UNITED STATES

                              SECURITIES AND EXCHANGE COMMISSION

                                    Washington, D.C. 20549

                                          FORM 10-Q

<TABLE>
<CAPTION>
<S>     <C>                                                                  <C>
(Mark One)
|X|   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended                          September 30, 2002
                                   --------------------------------------------------------------

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 incorporation or            (I.R.S. Employer Identification
organization)                                               Number)


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

                                                          (303) 737-4128
                                   --------------------------------------------------------------
                                       (Registrant's telephone number, including area code)

</TABLE>

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, 2002,  50,025 shares of the  registrant's  common stock were
outstanding, all of which were owned by the registrant's 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.

                                              10

<TABLE>
<CAPTION>
                                      TABLE OF CONTENTS

Part I     FINANCIAL INFORMATION                                                          Page
                                                                                        ---------
<S>                                                                                       <C>

           Item 1  Financial Statements                                                    3

                   Consolidated Statements of Income                                       3

                   Consolidated Balance Sheets                                             4

                   Consolidated Statements of Cash Flows                                   6

                   Consolidated Statement of Stockholder's Equity                          8

                   Notes to Consolidated Financial Statements                              9

           Item 2  Management's Discussion and Analysis of Financial Condition and
           Results of Operations                                                           11

           Item 3  Quantitative and Qualitative Disclosures About Market Risk              20

           Item 4  Controls and Procedures                                                 20

Part II    OTHER INFORMATION                                                               21

           Item 1  Legal Proceedings                                                       21

           Item 6  Exhibits and Reports on Form 8-K                                        21

           Signature                                                                       21

           Certifications                                                                  22
</TABLE>


PART I   FINANCIAL INFORMATION

ITEM 1   FINANCIAL STATEMENTS

GWL&A FINANCIAL INC.

CONSOLIDATED STATEMENTS OF INCOME
[Dollars in Thousands]
<TABLE>
<CAPTION>
==============================================================================================
[Unaudited]
                                        Three Months Ended               Nine Months Ended
                                           September 30,                   September 30,
                                    ----------------------------    ----------------------------
                                       2002            2001            2002            2001
                                    ------------    ------------    ------------    ------------
<S>                                    <C>             <C>           <C>             <C>
REVENUES:
  Premium income                 $     292,155   $     294,308   $     841,164   $     891,638
  Fee income                           216,968         250,335         676,976         733,185
  Net investment income                231,368         227,369         693,873         709,411
  Net realized gains on
    Investments                         18,077          13,111          25,985          22,043
                                    ------------    ------------    ------------    ------------

                                       758,568         785,123       2,237,998       2,356,277
                                    ------------    ------------    ------------    ------------
BENEFITS AND EXPENSES:

  Life and other policy                264,790         234,350         715,974         766,266
benefits
  (Decrease) increase
    in reserves                         38,540          47,484          63,767          76,799
  Interest paid or credited
    to contractholders                 119,363         120,992         370,392         387,814
  Provision for policyholders'
    share of earnings on
    Participating business(loss)          (710)            567             212           2,878
  Dividends to policyholders            16,861          16,300          57,151          55,826
                                    ------------    ------------    ------------    ------------

                                       438,844         419,693       1,207,496       1,289,583
                                    ------------    ------------    ------------    ------------

  Commissions                           40,979          52,792         139,518         147,022
  Operating expenses                   171,480         185,027         542,550         597,836
  Premium taxes                          7,883          13,454          23,231          27,047
  Special charges                                                                      127,040
                                    ------------    ------------    ------------    ------------

                                       659,186         670,966       1,912,795       2,188,528
                                    ------------    ------------    ------------    ------------
INCOME BEFORE
  INCOME TAXES                          99,382         114,157         325,203         167,749

PROVISION FOR
  INCOME TAXES:
    Current                             68,128          (2,840)        112,293          54,885
    Deferred                           (35,368)         42,743          (6,776)            832
                                    ------------    ------------    ------------    ------------
                                        32,760          39,903         105,517          55,717
                                    ------------    ------------    ------------    ------------

NET INCOME                       $      66,622   $      74,254   $     219,686   $     112,032
                                    ============    ============    ============    ============
</TABLE>



See notes to consolidated financial statements.

GWL&A FINANCIAL INC.

