UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q


(Mark  One)
|X|  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR  15(d)  OF THE SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended            June 30, 2001
                                 --------------------------------------

OR

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

For the transaction period from                     to
                                ------------------       --------------------

Commission file number                       333-64473
                                 ----------------------------------

                              GWL&A FINANCIAL INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)
--------------------------------------------------------------------------------

          Colorado                                    84-1474245
------------------------------------    ----------------------------------------
 (State or other jurisdiction of         (I.R.S. Employer Identification Number)
  incorporation or organization)


               8515 East Orchard Road, Greenwood Village, CO 80111
  ----------------------------------------------------------------------------
                    (Address of principal executive offices)
                                   (Zip Code)

                                 (303) 737-4128
  ----------------------------------------------------------------------------
              (Registrants telephone number, including area code)


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

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

As of June 30,  2001,  50,025  shares  of the  registrants  common  stock  were
outstanding, all of which were owned by the registrants parent company.

NOTE:  This Form 10-Q is filed by the registrant only as a consequence of the
       sale by the registrant of a market value adjusted annuity product.




                                                  TABLE OF CONTENTS


Part I       FINANCIAL INFORMATION
                                                                       ---------
             Item 1   Financial Statements

                      Consolidated Statements of Income

                      Consolidated Balance Sheets

                      Consolidated Statements of Cash Flows

                      Consolidated Statements of Stockholders Equity

                      Notes to Consolidated Financial Statements

             Item 2   Managements Discussion and Analysis of Financial
                      Condition and Results of Operations

Part II      OTHER INFORMATION

             Item 1   Legal Proceedings

             Item 6   Exhibits and Reports on Form 8-K

             Signature




PART I     FINANCIAL INFORMATION

ITEM 1     FINANCIAL STATEMENTS

GWL&A FINANCIAL INC.

CONSOLIDATED STATEMENTS OF INCOME
[Dollars in Thousands]
--------------------------------------------------------------------------------
[Unaudited]
<TABLE>
<CAPTION>
<S>                                      <C>                <C>                 <C>                <C>
                                                    Three Months Ended                     Six Months Ended
                                                         June 30,                              June 30,
                                             ---------------------------------- -- ----------------------------------
                                                 2001                2000               2001               2000
                                             --------------     ---------------    ---------------     --------------
REVENUES:
  Premium income                         $         262,900  $         318,407   $        597,330   $         671,143
  Fee income                                       231,601            213,229            482,850             424,863
  Net investment income                            244,657            228,019            485,332             458,419
  Net realized gains on
    investments                                      1,264              9,154              8,932              10,491
                                             --------------     ---------------    ---------------     --------------

                                                   740,422            768,809          1,574,444           1,564,916
                                             --------------     ---------------    ---------------     --------------

BENEFITS AND EXPENSES:
  Life and other policy benefits                   246,676            287,725            531,916             569,096
  (Decrease) increase in reserves                  (12,656)             3,953             29,315              29,511
  Interest paid or credited
    to contractholders                             133,038            109,235            266,822             234,929
  Provision for policyholders
    share of earnings on
    participating business                             723              2,176              2,311               4,454
  Dividends to policyholders                        16,165             15,341             39,526              37,972
                                             --------------     ---------------    ---------------     --------------

                                                   383,946            418,430            869,890             875,962
                                             --------------     ---------------    ---------------     --------------

  Commissions                                       46,951             52,660             94,230              99,080
  Operating expenses                               213,965            176,309            416,099             378,241
  Premium taxes                                      6,449             15,683             13,593              24,432
  Special charges                                  127,040                               127,040
                                             --------------     ---------------    ---------------     --------------

                                                   778,351            663,082          1,520,852           1,377,715
                                             --------------     ---------------    ---------------     --------------

INCOME BEFORE INCOME
  TAXES                                            (37,929)           105,727             53,592             187,201

PROVISION FOR INCOME
  TAXES:
    Current                                         44,685             24,531             57,725              37,144
    Deferred                                       (60,941)            12,817            (41,911)             28,962
                                             --------------     ---------------    ---------------     --------------

                                                   (16,256)            37,348             15,814              66,106
                                             --------------     ---------------    ---------------     --------------

NET INCOME                               $         (21,673) $          68,379   $         37,778   $         121,095
                                             ==============     ===============    ===============     ==============
</TABLE>


See notes to consolidated financial statements.



GWL&A FINANCIAL INC.

