of operations, liquidity or financial condition.
  
  In 1998, the Financial  Accounting Standards Board issued Statement of Financial
  Accounting Standards (SFAS) No. 133, "Accounting for Derivative  Instruments and
  Hedging  Activities."  SFAS No. 133 requires that derivatives be reported on the
  balance  sheet at fair value.  Changes in fair value are to be recognized in net
  income or, for  derivatives  that are hedging market risk related to future cash
  flows, in the accumulated  other  comprehensive  income section of shareholders'
  equity.  Implementation  is  required  by the first  quarter  of 2001,  with the
  cumulative  effect of adoption  reflected  in net income and  accumulated  other
  comprehensive  income,  as  appropriate.  CIGNA has not determined the effect or
  timing of implementation of this pronouncement.
  
  Cost Reduction Initiatives
  
  During  the third  quarter  of 1999,  CIGNA  adopted  a plan for cost  reduction
  initiatives  subsequent  to the  sale of the  property  and  casualty  business.
  Adoption of the plan  resulted in a pre-tax  charge of $15 million  ($10 million
  after-tax),  primarily for severance  expenses,  which was recorded in Corporate
  ($7 million after-tax) and the International  Life, Health and Employee Benefits
  segment  ($3  million  after-tax).   CIGNA  expects  to  substantially  complete
  implementation of this plan by mid-2000.
  
  RESULTS OF CONTINUING OPERATIONS
  -----------------------------------------------------------------------------------
  FINANCIAL SUMMARY                     Three Months                 Nine Months
                                           Ended                        Ended
                                        September 30,               September 30,
  (In millions)                      1999          1998          1999          1998
  -----------------------------------------------------------------------------------
  Premiums and fees                $3,781        $3,344       $11,092        $9,914
  Net investment income               762           766         2,217         2,344
  Other revenues                      157           150           561           785
  Realized investment
    gains (losses)                    (11)           42            13           121
                                   --------------------------------------------------
  Total revenues                    4,689         4,302        13,883        13,164
  Benefits and expenses             4,752         3,890        13,109        11,684
                                   --------------------------------------------------
  Income (loss) before taxes          (63)          412           774         1,480
  Income taxes                         69           148           367           528
                                   --------------------------------------------------
  Income (loss) from
    continuing operations            (132)          264           407           952
  Realized investment
    (gains) losses, net
    of taxes                            8           (27)           (8)          (79)
  -----------------------------------------------------------------------------------
  Operating income (loss)*          $(124)         $237          $399          $873
  ---------------------------------==================================================
  --------
  * Operating  income (loss) is defined as net income (loss)  excluding  after-tax
  realized  investment results,  results of discontinued  operations and, in 1999,
  the cumulative effect of adopting SOP 97-3.
  
                                         12
  CIGNA's consolidated  operating income (as defined in the footnote above on page
  12) included certain nonrecurring items. The most significant nonrecurring items
  and operating  income excluding these items  ("adjusted  operating  income") are
  presented in the table below:
  
  -----------------------------------------------------------------------
                                     Three Months         Nine Months
                                        Ended                Ended
                                     September 30,       September 30,
  (In millions)                    1999       1998      1999       1998
  -----------------------------------------------------------------------
  Operating income (loss)         $(124)      $237      $399       $873
  Charge related to certain
    Brazilian investments           400         --       400         --
  Restructuring costs                10         --        10         --
  Gain on sale of partial
    interest in Japanese
    life insurance operations        --         --       (43)        --
  Gain on sale of individual
    life insurance and
    annuity business                 --         --        --       (202)
  -----------------------------------------------------------------------
  Adjusted operating income        $286       $237      $766       $671
  -------------------------------========================================
  
  The increase in adjusted  operating  income for the third quarter and nine month
  periods primarily reflects improved operating results in CIGNA's Employee Health
  Care,  Life and Disability  Benefits  segment and investment  income on proceeds
  from the sale of the property and casualty business.
  
  After-tax  realized  investment results of the continuing  operations  decreased
  significantly  in the third  quarter  and nine  months of 1999  versus  the same
  periods last year.  These  decreases  primarily  reflect lower gains on sales of
  fixed maturities, real estate partnerships and equity securities. For additional
  information, see Note 4 to the Financial Statements.
  
  Excluding the  nonrecurring  items presented  above,  full year operating income
  (which excludes  results of  discontinued  operations) is expected to improve in
  1999 over 1998;  however,  such improvement  could be adversely  affected by the
  factors noted in the cautionary statement on page 20.
  