CONSOLIDATED BALANCE SHEETS
[Dollars in Thousands]
<TABLE>
<CAPTION>
==============================================================================================

                                                            September 30,        December 31,
ASSETS                                                           2002                2001
                                                           -----------------    ----------------
                                                             [unaudited]
INVESTMENTS:
<S>                                                            <C>                  <C>
  Fixed Maturities available-for-sale, at fair value
      (amortized cost $9,977,138 and $9,904,453)        $     10,518,304     $     10,116,175
  Mortgage loans on real estate (net of allowances
    of $57,654 and $57,654)                                      466,949              613,453
  Common stock, at fair value (cost $74,586, and                  66,247               73,344
    $74,107)
  Real estate, net                                                 3,839               11,838
  Policy loans                                                 2,927,927            3,000,441
  Short-term investments, available-for-sale
    (amortized cost $362,922 and $427,866)                       363,134              425,198
                                                           -----------------    ----------------

    Total investments                                         14,346,400           14,240,449

  Cash                                                           124,914              216,209
  Reinsurance receivable                                         315,215              282,352
  Deferred policy acquisition costs                              257,152              275,570
  Investment income due and accrued                              124,938              130,775
  Amounts receivable related to uninsured accident
    and health plan claims (net of allowances
    of $42,100 and $53,431)                                      104,867               89,533
  Other assets                                                   874,455              745,617
  Premiums in course of collection (net of allowances
    of $11,955 and $22,217)                                       65,343               99,811
  Deferred income taxes                                          102,879              149,168
  Separate account assets                                     10,933,287           12,584,661
                                                           -----------------    ----------------






TOTAL ASSETS                                            $     27,249,450     $     28,814,145
                                                           =================    ================

                                                                                  (continued)
<PAGE>

GWL&A FINANCIAL INC.

CONSOLIDATED BALANCE SHEETS
[Dollars in Thousands]
==============================================================================================

                                                            September 30,        December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY                             2002                2001
                                                           -----------------    ----------------
                                                             [unaudited]
POLICY BENEFIT LIABILITIES:

  Policy reserves                                       $     12,272,288     $     12,211,496
  Policy and contract claims                                     382,154              401,389
  Policyholders' funds                                           306,254              242,916
  Provision for policyholders' dividends                          75,931               74,740
  Undistributed earnings on participating business               162,017              163,086
GENERAL LIABILITIES:

  Due to GWL                                                      37,554               41,874
  Repurchase agreements                                          281,063              250,889
  Commercial paper                                                96,592               97,046
  Other liabilities                                              868,450            1,099,963
  Separate account liabilities                                10,933,287           12,584,661
                                                           -----------------    ----------------

    Total liabilities                                         25,415,590           27,168,060
                                                           -----------------    ----------------

GUARANTEED PREFERRED BENEFICIAL INTERESTS
  IN THE COMPANY'S JUNIOR SUBORDINATE
  DEBENTURES                                                     175,000              175,000

STOCKHOLDER'S 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                                     724,569              719,833
  Accumulated other comprehensive income                         178,183               76,507
  Retained earnings                                              755,858              674,495
                                                           -----------------    ----------------

    Total stockholder's equity                                 1,658,860            1,471,085
                                                           -----------------    ----------------







TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY              $     27,249,450     $     28,814,145
                                                           =================    ================

See notes to consolidated financial statements.                                   (Concluded)
<PAGE>

GWL&A FINANCIAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
[Dollars in Thousands]
==============================================================================================
[Unaudited]
                                                                    Nine Months Ended
                                                                      September 30,
                                                           -------------------------------------
                                                                 2002                2001
                                                           -----------------    ----------------
OPERATING ACTIVITIES:

  Net income                                            $        219,686     $        112,032
  Adjustments to reconcile net income to net cash
    Provided by operating activities:
    Earnings allocated to participating policyholders                212                2,878
    Amortization of investments                                  (55,937)             (57,973)
    Realized gains on disposal of investments
      And write-downs of mortgage loans and real                 (25,985)             (22,043)
      estate
    Amortization                                                  26,229               39,881
    Deferred income taxes                                         (6,776)                 832
  Changes in assets and liabilities:
    Policy benefit liabilities                                   530,745              236,026
    Reinsurance receivable                                       (32,863)              10,425
    Accrued interest and other receivables                        24,971              179,466
    Corporate owned life insurance                                (7,110)            (105,222)
    Securities receivable/payable                               (200,369)             129,442
    Other, net                                                  (180,087)            (198,162)
                                                           -----------------    ----------------