CONSOLIDATED BALANCE SHEETS
[Dollars in Thousands]
--------------------------------------------------------------------------------
[unaudited]
<TABLE>
<CAPTION>
<S>                                                                 <C>                      <C>
                                                                             June 30,               December 31,
ASSETS                                                                         2001                     2000
                                                                        --------------------    ---------------------

INVESTMENTS:

  Fixed Maturities:
    Available-for-sale, at fair value
      (amortized cost $9,637,689 and $9,372,009)                    $          9,755,527     $         9,419,865
  Mortgage loans on real estate, net                                             765,291                 843,371
  Common stock                                                                    91,748                  95,036
  Real estate, net                                                               107,378                 106,690
  Policy loans                                                                 2,906,384               2,809,973
  Short-term investments, available-for-sale
    (amortized cost $344,456 and $414,860)                                       333,403                 414,860
                                                                        --------------------    ---------------------

    Total investments                                                         13,959,731              13,689,795

  Cash                                                                           160,505                 156,388
  Reinsurance receivable                                                         226,570                 233,968
  Deferred policy acquisition costs                                              268,002                 279,688
  Investment income due and accrued                                              122,942                 139,155
  Uninsured claims receivable                                                    100,752                 227,803
  Other assets                                                                   773,325                 503,533
  Premiums in course of collection                                                90,440                 149,969
  Deferred income taxes                                                          165,517                 138,870
  Separate account assets                                                     12,673,244              12,381,137
                                                                        --------------------    ---------------------

TOTAL ASSETS                                                        $         28,541,028     $        27,900,306
                                                                        ====================    =====================

                                                                                                    (continued)


GWL&A FINANCIAL INC.

CONSOLIDATED BALANCE SHEETS
[Dollars in Thousands]
----------------------------------------------------------------------------------------------------------------------
[unaudited]

                                                                             June 30,               December 31,
LIABILITIES AND STOCKHOLDERS EQUITY                                            2001                     2000
                                                                        --------------------    ---------------------

POLICY BENEFIT LIABILITIES:

  Policy reserves                                                   $         12,284,481     $        12,045,000
  Policy and contract claims                                                     374,638                 441,326
  Policyholders funds                                                            245,019                 197,941
  Provision for policyholders dividends                                           74,021                  72,716
  Undistributed earnings on participating business                               164,166                 165,754
GENERAL LIABILITIES:

  Due to GWL                                                                      31,539                  43,081
  Repurchase agreements                                                          231,402
  Commercial paper                                                                98,701                  97,631
  Other liabilities                                                              804,545                 852,842
  Separate account liabilities                                                12,673,244              12,381,137
                                                                        --------------------    ---------------------

    Total liabilities                                                         26,981,756              26,297,428
                                                                        --------------------    ---------------------

GUARANTEED PREFERRED BENEFICIAL INTERESTS
  IN THE COMPANYS JUNIOR SUBORDINATE
  DEBENTURES                                                                     175,000                 175,000

STOCKHOLDERS EQUITY:

  Preferred stock, $1 par value, 50,000,000 shares
    authorized; 0 shares issued and outstanding
  Common stock, $0 par value; 500,000 shares
    authorized; 50,025 shares issued and outstanding                                 250                     250
  Additional paid-in capital                                                     729,076                 724,736
  Accumulated other comprehensive income                                          42,409                  33,672
  Retained earnings                                                              612,537                 669,220
                                                                        --------------------    ---------------------

    Total stockholders equity                                                  1,384,272               1,427,878
                                                                        --------------------    ---------------------

TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                           $         28,541,028     $        27,900,306
                                                                        ====================    =====================

See notes to consolidated financial statements.                                                     (Concluded)



GWL&A FINANCIAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
[Dollars in Thousands]
----------------------------------------------------------------------------------------------------------------------
[Unaudited]

                                                                                      Six Months Ended
                                                                                          June 30,
                                                                        ---------------------------------------------
                                                                               2001                     2000
                                                                        --------------------    ---------------------
OPERATING ACTIVITIES:

  Net income                                                        $             37,778     $           121,095
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Earnings allocated to participating policyholders                              2,312                   4,454
    Amortization of investments                                                  (38,330)                (25,395)
    Realized gains (losses) on disposal of investments
      and write-downs of mortgage loans and real estate                           (8,932)                (10,491)
    Amortization                                                                  24,519                  25,361
    Deferred income taxes                                                        (41,911)                 28,962
  Changes in assets and liabilities:
    Policy benefit liabilities                                                   111,766                 300,142
    Reinsurance receivable                                                         7,398                  (3,959)
    Accrued interest and other receivables                                       202,793                 (51,783)
    Other, net                                                                  (244,934)                 56,568
                                                                        --------------------    ---------------------

    Net cash provided by operating activities                                     52,459                 444,954
                                                                        --------------------    ---------------------

INVESTING ACTIVITIES:

  Proceeds from sales, maturities, and redemptions
    of investments:
    Fixed maturities:
      Held-to-maturity
        Maturities and redemptions                                                                       212,164
      Available-for-sale
        Sales                                                                  2,747,351                 666,969
        Maturities and redemptions                                               629,040                 436,865
    Mortgage loans                                                                76,757                  67,751
    Real estate                                                                  103,038                   6,863
    Common stock                                                                  19,600                  12,102
  Purchases if investments:
    Fixed maturities
      Held-to-maturity                                                                                   (85,433)
      Available-for-sale                                                      (3,534,634)             (1,312,520)
    Mortgage loans                                                                                        (1,917)
    Real estate                                                                 (104,407)                (20,439)
    Common stock                                                                 (24,769)                (24,796)
                                                                        --------------------    ---------------------

    Net cash used in investing activities                                        (88,024)                (42,391)
                                                                        --------------------    ---------------------


                                                                                                    (continued)