  EMPLOYEE HEALTH CARE, LIFE AND DISABILITY BENEFITS
  
  ------------------------------------------------------------------------
  FINANCIAL SUMMARY               Three Months            Nine Months
                                     Ended                   Ended
                                  September 30,           September 30,
  (In millions)                1999         1998        1999        1998
  ------------------------------------------------------------------------
  Premiums and fees          $3,139       $2,870      $9,179      $8,443
  Net investment income         141          152         428         437
  Other revenues                149          136         464         402
                            ----------------------------------------------
  Segment revenues            3,429        3,158      10,071       9,282
  Benefits and expenses       3,146        2,904       9,279       8,594
                            ----------------------------------------------
  Income before taxes           283          254         792         688
  Income taxes                  101           95         280         255
                            ----------------------------------------------
  Operating income             $182         $159        $512        $433
  --------------------------==============================================
  Realized investment gains
    (losses),  net of taxes     $(6)         $19          $3         $55
  --------------------------==============================================
  
  Operating  income for the Employee  Health Care,  Life and  Disability  Benefits
  segment  increased  14% and 18% for the third  quarter  and nine  months of 1999
  compared with the same periods last year. Operating income for the Indemnity and
  HMO operations was as follows:
  
  ----------------------------------------------------------
                           Three Months        Nine Months
                               Ended              Ended
                           September 30,      September 30,
  (In millions)            1999     1998     1999     1998
  ----------------------------------------------------------
  Indemnity operations      $78      $77     $219     $219
  HMO operations            104       82      293      214
  ----------------------------------------------------------
  Total                    $182     $159     $512     $433
  -----------------------===================================
  
  Indemnity  results  for the third  quarter of 1999  primarily  reflect  improved
  Administrative Services Only (ASO) and group life and accident businesses offset
  by  lower  earnings  on  experience-rated   medical  and  long-term   disability
  businesses.  The results for the nine months also  reflect  improved  guaranteed
  cost medical claims experience.
  
  HMO operating  results for the third quarter and nine months of 1999 include net
  favorable  after-tax  adjustments  of $6 million and $18 million,  respectively,
  from account and tax reviews.  HMO results for the third quarter and nine months
  of 1998  include  net  favorable  after-tax  adjustments  of $1 million  and net
  unfavorable after-tax adjustments of $5 million, respectively,  from account and
  tax reviews. Excluding these items,
  
                                         13
  HMO operating  results reflect  improvement in health care services  operations,
  rate increases for guaranteed  cost HMO business,  and membership  growth in HMO
  experience-rated and alternative funding business.
  
  Premiums and fees  increased  9% for the third  quarter and nine months of 1999,
  primarily due to HMO and medical indemnity membership growth and rate increases.
  
  Net investment  income  decreased 7% for the quarter and 2% for the nine months,
  reflecting lower investment yields.
  
  As of September 30, 1999,  HMO  membership  totaled  approximately  6.7 million,
  representing  increases of 4% since September 30, 1998 and 3% since December 31,
  1998. These increases  primarily reflect  membership growth in  experience-rated
  and alternative  funding  programs,  partially  offset by declines in guaranteed
  cost HMO membership.  Under alternative  funding programs,  the customer assumes
  all or a portion of the  responsibility  for funding the payment of claims,  and
  CIGNA generally earns a lower margin than under traditional programs.
  
  Management  believes  that  adding  premium  equivalents  to  premiums  and fees
  (adjusted  premiums  and fees)  produces a more  meaningful  measure of business
  volume.  Premium  equivalents  generally represent paid claims under alternative
  funding programs, such as minimum premium and ASO plans. Premium equivalents for
  the third  quarter and nine months of 1999 were $4.0 billion and $11.4  billion,
  respectively. These amounts represent increases of 22% and 18% compared with the
  same periods last year. These increases primarily reflect HMO and PPO (Preferred
  Provider  Organization)  membership growth. Premium equivalents were 55% and 53%
  of total  adjusted  premiums  and fees for the  nine  months  of 1999 and  1998,
  respectively.   Premium   equivalents   related  to  ASO  plans   accounted  for
  approximately  51% and 49% of  total  adjusted  premiums  and  fees for the nine
  months of 1999 and 1998.
  