    Net cash provided by operating activities                    292,716              327,582
                                                           -----------------    ----------------

INVESTING ACTIVITIES:

  Proceeds from sales, maturities, and redemptions
    of investments:
    Fixed maturities available-for-sale
        Sales                                                  4,301,335            3,940,889
        Maturities and redemptions                             1,038,940              906,159
    Mortgage loans                                               157,956              142,209
    Real estate                                                    1,800
    Common stock                                                   7,960               19,600
  Purchases of investments:
    Fixed maturities available-for-sale                       (5,283,540)          (5,259,788)
    Mortgage loans
    Real estate                                                   (2,648)              (2,280)
    Common stock                                                    (828)             (24,172)
                                                           -----------------    ----------------

    Net cash provided by (used in) investing                     220,975             (277,383)
    activities
                                                           -----------------    ----------------








                                                                                  (continued)
<PAGE>

GWL&A FINANCIAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
[Dollars in Thousands]
==============================================================================================
[Unaudited]
                                                                     Nine Months Ended
                                                                       September 30,
                                                             -----------------------------------
                                                                  2002               2001
                                                             ---------------    ----------------
FINANCING ACTIVITIES:

  Contract withdrawals, net of deposits                   $       (492,063)  $       (250,355)
  Net GWL repayments                                                (4,320)             3,498
  Dividends paid                                                  (138,323)          (141,007)
  Net commercial paper borrowings, net                                (454)            (9,631)
  Net repurchase agreements borrowings, net                         30,174            282,100
                                                             ---------------    ----------------

    Net cash used in financing activities                         (604,986)          (115,395)
                                                             ---------------    ----------------

NET DECREASE IN CASH                                               (91,295)           (65,196)

CASH, BEGINNING OF YEAR                                            216,209            156,388
                                                             ---------------    ----------------

CASH, END OF PERIOD                                       $        124,914   $         91,192
                                                             ===============    ================















See notes to consolidated financial statements.                                   (Concluded)
</TABLE>
<PAGE>

GWL&A FINANCIAL INC.

CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2002 [Dollars in Thousands]
<TABLE>
<CAPTION>
==============================================================================================
[Unaudited]
                                                                                               Accumulated
                                                                                  Additional      Other
                                   Preferred Stock            Common Stock         Paid-in    Comprehensive   Retained
                                ----------------------   -----------------------
                                 Shares       Amount      Shares       Amount      Capital       Income       Earnings      Total
                                ----------   ---------   ----------   ----------  ----------  --------------  ----------  ----------

<S>                                  <C>         <C>       <C>            <C>      <C>            <C>         <C>         <C>
BALANCES, JANUARY 1, 2002             0   $       0        50,025  $      250   $  719,833  $     76,507    $ 674,495   $ 1,471,085

  Net income                                                                                                  219,686      219,686
  Other comprehensive income                                                                     101,676                   101,676
                                                                                                                          ----------
Total comprehensive income                                                                                                 321,362
                                                                                                                          ----------
Dividends                                                                                                     (138,323)   (138,323)
Income tax benefit on stock
  compensation                                                                       4,736                                   4,736
                                ----------   ---------   ----------   ----------  ----------  --------------  ----------  ----------

BALANCES, SEPTEMBER 30, 2002          0   $       0        50,025  $      250   $  724,569  $    178,183    $ 755,858   $ 1,658,860
                                ==========   =========   ==========   ==========  ==========  ==============  ==========  ==========









See notes to consolidated financial statements.
</TABLE>

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 Company's latest annual report
        on Form 10-K for the year ended December 31, 2001.

        Operating results for the nine months ended September 30, 2002 are not
        necessarily  indicative  of the results  that may be expected  for the
        full year ending December 31, 2002.

2.      NEW ACCOUNTING PRONOUNCEMENTS

        On June 29, 2001,  Statement No. 142,  "Goodwill and Other  Intangible
        Assets" (SFAS No. 142) was approved by the FASB.  SFAS No. 142 changes
        the  accounting  for goodwill and certain  other  intangibles  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  implemented
        SFAS No. 142 on January 1, 2002.  Adoption of this  statement  did not
        have a material impact on the Company's  financial position or results
        of operations.