GWL&A FINANCIAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
[Dollars in Thousands]
----------------------------------------------------------------------------------------------------------------------
[Unaudited]

                                                                                      Six Months Ended
                                                                                          June 30,
                                                                        ---------------------------------------------
                                                                               2001                     2000
                                                                        --------------------    ---------------------
FINANCING ACTIVITIES:

  Contract withdrawals, net of deposits                             $            (86,787)    $          (283,662)
  Net GWL repayments                                                             (11,542)                   (647)
  Dividends paid                                                                 (94,461)                (60,775)
  Net commercial paper borrowings                                                  1,070                  99,128
  Net repurchase agreements borrowings (repayments)                              231,402                 (80,579)
                                                                        --------------------    ---------------------

    Net cash provided by (used in) financing activities                           39,682                (326,535)
                                                                        --------------------    ---------------------

NET INCREASE IN CASH                                                               4,117                  76,028

CASH, BEGINNING OF YEAR                                                          156,388                 267,986
                                                                        --------------------    ---------------------

CASH, END OF YEAR                                                   $            160,505     $           344,014
                                                                        ====================    =====================

</TABLE>

See notes to consolidated financial statements.                      (Concluded)



GWL&A FINANCIAL INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2001 [Dollars in Thousands]
--------------------------------------------------------------------------------
[Unaudited]
<TABLE>
<CAPTION>
<S>                                         <C> <C>                   <C>      <C>             <C>            <C>
                                                                                                                    Accumulated
                                                                                                  Additional           Other
                                         Preferred Stock                  Common Stock             Paid-in         Comprehensive
                                     -------------------------     ---------------------------
                                      Shares         Amount          Shares         Amount         Capital            Income
                                     ----------     ----------     -----------    ------------    -----------     ----------------

BALANCES, JANUARY 1, 2001                   0              0          50,025            250         724,736              33,672

  Net income
  Other comprehensive income                                                                                              8,737

Total comprehensive income

Dividends
Income tax benefit on stock
  compensation                                                                                        4,340
                                     ----------     ----------     -----------    ------------    -----------     ----------------

BALANCES, JUNE 30, 2001                     0   $          0          50,025   $        250    $    729,076   $          42,409
                                     ==========     ==========     ===========    ============    ===========     ================
</TABLE>


<TABLE>
<CAPTION>
<S>                                  <C>           <C>

BALANCES, JANUARY 1, 2001               Retained

  Net income                            Earnings         Total
  Other comprehensive income           -----------     -----------

Total comprehensive income               669,220       1,427,878

Dividends                                 37,778          37,778
Income tax benefit on stock                                8,737
  compensation                                         -----------
                                                          46,515
                                                       -----------
BALANCES, JUNE 30, 2001                  (94,461)        (94,461)

                                                           4,340
                                       -----------     -----------

                                     $   612,537   $   1,384,272
                                       ===========     ===========
</TABLE>


See notes to consolidated financial statements.



GWL&A FINANCIAL INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[Amounts in Thousands]
--------------------------------------------------------------------------------
[Unaudited]

1.       BASIS OF PRESENTATION

The consolidated  financial statements and related notes of GWL&A Financial Inc.
(the  Company)  have been  prepared in  accordance  with  accounting  principles
generally  accepted  in the  United  States of  America  applicable  to  interim
financial  reporting  and do not include all of the  information  and  footnotes
required  for  complete  financial  statements.   However,  in  the  opinion  of
management,  these statements include all normal recurring adjustments necessary
for a fair  presentation of the results.  These financial  statements  should be
read in conjunction with the audited  consolidated  financial statements and the
accompanying  notes included in the Companys  latest annual report on Form 10-K
for the year ended December 31, 2000.

Operating  results for the six months  ended June 30,  2001 are not  necessarily
indicative of the results that may be expected for the full year ending December
31, 2001.

2.       NEW ACCOUNTING PRONOUNCEMENTS

Effective  January  1,  2001,  the  Company  adopted   Statements  of  Financial
Accounting  Standards (SFAS) No. 133 Accounting for Derivative  Instruments and
Hedging   Activities  as  amended  and  interpreted.   The  SFAS  requires  all
derivatives,  whether designated in hedging relationships or not, to be recorded
on the balance  sheet at fair value.  If the  derivative is designated as a fair
value hedge,  the changes in the fair value of the  derivative and of the hedged
item  attributable  to the  hedged  risk  are  recognized  in  earnings.  If the
derivative  is designated  as a cash flow hedge,  the effective  portions of the
changes in the fair value of the derivative are recorded in other  comprehensive
income and are  recognized in the income  statement  when the hedge item affects
earnings.  Ineffective portions of changes in the fair value of cash flow hedges
are recognized in earnings.

The adoption of SFAS 133 resulted in an approximate $1,000 after-tax increase to
other comprehensive income (OCI).

The Company uses derivative  instruments to hedge asset and liability  positions
and to control risk. Derivatives are not used for speculative purposes.

The  Company  follows  rigorous  procedures  to control  interest  rate risk and
observes  strict  asset and  liability  matching  guidelines.  The Company  uses
interest  rate  futures,  swaps,  and caps to manage the impact of interest rate
changes on cash flows.