  EMPLOYEE RETIREMENT BENEFITS AND INVESTMENT SERVICES
  
  --------------------------------------------------------------------
  FINANCIAL SUMMARY             Three Months           Nine Months
                                    Ended                 Ended
                                September 30,         September 30,
  (In millions)               1999        1998       1999       1998
  --------------------------------------------------------------------
  Premiums and fees            $70         $54       $203       $198
  Net investment income        409         389      1,199      1,213
                            ------------------------------------------
  Segment revenues             479         443      1,402      1,411
  Benefits and expenses        382         352      1,113      1,141
                            ------------------------------------------
  Income before taxes           97          91        289        270
  Income taxes                  31          28         93         86
                            ------------------------------------------
  Operating income             $66         $63       $196       $184
  --------------------------==========================================
  Realized investment
    gains (losses), net
    of taxes                   $(1)         $6         $6        $19
  --------------------------==========================================
  
  The increases in operating  income for the third quarter and nine months of 1999
  are due to higher earnings from an increased asset base,  partially  offset by a
  shift to lower margin products (separate account equity funds). Operating income
  for the nine months of 1999 also  includes  favorable  nonrecurring  adjustments
  totaling $3 million after-tax.
  
  Premiums and fees for the third  quarter and nine months of 1999  increased  30%
  and 3%,  respectively,  compared  with the same  periods  last  year,  primarily
  reflecting  higher fees from  separate  accounts  partially  offset for the nine
  months by lower annuity sales.
  
  Net  investment  income  increased 5% and decreased 1% for the third quarter and
  nine months of 1999, respectively, primarily reflecting higher investment yields
  for the quarter and lower investment yields for the nine months.
  
                                         14
  Assets under  management  are generally a key  determinant  of earnings for this
  segment.  For the nine months ended  September 30, assets under  management  and
  related activity,  including amounts attributable to separate accounts,  were as
  follows:
  
  ---------------------------------------------------------------------
  (In millions)                                 1999             1998
  ---------------------------------------------------------------------
  Balance - January 1                        $52,929          $48,231
  Premiums and deposits                        6,292            6,073
  Investment results                           2,785            2,234
  Decrease in fair value of assets              (898)             (21)
  Customer withdrawals                        (3,780)          (2,922)
  Other, including participant
    withdrawals and benefit payments          (4,505)          (4,321)
  ---------------------------------------------------------------------
  Balance - September 30                     $52,823          $49,274
  =====================================================================
  
  For the nine months of 1999 and 1998,  approximately 63% and 54%,  respectively,
  of premiums and deposits  reflect  recurring  deposits from  existing  customers
  while the remaining  amounts represent sales to new customers and new plan sales
  to existing  customers.  Investment  results increased 25% in the nine months of
  1999 due to higher realized capital gains and growth in assets, partially offset
  by lower investment yields. The fair value of assets decreased more in 1999 than
  in 1998  primarily due to market value  depreciation  of fixed  maturities.  The
  increase in customer  withdrawals  is primarily due to the effect of withdrawals
  of defined contribution business in the first quarter of 1999.
  
  Assets  under   management   will  continue  to  be  affected  by  market  value
  fluctuations for fixed maturities and equity securities.
  
  INTERNATIONAL LIFE, HEALTH AND EMPLOYEE BENEFITS
  
  ----------------------------------------------------------------------------
  FINANCIAL SUMMARY                 Three Months              Nine Months
                                        Ended                    Ended
                                    September 30,            September 30,
  (In millions)                  1999         1998         1999         1998
  ----------------------------------------------------------------------------
  Premiums and fees              $409         $300       $1,203         $886
  Net investment income            29           27           91           83
  Other revenues                   --           --           71            1
                              ------------------------------------------------
  Segment revenues                438          327        1,365          970
  Benefits and expenses           911          306        1,757          924
                              ------------------------------------------------
  Income (losses) before
    taxes                        (473)          21         (392)          46
  Income taxes (benefits)         (76)           7          (42)          16
                              ------------------------------------------------
  Operating income (loss)       $(397)         $14        $(350)         $30
  ----------------------------================================================
  Realized investment
    losses, net of taxes          $--          $(2)         $(1)         $(2)
  ----------------------------================================================
  
  Operating income (loss) for the International Life, Health and Employee Benefits
  segment included certain nonrecurring items indicated in the table below:
  
  -----------------------------------------------------------------------
                                     Three Months         Nine Months
                                        Ended                Ended
                                    September 30,         September 30,
  (In millions)                    1999       1998      1999       1998
  -----------------------------------------------------------------------
  Operating income (loss)         $(397)       $14     $(350)       $30
  Charge related to certain
    Brazilian investments           400         --       400         --
  Restructuring costs                 3         --         3         --
  Gain on sale of partial
    interest in Japanese life
    insurance operations             --         --       (43)        --
  -----------------------------------------------------------------------
  Adjusted operating income          $6        $14       $10        $30
  -------------------------------========================================
  