        In August 2001, the FASB issued Statement  No.144  "Accounting for the
        Impairment  or Disposal of  Long-Lived  Assets"  (SFAS  No.144).  SFAS
        No.144 supercedes current  accounting  guidance relating to impairment
        of long-lived assets and provides a single accounting  methodology for
        long-lived  assets to be  disposed  of, and also  supercedes  existing
        guidance  with respect to  reporting  the effects of the disposal of a
        business.  SFAS No.144 was adopted  January 1, 2002 without a material
        impact on the Company's financial position or results of operations.

        In April 2002, the FASB issued  Statement No. 145  "Rescission of FASB
        No. 4, 44 and 64,  Amendment of FASB  Statement  No. 13, and Technical
        Corrections"  (SFAS No. 145).  FASB No. 4 required all gains or losses
        from  extinguishment  of debt to be classified as extraordinary  items
        net of income taxes.  SFAS No. 145 requires that gains and losses from
        extinguishment  of debt be evaluated under the provision of Accounting
        Principles  Board Opinion No. 30, and be classified as ordinary  items
        unless they are unusual or  infrequent  or meet the specific  criteria
        for treatment as an  extraordinary  item.  This statement is effective
        January 1, 2003.  The Company does not expect this statement to have a
        material  effect on the  Company's  financial  position  or results of
        operations.

        In July 2002, the FASB issued Statement No. 146 " Accounting for Costs
        Associated  With Exit or Disposal  Activities"  (SFAS No.  146).  This
        statement  addresses  financial  accounting  and  reporting  for costs
        associated  with exit or disposal  activities and nullifies EITF Issue
        No. 94-3,  "Liability  Recognition  for Certain  Employee  Termination
        Benefits and Other Costs to Exit an Activity  (including Certain Costs
        Incurred in a Restructuring)."  This statement requires recognition of
        a liability for a cost  associated  with an exit or disposal  activity
        when the liability is incurred,  as opposed to when the entity commits
        to an exit  plan  under  EITF  94-3.  SFAS  No.  146 is to be  applied
        prospectively to exit or disposal activities  initiated after December
        31,  2002.  The  Company  does not  expect  this  statement  to have a
        material  impact on the  Company's  financial  position  or results of
        operations.

3.      GUARANTEED  PREFERRED  BENEFICIAL  INTERESTS IN THE  COMPANY'S  JUNIOR
        SUBORDINATED DEBENTURES

        On May 4, 1999,  Great-West  Life & Annuity  Insurance  Capital I (the
        Trust), the Company's wholly-owned  subsidiary trust created under the
        laws of the State of Delaware, issued $175,000 of Subordinated Capital
        Income  Securities.  The sole  assets of the  Trust  are the  $180,412
        aggregate  principal amount of the Company's 7.25% Junior Subordinated
        Debentures due June 30, 2048. The  obligations of the Trust related to
        its  Junior  Subordinated  Debentures  are fully  and  unconditionally
        guaranteed by the Company.

4.      OTHER

        In the second  quarter of 2001,  the Company  recorded a $127  million
        special charge,  ($80.9 million,  net of tax) related to Alta Health &
        Life Insurance Company (Alta). The principal  components of the charge
        include  a  $46  million   premium   deficiency   reserve  related  to
        under-pricing  on the block of  business,  a $29  million  reserve for
        doubtful  premium  receivables,  a $28 million  reserve  for  doubtful
        accident and health plan claim  receivables,  and $24 million decrease
        in  goodwill  and other.  Alta was  acquired by the Company 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  Company's  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 transition Alta business to other
        Company products.  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  2001  financial
        statements to conform to the 2002 presentation.