Certain investments are exposed to foreign currency risk. The Company uses swaps
to hedge the impact of the  variability in exchange  rates on interest  receipts
denominated in foreign currencies.

In addition,  the Company has written call or put options on various convertible
debt  instruments  to minimize  the equity  impact on the fair value of the debt
instrument.

Hedge  ineffectiveness of $1,008 and $1,350,  determined in accordance with SFAS
133 for the second  quarter and the first six months  ended June 30,  2001,  was
recorded in net investment income.

Derivative  gains and losses included in OCI are  reclassified  into earnings at
the time  interest  income is  recognized  or interest  receipts are received on
bonds for the second  quarter and the first six months ended June 30, 2001,  $87
and $228 of derivative  gains was  reclassified  to net investment  income.  The
Company  estimates  that $457 of net  derivative  gains  included in OCI will be
reclassified into net investment income within the next twelve months.

In September 2000, the Financial  Accounting  Standards Board (FASB) issued SFAS
No. 140,  Accounting  for  Transfers  and  Servicing  of  Financial  Assets and
Extinguishments of Liabilities: A replacement of FASB Statement No. 125, which
revises the standards for accounting for securitizations, and other transfers of
financial assets and collateral, and requires certain disclosures.  SFAS No. 140
will  be  effective  for  transfers  and  servicing  of  financial   assets  and
extinguishments  of liabilities  occurring after March 31, 2001. The adoption of
the new SFAS did not have a  significant  effect on  earnings  or the  financial
position of the Company.

On June 29, 2001  Statement of Financial  Accounting  Standards  (SFAS) No. 141,
"Business Combinations" was approved by the Financial Accounting Standards Board
(FASB). SFAS No. 141 requires that the purchase method of accounting be used for
all business  combinations  initiated after June 30, 2001.  Goodwill and certain
intangible  assets will remain on the balance sheet and not be amortized.  On an
annual  basis,  and when there is reason to suspect  that their values have been
diminished  or  impaired,  these  assets  must be  tested  for  impairment,  and
write-downs may be necessary.  The Company  implemented  SFAS No. 141 on July 1,
2001.  Adoption of the Statement did not have a material impact on the Company's
financial position or results of operations.

On June 29,  2001,  SFAS No. 142,  "Goodwill  and Other  Intangible  Assets" was
approved by the FASB.  SFAS No. 142 changes the  accounting for goodwill from an
amortization  method to an impairment-only  approach.  Amortization of goodwill,
including  goodwill  recorded  in past  business  combinations,  will cease upon
adoption of this statement. The Company is required to implement SFAS No. 142 on
January 1, 2002 and,  although  it is still  reviewing  the  provisions  of this
Statement,  management's  preliminary  assessment is that the Statement will not
have a  material  impact on the  Company's  financial  position  or  results  of
operations.

3.       OTHER

On December 31, 2000, the Company and certain affiliated  companies  completed a
corporate  reorganization.  Prior to December 31, 2000, GWL&A Financial,  was an
indirect wholly owned subsidiary of The Great-West Life Assurance Company (GWL).
Under the new structure,  GWL&A Financial and GWL each continue to be indirectly
and directly, respectively, owned by Great-West Lifeco, Inc., a Canadian holding
company (the Parent or Lifeco),  but GWL no longer  holds an equity  interest in
the Company or GWL&A  Financial.  Refer to the Companys report on Form 10-K for
the year ended December 31, 2000,  for  additional  information on the Companys
organization.

Effective  January 1, 2000,  the  Company  co-insured  the  majority  of General
American Life Insurance  Companys  (General  American)  group life and health
insurance business that primarily  consists of administrative  services only and
stop-loss  policies.  The  agreement  converted  to  an  assumption  reinsurance
agreement  on January 1, 2001.  The Company  assumed  approximately  $150,000 of
policy reserves and miscellaneous liabilities in exchange for an equal amount of
cash and miscellaneous assets from General American.

On October  6, 1999,  the  Company  entered  into an  agreement  with  Allmerica
Financial Corporation (Allmerica) to acquire Allmericas group life and health
insurance  business  on March 1,  2000.  This  business  primarily  consists  of
administrative  services only and stop-loss  policies.  The in-force business is
expected to be underwritten and retained by the Company upon each policy renewal
date.  The  purchase  price  was  based  on a  percentage  of  the  premium  and
administrative fees in-force at March 1, 2000 and March 1, 2001.

In the second  quarter of 2001,  the  Company  recorded a $127  million  special
charge,  ($80.9 million, net of tax) related to its Alta Health & Life Insurance
Company subsidiary.  The principal  components of the charge include $58 million
from Premiums and Claims,  $46 million from Premium  Deficiency  Reserve and $23
million from Goodwill.  The Company  acquired Alta on July 8, 1998.  During 1999
and 2000 the Alta business  continued to be run as a free-standing  unit but was
converted to the Companys  system and  accounting  processes.  This  conversion
program  resulted in significant  issues related to pricing,  underwriting,  and
administration of the business.  The Company has decided to discontinue  writing
new  Alta  business  and all  Alta  customers  will be  moved  to the  Companys
contracts  over  time.  All Alta  sales and  administration  staff  have  become
employees of the Company and the underwriting functions will be conducted by the
underwriting staff of the Company.