  During the third  quarter of 1999,  CIGNA  completed  a review of its  Brazilian
  operations (including analyses of future estimated cash flows). These operations
  consist primarily of a health care operation and a managed health care business.
  As a result of the  review,  CIGNA  decided to  withdraw  from the  health  care
  operation but will continue to operate the managed  health care  business.  This
  review resulted in an aggregate after-tax charge of $400 million,  consisting of
  the following items:
  
  o    $305 million for the carrying value of the health care operation from which
       CIGNA is withdrawing,  certain loans  guaranteed by CIGNA,  and exit costs;
       and
  
                                         15
  o    $95 million for impairment of other investments, primarily goodwill.
  
  CIGNA's withdrawal from the health care operation could be challenged. While the
  outcome of any regulatory or legal actions cannot be determined,  CIGNA does not
  expect  that such  actions  would  result in losses  material  to its results of
  operations, liquidity or financial condition.
  
  The decline for the quarter in adjusted operating income primarily reflects less
  favorable claim experience in the health care business for expatriate  employees
  of  multinational  companies and unfavorable  mortality  experience in the group
  life  business,  partially  offset by  favorable  growth and  product mix in the
  Japanese life  operations.  The decline for the nine months also reflects losses
  of $15 million  after-tax for the  Brazilian  health care  operation  from which
  CIGNA is withdrawing.
  
  Premiums and fees  increased  36% for the third  quarter and nine months of 1999
  compared with the same periods last year.  Excluding  premiums and fees from the
  retained  Brazilian managed health care business (which were included in results
  beginning with the fourth  quarter of 1998) and the effects of foreign  currency
  changes,  premiums and fees increased 17% and 21% for the third quarter and nine
  months of 1999,  respectively.  These increases  reflect growth in Japanese life
  insurance operations and, to a lesser extent,  growth in life and group benefits
  business in Southeast  Asia, as well as higher health care premiums and fees for
  expatriate employees of multinational companies.
  
  CIGNA expects to pursue  international  growth  through  acquisitions  and other
  investments.  CIGNA expects this growth to result in additional  start-up  costs
  and initial losses.
  
  OTHER OPERATIONS
  
  ----------------------------------------------------------------------------
  FINANCIAL SUMMARY                  Three Months            Nine Months
                                        Ended                   Ended
                                     September 30,           September 30,
  (In millions)                    1999         1998        1999        1998
  ----------------------------------------------------------------------------
  Premiums and fees                $163         $120        $507        $387
  Net investment income             140          193         447         587
  Other revenues                     50           44         147         461
                                 ---------------------------------------------
  Segment revenues                  353          357       1,101       1,435
  Benefits and expenses             303          310         948         985
                                 ---------------------------------------------
  Income before taxes                50           47         153         450
  Income taxes                       17           17          53         158
                                 ---------------------------------------------
  Operating income                   33           30         100         292
  Gain on sale of
    individual life
    insurance and annuity
    business                         --           --          --        (202)
                                 ---------------------------------------------
  Adjusted operating income         $33          $30        $100         $90
  -------------------------------=============================================
  Realized investment
    gains (losses), net of
    taxes                           $(1)          $4         $--          $7
  -------------------------------=============================================
  
  Other Operations consist of:
  o    deferred  gain  recognition  related  to the  sale of the  individual  life
       insurance and annuity business;
  o    corporate life insurance on which policy loans are  outstanding  (leveraged
       corporate life insurance);
  o    life, accident and health reinsurance operations;
  o    settlement annuity business; and
  o    certain new business initiatives.
  
  The  increase in adjusted  operating  income for the quarter  reflects  improved
  health  reinsurance  results  partially  offset by lower  income from  leveraged
  corporate  life  insurance  business due to  increased  policy  surrenders.  The
  improved  results for the nine months of 1999  reflect  growth in the  specialty
  life  reinsurance  business  partially  offset by the  reductions  in  leveraged
  corporate life insurance business.
  
  The 36% and 31%  increases in premiums  and fees for the third  quarter and nine
  months of 1999 are primarily due to growth in the personal accident  reinsurance
  business partially offset by lower health reinsurance premiums.
  