Item 2. MANAGEMENT'S  DISCUSSION  AND ANALYSIS OF FINANCIAL  CONDITION AND
        RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
                                          Three Months Ended             Nine Months Ended
            Operating Summary               September 30,                  September 30,
                                       -------------------------   ------------------------------
                [Millions]                2002          2001           2002             2001
        ---------------------------    -----------    ----------   --------------   -------------
<S>                                         <C>            <C>         <C>                <C>
        Premium income              $       292    $       295   $       841      $         892
        Fee income                          217            250           677                733
        Net investment income               232            227           694                709
        Realized investment gains            18             13            26                 22
                                       -----------    ----------   --------------   -------------
        Total revenues                      759            785         2,238              2,356

        Total benefits and                  659            671         1,913              2,061
        expenses
        Income tax expenses                  33             40           105                102
                                       -----------    ----------   --------------   -------------
        Net income before special
          Charges                            67             74           220                193
        Special charges (net)                                                                81
                                       -----------    ----------   --------------   -------------
        Net income (loss)           $        67             74           220                112
                                       ===========    ==========   ==============   =============
        Deposits for investment-
        type
          Contracts                 $       201            207           513                581
        Deposits to separate                521            917         1,909              2,559
        accounts
        Self-funded premium
          Equivalents                     1,305          1,370         3,947              4,346

              Balance Sheet                                         September 30,   December 31,
                [Millions]                                             2002             2001
        ---------------------------                                --------------   -------------

        Investment assets                                        $    14,346      $     14,240
        Separate account
          Assets                                                      10,933            12,585
        Total assets                                                  27,249            28,811
        Total policy
          benefit liabilities                                         13,037            12,931
        Due to GWL                                                        38                42
        Guaranteed preferred
          beneficial interests in
        the Company's junior
          subordinated debentures                                        175               175
        Total stockholder's
          equity                                                       1,659             1,471
</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
        Company's  beliefs  concerning  future or projected levels of sales of
        the Company's products,  investment spreads or yields, or the earnings
        or   profitability  of  the  Company's   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  Company's  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 Company's  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 September 30, 2002, compared with December 31, 2001, and
        its  results of  operations  for the  quarter  and nine  months  ended
        September  30,  2002,  compared  with the same period  last year.  The
        discussion  should  be  read  in  conjunction  with  the  Management's
        Discussion and Analysis  section  included in the Company's  report on
        Form 10-K for the year ended  December 31, 2001 to which the reader is
        directed for additional information.

        CONSOLIDATED RESULTS

        The Company's consolidated net income decreased $7 million or 9.5% for
        the third  quarter and  increased  $8 million or 4% for the first nine
        months  of 2002 when  compared  to the third  quarter  and first  nine
        months of 2001, before one-time charges of $80.9 million and operating
        losses of $18.7 million, net of tax, related to the Alta Health & Life
        Insurance Company (Alta) business. Alta was acquired by the Company on
        July 8, 1998. During 2001 and 2000, the Alta business  continued to be
        run as a free-standing unit but was converted to the Company's systems
        and  accounting   processes.   This  conversion  program  resulted  in
        significant   issues   related   to   pricing,    underwriting,    and
        administration of the business.  The Company has decided to transition
        Alta  business  to  other  Company   products.   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 $7 million net income decrease  quarter over quarter
        reflects a $14 million  decrease  in the  Employee  Benefits  segment,
        offset by an $7 million  increase in the Financial  Services  segment.
        The $8 million net income increase year over year reflects an increase
        of $10 million in the Financial Services segment, offset by a decrease
        of $2  million  in the  Employee  Benefits  segment,  before  one-time
        charges of $80.9 million and operating losses of $18.7 million, net of
        tax, related to the Alta business.

        Total revenues  decreased $26 million or 3.3% and $118 million or 5.0%
        for the third  quarter and first nine months of 2002 when  compared to
        the third  quarter and first nine months of 2001.  The decrease in the
        third  quarter  was  primarily  due to a $33  million  decrease in fee
        income.

        The  decrease in total  revenues for the first nine months of 2002 was
        due  to a $51  million  decrease  in  premium  income,  a $56  million
        decrease in fee income,  and a $15 million  decrease in net investment
        income, offset by a $4 million increase in realized investment gains.

        The  decrease  in premium  income for the first nine months of 2002 is
        primarily  in the  Employee  Benefits  segment  reflecting  lower case
        sales.

        The decreases in fee income in the third quarter and first nine months
        of 2002 were primarily in the Employee Benefits segment as a result of
        the decline in membership.

        The  decrease  in net  investment  income for the first nine months of
        2002 was primarily the result of decreasing interest rates. The actual
        earned  rate at  September  30,  2002 was 6.87%  compared  to 7.59% at
        September 30, 2001.  The earned rate is expected to trend lower in the
        next few quarters reflecting the interest rate environment.