The Company is involved in various legal  proceedings that arise in the ordinary
course of its business.  In the opinion of management,  after  consultation with
counsel,  the resolution of these proceedings should not have a material adverse
effect on its financial position or results of operations.

Certain  reclassifications  have been made to the 2000  financial  statements to
conform to the 2001 presentation.




Item 2.  MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

<TABLE>
<CAPTION>
<S>                                     <C>               <C>                <C>               <C>
                                                  Three Months Ended                     Six Months Ended
               Operating Summary                       June 30,                              June 30,
                                            --------------------------------    ------------------------------------
                  [Millions]                    2001              2000              2001                 2000
         ------------------------------     -------------     --------------    --------------     -----------------

         Premium income                 $           263   $           318    $          597    $               671
         Fee income                                 231               213               483                    425
         Net investment income                      245               228               485                    458
         Net realized gains
           on investments                             1                10                 9                     11
                                            -------------     --------------    --------------     -----------------
           Total revenues                           740               769             1,574                  1,565

         Total benefits and
           expenses                                 651               664             1,393                  1,378
         Income tax expenses                         30                37                62                     66
                                            -------------     --------------    --------------     -----------------
                                            -------------     --------------    --------------     -----------------
         Net income before
           special charges                           59                68               119                    121
         Special charges (net)                       81                                  81
                                            -------------     --------------    --------------     -----------------
           Net income (loss)            $           (22)  $            68    $           38    $               121
                                            =============     ==============    ==============     =================

         Deposits for
           investment-type
           Contracts                    $           176   $           184    $          374    $               354
         Deposits to separate
           Accounts                                 686             1,010             1,642                  1,671
         Self-funded premium
           Equivalents                            1,426             1,309             2,976                  2,497

</TABLE>


<TABLE>
<CAPTION>
<S>                                                                          <C>               <C>
                 Balance Sheet                                                    June 30,           December 31,
                  [Millions]                                                        2001                 2000
         ------------------------------                                         --------------     -----------------

         Investment assets                                                   $        13,960   $            13,689
         Separate account
           Assets                                                                     12,673                12,381
         Total assets                                                                 28,541                27,897
         Total policy benefit
           Liabilities                                                                12,979                12,757
         Due to GWL                                                                       32                    43
         Guaranteed preferred
           beneficial interests in
           the Companys junior
           Subordinated
           Debentures                                                                    175                   175
         Total stockholders
           Equity                                                                      1,384                 1,427
</TABLE>



GENERAL

This Form 10-Q contains forward-looking  statements.  Forward-looking statements
are  statements  not based on historical  information  and that relate to future
operations, strategies, financial results, or other developments. In particular,
statements using verbs such as expect,  anticipate,  believe,  or words of
similar import generally involve  forward-looking  statements.  Without limiting
the foregoing, forward-looking statements include statements which represent the
Companys  beliefs  concerning  future  or  projected  levels  of  sales  of the
Companys   products,   investment   spreads  or  yields,  or  the  earnings  or
profitability  of  the  Companys  activities.  Forward-looking  statements  are
necessarily based upon estimates and assumptions that are inherently  subject to
significant business, economic, and competitive uncertainties and contingencies,
many of which are beyond the Companys  control and many of which,  with respect
to future business  decisions,  are subject to change.  These  uncertainties and
contingencies can affect actual results and could cause actual results to differ
materially from those expressed in any forward-looking statements made by, or on
behalf of, the Company.  Whether or not actual  results differ  materially  from
forward-looking  statements may depend on numerous foreseeable and unforeseeable
events or developments,  some of which may be national in scope, such as general
economic  conditions  and  interest  rates,  some of which may be related to the
insurance  industry   generally,   such  as  pricing   competition,   regulatory
developments, and industry consolidation,  and others of which may relate to the
Company  specifically,  such as credit,  volatility,  and other risks associated
with the Companys  investment  portfolio,  and other factors.  Readers are also
directed to consider other risks and uncertainties  discussed in documents filed
by the Company and certain of its subsidiaries  with the Securities and Exchange
Commission.

The following  discussion addresses the financial condition of the Company as of
June 30, 2001,  compared with  December 31, 2000,  and its results of operations
for the three months and six months ended June 30, 2001,  compared with the same
period  last  year.  The  discussion  should  be read in  conjunction  with  the
Managements Discussion and Analysis section included in the Companys report on
Form 10-K for the year ended  December  31, 2000 to which the reader is directed
for additional information.