                                         16
  The 27% and 24%  decreases in net  investment  income for the third  quarter and
  nine months of 1999 primarily reflect lower assets from leveraged corporate life
  insurance, and, to a lesser extent, lower yields.
  
  In 1996,  Congress passed  legislation that phased out over a three-year  period
  the tax deductibility of policy loan interest for most leveraged  corporate life
  insurance products.  As a result,  revenues and operating income associated with
  these  products are expected to continue to decline.  For the third  quarter and
  nine months of 1999,  revenues of $84 million and $274  million,  and  operating
  income of $8 million and $27 million  were from  products  that are  affected by
  this legislation.
  
  The specialty life reinsurance  products of this segment include  contracts that
  guarantee payments for specified unfavorable changes in variable annuity account
  values based on underlying  mutual fund investments if account holders expire or
  elect to  receive  periodic  income  payments.  Although  these  guarantees  may
  adversely affect CIGNA's  consolidated  results of operations in future periods,
  they are not expected to have a material adverse effect on CIGNA's  liquidity or
  financial condition.
  
  The  personal   accident   reinsurance   business  of  this   segment   includes
  participation in a workers'  compensation  program managed by Unicover Managers,
  Inc. where disputes have arisen regarding retrocessional coverage. Resolution of
  these disputes is likely to take several  years.  CIGNA does not expect to incur
  losses  material  to  its  consolidated  results  of  operations,  liquidity  or
  financial condition related to this program.
  
  CORPORATE
  
  -----------------------------------------------------------
  FINANCIAL SUMMARY    Three Months           Nine Months
                           Ended                 Ended
                       September 30,         September 30,
  (In millions)       1999       1998       1999       1998
  -----------------------------------------------------------
  Operating loss       $(8)      $(29)      $(59)      $(66)
  -------------------========================================
  
  Corporate  includes amounts not allocated to segments,  such as interest expense
  and intersegment eliminations. The reduced operating losses in the third quarter
  and nine months of 1999 primarily  reflect higher net investment income from the
  proceeds of the sale of the property and casualty business,  partially offset by
  a restructuring  charge of $7 million after-tax recorded in the third quarter of
  1999 for cost reduction initiatives (primarily severance-related costs). Results
  for the third quarter of 1999 and previous  periods  include  certain  corporate
  overhead expenses which had been allocated to the property and casualty business
  (prior to the reporting of this business as discontinued operations).
  
  PROPERTY AND CASUALTY DISCONTINUED OPERATIONS
  
  --------------------------------------------------------------------------------
  FINANCIAL SUMMARY                      Three Months               Nine Months
                                             Ended                     Ended
                                          September 30,            September 30,
  (In millions)                        1999        1998         1999         1998
  --------------------------------------------------------------------------------
  Premiums and fees                     $--        $749       $1,411       $2,195
  Net investment income                  --         145          268          446
  Other revenues                         --          73          136          203
  Realized investment gains
    (losses)                             --         (25)          48            2
                                   -----------------------------------------------
  Total revenues                         --         942        1,863        2,846
  Benefits and expenses                  --         962        1,911        2,695
                                   -----------------------------------------------
  Income (loss) before taxes             --         (20)         (48)         151
  Income taxes (benefits)                --          (7)         (20)          49
                                   -----------------------------------------------
  Income (loss) from operations          --         (13)         (28)         102
  Gain on sale, net of taxes
    of $1,152                         1,194          --        1,194           --
  --------------------------------------------------------------------------------
  Income (loss) from
    discontinued operations          $1,194        $(13)      $1,166         $102
  ---------------------------------===============================================
  
  On July 2, 1999, CIGNA sold its property and casualty business. See Acquisitions
  and  Dispositions  on page 11 for additional  information.  Amounts in the table
  above are excluded from CIGNA's results of continuing operations.
  
  LIQUIDITY AND CAPITAL RESOURCES
  
  Liquidity  for CIGNA  and its  insurance  subsidiaries  has  remained  strong as
  evidenced by  significant  amounts of short-term  investments  and cash and cash
  equivalents   in  the  aggregate.   Generally,   CIGNA  has  met  its  operating
  requirements  by maintaining  appropriate  levels of liquidity in its investment
  portfolio and through utilization of overall positive cash flows.
  