        Benefits and expenses  decreased  $12 million or 1.8% and $148 million
        or 7.2% for the third  quarter  and the first nine months of 2002 when
        compared to the third  quarter and the first nine months of 2001.  The
        decrease in benefits  and expenses  was a  combination  of lower group
        life and health claims and effective cost management.

        Income tax expense  before  special  charges  decreased  $7 million or
        17.5% for the third  quarter of 2002 when  compared to the same period
        in 2001 reflecting the decrease in pretax income.

        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 separate accounts decreased $650 million or 25.4% for the
        first nine  months of 2002 when  compared  to the first nine months of
        2001.  The decrease is due primarily to a combination  of lower 401(k)
        single premium deposits and lower BOLI deposits.

        Self-funded premium equivalents decreased $399 million or 9.2% for the
        first nine  months of 2002 when  compared  to the first nine months of
        2001.  The decrease was due to the decrease in membership and improved
        morbidity.

        Historically,  the 401(k)  business  unit had been  included  with the
        Employee  Benefits  segment.  In order to capitalize on administrative
        system  efficiencies  and  group  pension  expertise,  401(k)  is  now
        administered by the Financial  Services  segment.  As a result,  prior
        period  segment  results have been  reclassified  to conform with this
        change.


        SEGMENT RESULTS

        Employee Benefits
<TABLE>
<CAPTION>
        The following is a summary of certain financial data of the Employee Benefits segment:

                                            Three Months Ended           Nine Months Ended
             Operating Summary                September 30,                September 30,
                                         -------------------------    -------------------------
                 [Millions]                 2002          2001           2002          2001
        -----------------------------    -----------    ----------    -----------    ----------
<S>                                            <C>            <C>           <C>            <C>
        Premium income                $        257   $        258  $        722   $        766
        Fee income                             162            192           508            556
        Net investment income                   18             17            52             51
        Realized investment gains                5              1             6              3
                                         -----------    ----------    -----------    ----------
        Total revenues                         442            468         1,288          1,376

        Total benefits and expenses            402            404         1,131          1,239
        Income tax expenses                     14             24            52             49
                                         -----------    ----------    -----------    ----------
        Net income before special
          Charges                               26             40           105             88
        Special charges (net)                                                               81
                                         -----------    ----------    -----------    ----------
        Net income                    $         26   $         40  $        105   $          7
                                         ===========    ==========    ===========    ==========

        Self-funded premium           $      1,305   $      1,370  $      3,947   $      4,346
        equivalents
</TABLE>

        The $14 million  decrease in  earnings  for the third  quarter of 2002
        compared  to  the  third  quarter  of  2001  is  primarily  due  to  a
        combination  of an expense loss from a decrease in membership and poor
        morbidity  experience  as a result  of  accelerating  claims  payments
        associated  with the July 1,  2002  ERISA  change.  The  ERISA  change
        requires  payments of claims within 30 days rather than the previously
        allowed 45 days.

        The $2 million  decrease in earnings for the first nine months of 2002
        compared to a year ago, before  one-time  charges of $80.9 million and
        operating  losses of $18.7  million,  net of tax,  related to the Alta
        business,  is primarily  related to improved  mortality  and morbidity
        results  through  June 30,  2002,  offset by a  decrease  in the third
        quarter of 2002 discussed above.

        Premium  and fee  income  decreased  $31  million  or 7% for the third
        quarter of 2002 and  decreased  $92 million or 7.0% for the first nine
        months  of 2002,  when  compared  to the  same  periods  of 2001.  The
        decreases are primarily due to lower membership levels associated with
        lower  case  sales.  There  was a 4%  decrease  in total  health  care
        membership  from  2,321,400 at June 30, 2002 to 2,239,300 at September
        30, 2002.  There was a 16%  decrease in total  health care  membership
        from  2,668,700  at September  30, 2001 to 2,239,300 at September  30,
        2002. Much of the health care membership  decline can be attributed to
        lower case sales.  The decline in membership was also, in part, due to
        difficulties with the implementation of a systems  enhancement,  which
        was resolved by the end of 2001;  a decrease in the employee  base for
        existing group health care  customers;  and the general decline in the
        economy.

        Total benefits and expenses decreased $108 million or 9% for the first
        nine  months of 2002 when  compared  to the first nine months of 2001.
        The decreases  are due primarily to a combination  of lower group life
        and health  claims due to  decreasing  membership  and a reduction  in
        operating expenses.