CONSOLIDATED RESULTS

The Companys consolidated net income decreased $9 million or 13% and $2 million
or 2% for the second  quarter and first six months of 2001 when  compared to the
second quarter and first six months of 2000. The decrease reflects a decrease of
$8 million and $9 million for the second quarter and first six months of 2001 in
the Employee Benefits segment that resulted primarily from unfavorable morbidity
and mortality.  These results are before  one-time  charges of $80.9 million and
operating losses of $18.7 million, net of tax, related to our Alta Health & Life
Insurance Company subsidiary.  The Company acquired Alta on July 8, 1998. During
1999 and 2000 the Alta business  continued to be run as a free-standing unit but
was converted to the Companys system and accounting processes.  This conversion
program  resulted in significant  issues related to pricing,  underwriting,  and
administration of the business.  The Company has decided to discontinue  writing
new  Alta  business  and all  Alta  customers  will be  moved  to the  Companys
contracts  over  time.  All Alta  sales  and  administration  staff  has  become
employees of the Company and the underwriting functions will be conducted by the
underwriting staff of the Company.

Total  revenues  decreased $28 million or 4% and increased $10 million or 1% for
the  second  quarter  and first six months of 2001 when  compared  to the second
quarter and first six months of 2000.  The  decline in  revenues  for the second
quarter  and the  increase  for the first six  months of 2001 was  comprised  of
decreased premium income of $56 million and $74 million,  and decreased realized
gains on investments of $8 million and $2 million.  This is offset by fee income
that  increased  $18  million and $58  million  and net  investment  income that
increased  $17 million and $27 million for the second  quarter and the first six
months of 2001,  when  compared  to the second  quarter  and first six months of
2000.

The decline in premium  income is  primarily in the  Employee  Benefits  segment
primarily due to a higher level of terminations.

Realized investment gains decreased $9 million during the second quarter of 2001
compared to the same period last year.  Realized  investment  gains decreased $2
million  during the first six months of 2001  compared  to the same  period last
year.  The  majority of the  decrease is from gains of $7 million and $8 million
from the sale of common stock during the second  quarter and first six months of
2000  compared to $16  thousand and $600  thousand  during the same periods this
year.

The growth in fee income is primarily in the Employee  Benefits segment due to a
combination  of a  change  in the  marketing  agreement  with  New  England  and
increased pricing associated with the administration of the ASO contract.

The increase in net  investment  income was  primarily  the result of increasing
interest  rates in 2000.  The  actual  earned  rate at June 30,  2001 was  7.38%
compared to 7.04% at June 30, 2000.

The benefits and expenses  decreased $12 million or 2% and increased $16 million
or 1% for the second  quarter and the first six months of 2001 when  compared to
the second  quarter  and first six months of 2000.  The growth in  benefits  and
expenses was primarily due to an increase in operating expenses.

Income  tax  expense  decreased  $7  million or 19% and $4 million or 6% for the
second quarter and the first six months of 2001 when compared to the same period
in 2000. The decrease reflects lower pre-tax earnings for the second quarter and
the first six months of 2001.

In evaluating its results of operations,  the Company also considers net changes
in  deposits  received  for  investment-type  contracts,  deposits  to  separate
accounts and self-funded  equivalents.  Self-funded  equivalents  represent paid
claims under minimum premium and administrative  services only contracts,  which
amounts  approximate  the additional  premiums that would have been earned under
such  contracts  if they  had  been  written  as  traditional  indemnity  or HMO
programs.

Deposits for  investment-type  contracts increased $20 million or 6% for the six
months  of 2001  when  compared  to the six  months of 2000.  This  increase  is
primarily  attributable to the Financial Services segment, where the Company has
experienced  growth in premium for fixed  annuity  products due to the impact of
the higher volatility in the variable marketplace.

Deposits for separate accounts decreased $29 million or 2% for the six months of
2001 when compared to the six months of 2000.  The decrease is due primarily to,
decreased  sales in the 401(k) line of business and decreased  public/non-profit
single premiums.

Self-funded premium equivalents increased $479 million or 19% for the six months
of 2001 when  compared to the six months of 2000.  The  increase  was due to the
General  American  business  ($196 million) and higher overall claims volume for
the self-funded business.


SEGMENT RESULTS

Employee Benefits

The following is a summary of certain  financial  data of the Employee  Benefits
segment:

<TABLE>
<CAPTION>
<S>                                      <C>               <C>              <C>                <C>
                                                  Three Months Ended                     Six Months Ended
               Operating Summary                       June 30,                              June 30,
                                             ------------------------------     ------------------------------------
                   [Millions]                    2001             2000              2001                2000
         -------------------------------     -------------    -------------     --------------    ------------------

         Premiums                        $           226   $          277   $           508    $              579
         Fee income                                  199              182               415                   365
         Net investment income                        22               22                47                    46
         Net realized gains
           (losses) on investments                     1               (1)                3                    (3)
                                             -------------    -------------     --------------    ------------------
           Total revenues                            448              480               973                   987

         Total benefits and
           Expenses                                  406              423               889                   888
         Income tax expenses                          13               20                28                    34
         Net income before
           special charges                            29               37                56                    65
         Special charges (net)                        81                                 81
                                             -------------    -------------     --------------    ------------------
           Net income                    $           (52)  $           37   $           (25)   $               65
                                             =============    =============     ==============    ==================

         Deposits for
           investment-type
           Contracts                     $             7   $            5   $            14    $               20
         Deposits to separate
           Accounts                                  431              503             1,023                   967
         Self-funded premium
           Equivalents                             1,426            1,309             2,976                 2,497
</TABLE>


Fee income  increased $17 million and $50 million for the second quarter and for
the first six months of 2001,  compared to the second  quarter and the first six
months of 2000.  The increase is due primarily to the  restructuring  of the New
England joint venture which is offset with higher operating expenses, as well as
price increases in the overall group health block of business.