  For the nine months of 1999, cash and cash equivalents of continuing  operations
  decreased $135 million from $2.0 billion as of December 31, 1998.  This decrease
  primarily resulted from
  
                                         17
  payments of dividends on and  repurchases  of CIGNA common stock ($1.8  billion)
  and net withdrawals  from  contractholder  deposit funds ($395  million).  These
  decreases were partially  offset by cash provided by operating  activities ($1.0
  billion),  reflecting  earnings  and the timing of operating  cash  receipts and
  disbursements  and cash provided by investing  activities ($1.1 billion),  which
  includes $3.45 billion  received upon completion of the sale of the property and
  casualty business.
  
  CIGNA's  capital  resources  represent  funds  available for long-term  business
  commitments.  They primarily  consist of retained earnings and proceeds from the
  issuance of long-term debt and equity  securities.  CIGNA's  financial  strength
  provides the capacity and flexibility to enable it to raise funds in the capital
  markets  through the  issuance of such  securities.  CIGNA  continues to be well
  capitalized, with sufficient borrowing capacity to meet the anticipated needs of
  its businesses.
  
  CIGNA had $1.4 billion of long-term  debt  outstanding at September 30, 1999 and
  December  31,  1998,   respectively.   As  of  September  30,  1999,  CIGNA  had
  approximately $1 billion remaining under effective shelf registration statements
  filed with the  Securities  and Exchange  Commission  that may be issued as debt
  securities,  equity  securities or both,  depending  upon market  conditions and
  CIGNA's capital requirements.
  
  At September  30,  1999,  CIGNA's  short-term  debt  amounted to $68 million,  a
  decrease of $204 million from December 31, 1998. The decrease reflects repayment
  of  commercial  paper using  proceeds from the sale of the property and casualty
  business.
  
  CIGNA has repurchased  approximately  27,660,000  shares of its common stock for
  $2.3 billion  during  1999,  including  7,291,900  shares  repurchased  for $539
  million from October 1 through November 1, 1999. On September 22, 1999,  CIGNA's
  Board of Directors authorized an additional $2 billion of share repurchases. The
  total remaining authorization as of November 1, 1999 was $1.46 billion.
  
  INVESTMENT ASSETS - CONTINUING OPERATIONS
  
  -------------------------------------------------------------
                                 September 30,   December 31,
  (In millions)                           1999           1998
  -------------------------------------------------------------
  Fixed maturities                     $23,392        $24,270
  Equity securities                        515            477
  Mortgage loans                         9,830          9,599
  Real estate                              794            733
  Other, primarily policy loans          5,700          6,597
  -------------------------------------------------------------
  Total investment assets              $40,231        $41,676
  =============================================================
  
  Additional information regarding CIGNA's investment assets is included in Note 4
  to the third quarter 1999 Financial  Statements and Notes 2, 4 and 5 to the 1998
  Financial Statements as well as the 1998 Form 10-K.
  
  Investment  assets as of September 30, 1999 decreased 3% from December 31, 1998.
  This decrease  primarily  reflects a $2.8 billion decline in policy loans due to
  surrenders of leveraged  corporate  life  insurance  policies and a $1.4 billion
  reduction  in the fair value of fixed  maturities  due to  increases in interest
  rates, partially offset by $1.9 billion of short-term investments purchased with
  proceeds of the sale of the property and casualty business.
  
  Significant  percentages  of  CIGNA's  investment  assets  are  attributable  to
  experience-rated  contracts with policyholders  (policyholder contracts).  These
  percentages were as follows:
  
  ---------------------------------------------------------------
                            September 30,           December 31,
                                     1999                   1998
  ---------------------------------------------------------------
  Fixed maturities                    40%                    39%
  Mortgage loans                      59%                    57%
  Real estate                         64%                    63%
  ===============================================================
  
  Investments in fixed  maturities  (bonds)  include  publicly  traded and private
  placement debt  securities,  asset-backed  securities  and redeemable  preferred
  stocks.  CIGNA's  mortgage loans are diversified by property type,  location and
  borrower to reduce exposure to potential losses.
  
  Problem bonds and mortgage loans are delinquent or have been  restructured as to
  terms (interest rate or maturity date).
  
  Potential  problem bonds and mortgage  loans include fully current  amounts with
  other characteristics that increase their likelihood of
  
                                         18
  problem  classification.  CIGNA also  considers  mortgage  loans to be potential
  problems if the borrower has requested restructuring or if principal or interest
  payments are past due by more than 30 but fewer than 60 days.
  
  Real estate held for sale primarily comprises properties acquired as a result of
  foreclosure of mortgage loans.
  