        Self-funded premium equivalents decreased $65 million and $399 million
        for the third  quarter and first nine  months of 2002  compared to the
        third  quarter and first nine months of 2001.  The decrease was due to
        improved morbidity as well as a decrease in membership.

        The Company recorded $14.0 million ($9.1 million, net of tax) and $4.5
        million ($2.9 million, net of tax) of restructuring costs in the first
        quarter of 2002 and in the second quarter of 2002 related to the costs
        associated with the consolidation of benefit payment offices and sales
        offices  throughout the United States. The charges relate to severance
        of $2.8 million and $1.5 million,  disposal of furniture and equipment
        of  $4.4  million  and  $0.5  million,   and  termination  of  leasing
        agreements of $6.8 million and $2.5 million.  During the first quarter
        of 2002,  304 employees were  terminated,  of which 250 employees were
        from the  Employee  Benefits  division.  During the second  quarter of
        2002,  252  employees  were  terminated,  all of which  were  from the
        Employee Benefits division.

        The Company  established a premium  deficiency  reserve of $46 million
        (included in one-time charges previously  discussed) on the Alta block
        of business in 2001.  Releases of $18.7 million in 2001,  $6.2 million
        in the first quarter of 2002,  and $2.1 million in the second  quarter
        of 2002 were made to offset the  underwriting  losses  incurred on the
        under-priced  block of business.  During the first quarter of 2002 the
        reserve was  reduced by $15.0  million  ($9.8  million net of tax) and
        during the  second  quarter of 2002 the  reserve  was  reduced by $4.0
        million  ($2.6  million,  net of tax) based on an analysis of emerging
        experience  which was more favorable than  originally  estimated.  The
        balance of the premium  deficiency  reserve at September  30, 2002 was
        zero.

        Financial Services

        The following is a summary of certain  financial data of the Financial
        Services segment.
<TABLE>
<CAPTION>

                                            Three Months Ended           Nine Months Ended
             Operating Summary                September 30,                September 30,
                                         -------------------------    -------------------------
                 [Millions]                 2002          2001           2002          2001
        -----------------------------    -----------    ----------    -----------    ----------
<S>                                            <C>            <C>           <C>            <C>
        Premium income                $         35   $         37  $        119   $        126
        Fee income                              55             58           169            177
        Net investment income                  214            210           642            658
        Realized investment gains               13             12            20             19
                                         -----------    ----------    -----------    ----------
        Total revenues                         317            317           950            980

        Total benefits and expenses            257            267           782            822
        Income tax expenses                     19             16            53             53
                                         -----------    ----------    -----------    ----------
        Net income                    $         41   $         34  $        115   $        105
                                         ===========    ==========    ===========    ==========

        Deposits for investment-type
          Contracts                   $        201   $        207  $        513   $        581
        Deposits to separate                   521            917         1,909          2,559
        accounts
</TABLE>

        Net income for Financial Services increased $7 million and $10 million
        for the third  quarter and first nine months ended  September 30, 2002
        when compared to the same periods last year. The increase  reflects an
        improvement  in  interest   margins  on  guaranteed   public/nonprofit
        business and reductions in operating expenses.

        Savings

        Savings  premiums and deposits and fees increased $163 million to $370
        million or 79% for the third quarter of 2002 when compared to the same
        period last year,  and increased  $95 million (from $1,089  million to
        $1,184  million) or 9% for the first nine months of 2002 when compared
        to the first nine months of 2001.  The increases  primarily  reflect a
        combination of an increase in deposits for  investment-type  contracts
        and an increase in the deposits to separate accounts.

        The  Financial  Services  segment's  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 decreased $207 million or 2.5% from December 31,
        2001  due to  the  influence  of the  volatility  of the  U.S.  equity
        markets.

        The Financial Services  segment's savings business  experienced growth
        during  the  first  nine  months  of  2002.   The  total  lives  under
        administration  increased  4.7% from 1,268,549 at December 31, 2001 to
        1,329,388 at September 30, 2002.

        Customer  participation  in  guaranteed  separate  accounts  increased
        during  2002,  as many  customers  prefer the security of fixed income
        securities in separate  account  assets.  Assets under  management for
        guaranteed  separate  account funds were $1,658.6 million at September
        30, 2002 compared to $1,214.4 million at December 31, 2001.