Total  benefits and expenses  decreased $17 million and increased $1 million for
the second  quarter  and for the first six months of 2001 when  compared  to the
first six months of 2000. The increase is due primarily to unfavorable morbidity
in the group health business and higher operating expenses.

401(k) premiums and deposits increased 5% for the first six months of 2001 (from
$1,038 million to $1,088 million) when compared to the first six months of 2000.
Assets under  administration  (including  third-party  administration) in 401(k)
decreased 4.8% over the six months of 2001 reflecting lower U.S. equity markets.
The number of contributing  participants  increased from 551,000 at December 31,
2000 to 562,800 at June 30, 2001.

Self-funded premium equivalents  increased $117 million and $479 million for the
second  quarter and the first six months of 2001 compared to the second  quarter
and  first  six  months  of  2000.  The  increase  is  primarily  due to  higher
self-insured claims volume.

The decrease in earnings for the first six months of 2001 compared to a year ago
was primarily  related to the decision to  discontinue  writing new business for
Alta Health & Life Insurance Company.

Financial Services

The following is a summary of certain  financial data of the Financial  Services
segment.

<TABLE>
<CAPTION>
<S>                                     <C>               <C>                <C>               <C>
                                                  Three Months Ended                     Six Months Ended
               Operating Summary                       June 30,                              June 30,
                                           ---------------------------------    ------------------------------------
                  [Millions]                   2001               2000              2001                 2000
         ------------------------------    --------------     --------------    --------------     -----------------

         Premiums                       $           38    $            41    $           90    $                92
         Fee income                                 33                 31                68                     59
         Net investment income                     222                206               438                    413
         Net realized gains
           on investments                                              10                 6                     14
                                           --------------     --------------    --------------     -----------------
           Total revenues                          293                288               602                    578

         Total benefits and
           Expenses                                245                240               505                    490
         Income tax expenses                        17                 17                34                     32
                                           --------------     --------------    --------------     -----------------
           Net income                   $           31    $            31    $           63    $                56
                                           ==============     ==============    ==============     =================

         Deposits for
           investment-type
           Contracts                    $          168    $           178    $          359    $               334
         Deposits to separate
           Accounts                                292                507               618                    704
</TABLE>

Net income for Financial  Services was unchanged for the three months ended June
30, 2001 when  compared to the same period last year and increased $7 million or
13% for the first six  months of 2001 when  compared  to the first six months of
2000, due primarily to improved mortality in individual  insurance and increased
interest margins on public non profit business.

Savings

Savings  premiums and deposits  increased $80 million (from $287 million to $367
million) for the three  months ended June 2001 when  compared to the same period
last year and increased  $251 million (from $631 million to $882 million) or 40%
for the first six months of 2001 when  compared to the first six months of 2000,
which reflects growth in deposits to separate accounts ($150 million) and growth
in deposits to traditional fixed annuity products ($93 million).

The   Financial   Services   segments   core   savings   business   is  in  the
public/non-profit  pension market. The assets of the  public/non-profit  pension
business  including  separate  accounts  but  excluding  Guaranteed   Investment
Contracts increased 2.6% from December 31, 2000.

The Financial  Services  segments  savings business  experienced  strong growth
during  the first six  months of 2001.  The  total  lives  under  administration
increased from 1,002,785 at December 31, 2000, to 1,222,240 at June 30, 2001.

Customer  participation  in guaranteed  separate  accounts  increased and assets
under  management for guaranteed  separate  account funds were $1,173 million at
June 30, 2001 compared to $749 million at December 31, 2000.

Life Insurance

Individual life insurance revenues and premiums of $126 million and $254 million
for the second quarter and first six months of 2001 represent a decrease of $345
million or 73% and $305 million or 55% from the same  periods  last year.  These
decreases are primarily due to a decrease in BOLI separate account deposits.

GENERAL ACCOUNT INVESTMENTS

The Companys primary  investment  objective is to acquire assets whose duration
and cash flow reflect the  characteristics of the Companys  liabilities,  while
meeting industry, size, issuer, and geographic diversification standards. Formal
liquidity and credit quality parameters have also been established.

The  Company  follows  rigorous  procedures  to control  interest  rate risk and
observes strict asset and liability  matching  guidelines.  These guidelines are
designed to ensure that even in changing market conditions, the Companys assets
will  meet the cash  flow and  income  requirements  of its  liabilities.  Using
dynamic  modeling  to analyze  the  effects of a wide range of  possible  market
changes upon investments and policyholder benefits, the Company ensures that its
investment   portfolio  is   appropriately   structured  to  fulfill   financial
obligations to its policyholders.