  The following  table presents  problem and potential  problem bonds and mortgage
  loans and real estate held for sale, net of valuation  reserves and write-downs,
  and includes amounts attributable to policyholder contracts:
  
  ------------------------------------------------------------------
                                     September 30,    December 31,
  (In millions)                               1999            1998
  ------------------------------------------------------------------
  Problem bonds, including $14 and
    $3, respectively, related to
    emerging market investments               $165            $108
  Potential problem bonds                      $65             $58
  Problem mortgage loans                       $95             $98
  Potential problem mortgage loans            $101             $55
  Real estate held for sale                   $347            $343
  ==================================================================
  
  CIGNA's  investment  asset  write-downs,  non-accruals  and changes in valuation
  reserves  were not  material  to  CIGNA's  policyholder  contracts,  results  of
  operations,   liquidity  or  financial  condition  for  the  periods  presented.
  Additional  investment  losses are  expected  to occur in the  normal  course of
  business.  However, assuming no significant deterioration in economic conditions
  in Latin  America,  Asia or other  geographical  areas,  CIGNA  does not  expect
  additional losses to materially  affect future results of operations,  liquidity
  or financial  condition,  or to result in a significant decline in the aggregate
  carrying value of its assets.
  
  YEAR 2000
  
  CIGNA is highly  dependent  on  automated  systems and systems  applications  in
  conducting its  operations.  These systems include  information  technology (IT)
  systems  that are used for,  among other  things,  processing  claims,  billing,
  collecting  premiums  from  customers,   managing   investment   activities  and
  maintaining  management  information  systems.  If these  systems were unable to
  function because of failing to be Year 2000 ready,  CIGNA's business  operations
  would be  interrupted,  which  could have a material  adverse  effect on CIGNA's
  results of operations.
  
  CIGNA's  Year 2000 efforts  have  included:  1)  identifying  systems  requiring
  remediation;  2)  assessing  what is required to  remediate  those  systems;  3)
  remediating  systems  to be ready  for the Year  2000 (by  either  modifying  or
  replacing them); and 4) testing systems for Year 2000 readiness,  including that
  they properly interface with systems of external parties,  such as customers and
  third-party   administrators.   CIGNA  has  completed  the   identification  and
  assessment  phases  with  respect  to  its  IT  systems  that  are  critical  to
  maintaining  operations  or where the failure of those  systems  would result in
  significant  costs or  disruption of operations  ("mission  critical  systems").
  CIGNA has completed the remediation and testing of its mission critical systems.
  
  CIGNA's  systems  also  include  non-IT  systems,  such as  telephone,  facility
  management  and other systems using  embedded  chips.  These non-IT  systems are
  substantially Year 2000 ready.
  
  CIGNA is using  both  internal  and  external  resources  to meet the  timetable
  established for completion of its Year 2000 efforts. The after-tax costs of Year
  2000  efforts  (including  amounts  related  to  discontinued  operations)  were
  approximately  $100  million in 1998 and are  expected to be  approximately  $40
  million in 1999. Year 2000 after-tax costs for the third quarter and nine months
  of  1999  were   approximately  $15  million  and  $35  million,   respectively.
  Approximately  60% of total Year 2000 costs are attributable to existing systems
  resources  which have been  redirected to the Year 2000  efforts.  The remaining
  amounts  represent  incremental  costs for Year 2000 efforts.  Although  certain
  systems  development  efforts  have been  deferred in order to address Year 2000
  issues, CIGNA does not expect that this deferral will have a significant adverse
  effect on its results of operations or financial condition.
  
  CIGNA has relationships with various third-party entities in the ordinary course
  of business. For example,  CIGNA receives data from clients;  depends on others,
  such as third-party  administrators  and banks,  for services;  and bears credit
  risk on others,  such as  entities  in which it
  
                                         19
  invests.  CIGNA has identified  third-party entities critical to its operations,
  and it is  assessing  and  attempting  to mitigate its risks with respect to the
  potential  failure  of these  entities  to be Year 2000  ready by,  among  other
  things,  reviewing,  where possible,  their formal Year 2000 plans and obtaining
  Year 2000 readiness  affirmations from certain third-party entities. The effect,
  if any, on CIGNA's  results of  operations  from the  failure of these  entities
  (including  entities on which CIGNA bears  credit risk) to be Year 2000 ready is
  not reasonably estimable.
  
  While  CIGNA  expects  that its Year 2000  efforts  will be  successful,  it has
  completed a  comprehensive  analysis of the  operational  problems that would be
  reasonably  likely to result from the failure by CIGNA and certain third parties
  to complete efforts necessary to achieve Year 2000 compliance on a timely basis.
  CIGNA has  historically  had security and backup  policies  and  procedures  for
  safeguarding  critical corporate data, as well as business  continuity plans. It
  is  supplementing  these policies by developing Year 2000  contingency  plans to
  provide  for the  continuity  of  operations  in the event of Year 2000  systems
  failures or the failure of third-party entities to be Year 2000 ready. CIGNA has
  completed these contingency  plans for the most critical  functions of its major
  businesses and expects them to be ready for implementation by the end of 1999.
  
  The costs of CIGNA's Year 2000 efforts and the dates on which CIGNA  believes it
  will complete such efforts are based on management's best estimates,  which were
  derived  using  numerous  assumptions  regarding  future  events,  including the
  continued availability of certain resources,  third-party remediation plans, and
  other factors.  There can be no assurance that these  estimates will prove to be
  accurate,  and actual  results  could  differ  materially  from those  currently
  anticipated.  Specific  factors  that  could  cause  such  material  differences
  include, but are not limited to, the availability and costs of personnel trained
  in Year 2000 issues,  the ability to identify,  assess,  remediate  and test all
  relevant  computer  codes and  embedded  technology,  the risk  that  reasonable
  testing will not uncover all Year 2000 problems, and similar uncertainties.
  
  CAUTIONARY  STATEMENTS  FOR  PURPOSES  OF THE "SAFE  HARBOR"  PROVISIONS  OF THE
  PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
  
  CIGNA  and its  representatives  may  from  time to time  make  written  or oral
  forward-looking  statements,  including  statements contained in CIGNA's filings
  with the Securities and Exchange  Commission and in its reports to shareholders.
  In  connection  with the "safe  harbor"  provisions  of the  Private  Securities
  Litigation  Reform Act of 1995,  CIGNA  cautions the reader that actual  results
  could differ  materially from those contained in any  forward-looking  statement
  made by or on behalf of CIGNA, depending on the outcome of certain factors (some
  of which  are  described  with the  forward-looking  statements)  including:  1)
  increases  in  medical  costs  in  CIGNA's  health  care  operations,  including
  increases in utilization and costs of medical  services;  2) increased  medical,
  administrative  or  other  costs  resulting  from  legislative,  regulatory  and
  potential litigation challenges to CIGNA's health care business (see page 11 for
  more information);  3) heightened  competition,  particularly price competition,
  reducing  product  margins and  constraining  growth in CIGNA's  businesses;  4)
  significant  changes in interest  rates;  5) significant  stock market  declines
  resulting in payments  contingent on certain variable annuity account values; 6)
  the  effect on  CIGNA's  international  operations  and  investments  of further
  significant  deterioration  in  Latin  American  and  Asian  economies;  and  7)
  proposals to change federal income taxes. CIGNA cautions that the foregoing list
  of important factors may not be complete. CIGNA does not undertake to update any
  forward-looking  statement that may be made from time to time by or on behalf of
  CIGNA.
  
                                         20
  Part II.  OTHER INFORMATION
  
  Item 6.   Exhibits and Reports on Form 8-K.
  
            (a)  See Exhibit Index.
  
            (b)  During the quarterly  period ended  September 30, 1999, and as of
                 the filing date, CIGNA filed the following Reports on Form 8-K:
  
                 o    dated  November 1, 1999,  Item 5 - containing a news release
                      regarding its third quarter 1999 results.
  
                 o    dated  August 2, 1999,  Item 5 -  containing  a news release
                      regarding its second quarter 1999 results.
  
                 o    dated  July 2,  1999,  Item 2 -  containing  a news  release
                      regarding  the  completion  of the sale of its  domestic and
                      international   property  and  casualty  businesses  to  ACE
                      Limited.
  
                                         21
  SIGNATURE
  
  Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
  registrant  has duly  caused this  report to be signed by the  undersigned  duly
  authorized officer, on its behalf and in the capacity indicated.
  
                                                  CIGNA CORPORATION
  
                                                  By: /s/James A. Sears
                                                      ----------------------------
                                                      James A. Sears
                                                      Vice President and
                                                      Chief Accounting Officer
  
  Date:    November  5, 1999
  
                                         22
  Exhibit Index
                                    -------------
  
                                                             Method of
  Number      Description                                     Filing
  ------      -----------                                     ------
  
  12          Computation of Ratio of                     Filed herewith
              Earnings to Fixed Charges
  
  27          Financial Data Schedule                     Included only in
                                                          the EDGAR version of
                                                          the Form 10-Q
  
                                         23