Fixed Maturities

Fixed  maturities  investments  include  public and privately  placed  corporate
bonds,  public and privately placed structured assets and government bonds. This
latter  category  contains both  asset-backed  and  mortgage-backed  securities,
including  collateralized  mortgage  obligations  (CMOs). The Companys strategy
related to  structured  assets is to focus on those with  lower  volatility  and
minimal  credit  risk.  The Company  does not invest in higher risk CMOs such as
interest-only and principal-only strips, and currently has no plans to invest in
such securities.

Private placement investments are generally less marketable than publicly traded
assets, yet they typically offer covenant protection that allows the Company, if
necessary,  to take  appropriate  action to protect its investment.  The Company
believes that the cost of the  additional  monitoring  and analysis  required by
private placements is more than offset by their enhanced yield.

One of the Companys  primary  objectives  is to ensure that its fixed  maturity
portfolio is maintained at a high average  quality,  so as to limit credit risk.
If not  externally  rated,  the  securities  are rated by the Company on a basis
intended to be similar to that of rating agencies.

The distribution of the fixed maturity  portfolio by credit rating is summarized
as follows:

<TABLE>
<CAPTION>
<S>                                                                        <C>                         <C>
                                                                    June 30,                  December 31,
                                                                      2001                        2000
                                                              ----------------------     -----------------------

         AAA                                                              55.5  %                     53.5  %
         AA                                                                9.3  %                     10.2  %
         A                                                                14.7  %                     16.2  %
         BBB                                                              18.0  %                     19.0  %
         BB and Below (non-investment grade)                               2.5  %                      1.1  %
                                                              ----------------- ----     ------------------ ----

                                TOTAL                                    100.0  %                    100.0  %
</TABLE>

During the six months of 2001, net realized gains on fixed  maturities  included
in  stockholders  equity,  which  is net of  policyholder-related  amounts  and
deferred income taxes, increased stockholders equity by $9 million.

LIQUIDITY AND CAPITAL RESOURCES

The  Companys  operations  have  liquidity  requirements  that  vary  among the
principal  product lines. Life insurance and pension plan reserves are primarily
long-term  liabilities.   Accident  and  health  reserves,  including  long-term
disability, consist of both short-term and long-term liabilities. Life insurance
and pension plan reserve  requirements are usually stable and  predictable,  and
are supported  primarily by long-term,  fixed income  investments.  Accident and
health claim  demands are stable and  predictable  but  generally  shorter term,
requiring greater liquidity.

Generally,  the  Company  has  met its  operating  requirements  by  maintaining
appropriate levels of liquidity in its investment  portfolio  utilizing positive
cash flows from operations.  Liquidity for the Company has remained  strong,  as
evidenced by  significant  amounts of  short-term  investments  and cash,  which
totaled $491 million and $568 million as of June 30, 2001 and December 31, 2000,
respectively.

Funds  provided  from  premiums and fees,  investment  income and  maturities of
investment  assets are  reasonably  predictable  and normally  exceed  liquidity
requirements for payment of claims,  benefits, and expenses.  However, since the
timing of available  funds cannot  always be matched  precisely to  commitments,
imbalances may arise when demands for funds exceed those on hand. Also, a demand
for funds  may arise as a result of the  Company  taking  advantage  of  current
investment  opportunities.  The  Companys  capital  resources  represent  funds
available for long-term  business  commitments and primarily consist of retained
earnings  and  proceeds  from  the  issuance  of  commercial  paper  and  equity
securities.  Capital  resources  provide  protection for  policyholders  and the
financial strength to support the underwriting of insurance risks, and allow for
continued business growth. The amount of capital resources that may be needed is
determined by the Companys senior management and Board of Directors, as well as
by  regulatory  requirements.  The  allocation  of  resources  to new  long-term
business  commitments is designed to achieve an attractive  return,  tempered by
considerations of risk and the need to support the Companys existing business.

Additional  liquidity  is  available  through  the  Companys  participation  in
repurchase  agreements with third party brokers. The Company had $231 million of
repurchase  agreements at June 30, 2001,  compared to zero at December 31, 2000.
The Companys  participation in repurchase  agreements depends on current market
conditions. Therefore, fluctuations may occur.

The Companys financial strength provides the capacity and flexibility to enable
it to raise funds in the capital  markets  through  the  issuance of  commercial
paper. The Company continues to be well capitalized,  with sufficient  borrowing
capacity to meet the  anticipated  needs of its business.  The Company had $98.7
million and $97.6 million of commercial paper  outstanding at June 30, 2001, and
December 31, 2000, respectively. The commercial paper has been given a rating of
A-1 + by Standard & Poors  Corporation and a rating of P-1 by Moodys Investors
Service, each being the highest rating available.




PART II  OTHER INFORMATION

ITEM 1   LEGAL PROCEEDINGS

The Company is involved in various legal  proceedings that arise in the ordinary
course of its  business,  the  resolution  of which  should  not have a material
adverse effect on its financial position or results of operations.

ITEM 6   EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Index to Exhibits

                  None

         (b)      Reports on Form 8-K

                  None

SIGNATURES

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


GWL&A FINANCIAL INC.



BY:   /s/ Glen R. Derback                              DATE:   August 14, 2001
      ----------------------------------------------         -------------------
      Glen R. Derback, Vice President and Controller
      (Duly authorized officer and chief
       accounting officer)