        Life Insurance

        Individual  life  insurance  deposits  and  premiums  and fees of $116
        million and $362  million for the third  quarter and first nine months
        of 2002  represent a decrease of $458 million or 80% and a decrease of
        $466 million or 56% from the same periods last year. The decreases are
        primarily  due to slow  sales in the  BOLI  markets  due to low  fixed
        interest rates.

        401(k)

        401(k)  premiums and deposits  decreased  26% for the third quarter of
        2002 when  compared to the third quarter of 2001 (from $438 million to
        $324 million). 401(k) premiums and deposits decreased 24% for the nine
        months of 2002 (from $1,526  million to $1,164  million) when compared
        to the nine months of 2001.  Assets  under  administration  (including
        third-party administration) in 401(k) decreased 18.0% during the first
        nine months of 2002 due to the impact of lower U.S. equity markets and
        a  decreasing  number of  participants.  The  number  of  participants
        decreased  from 564,025 at September  30, 2001 to 501,564 at September
        30,  2002,   reflecting   higher   termination   rates.   401(K)  case
        terminations increased 45% to 702 for the first nine months of 2002 as
        compared to the first nine months of 2001.

        GENERAL ACCOUNT INVESTMENTS

        The Company's primary investment  objective is to acquire assets whose
        duration and cash flow reflect the  characteristics  of the  Company's
        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  Company's  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  Company's  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  Company's  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>

                                                       June 30,             December 31,
                                                         2002                   2001
                                                   ------------------    -------------------
<S>                                                           <C>                    <C>
                           AAA                                59  %                  58  %
                           AA                                  9  %                   9  %
                            A                                 14  %                  14  %
                           BBB                                16  %                  16  %
           BB and Below (non-investment grade)                 2  %                   3  %
                                                   -------------- ---    --------------- ---

                          TOTAL                            100.0  %               100.0  %
                                                   ============== ===    =============== ===
</TABLE>

        During the first nine months of 2002,  net  unrealized  gains on fixed
        maturities  included  in  stockholder's   equity,   which  is  net  of
        policyholder-related  amounts and  deferred  income  taxes,  increased
        stockholder's equity by $101.7 million.

        CRITICAL ACCOUNTING POLICIES

        The preparation of financial  statements in conformity with accounting
        principles generally accepted in the United States of America requires
        the   Company's   management  to  make  a  variety  of  estimates  and
        assumptions.  These  estimates  and  assumptions  affect,  among other
        things, the reported amounts of assets and liabilities, the disclosure
        of  contingent  liabilities  and the reported  amounts of revenues and
        expenses.  Actual  results  can  differ  from the  amounts  previously
        estimated,  which were based on the information  available at the time
        the estimates were made.

        The critical  accounting  policies  described below are those that the
        Company  believes  are  important to the  portrayal  of the  Company's
        financial condition and results,  and which require management to make
        difficult,  subjective and/or complex judgments.  Critical  accounting
        policies  cover  accounting  matters  that  are  inherently  uncertain
        because the future resolution of such matters is unknown.  The Company
        believes that critical  accounting  policies  include policy reserves,
        allowances for credit losses,  deferred policy  acquisition costs, and
        valuation of privately placed fixed maturities.

        Policy Reserves

        Life  Insurance  and  Annuity  Reserves - Life  insurance  and annuity
        policy reserves with life  contingencies  are computed on the basis of
        estimated mortality, investment yield, withdrawals, future maintenance
        and settlement expenses,  and retrospective  experience rating premium
        refunds.  Annuity  contract  reserves without life  contingencies  are
        established at the contractholder's account value.

        Reinsurance - Policy reserves ceded to other  insurance  companies are
        carried as a reinsurance  receivable on the balance sheet. The cost of
        reinsurance  related to long-duration  contracts is accounted for over
        the  life  of the  underlying  reinsured  policies  using  assumptions
        consistent  with those used to account  for the  underlying  policies.
        Reinsurance  contracts do not relieve the Company from its obligations
        to  policyholders.  Failure of reinsurers  to honor their  obligations
        could  result in losses to the  Company.  The  Company  evaluates  the
        financial  condition of its reinsurers and monitors  concentrations of
        credit risk arising from similar geographic  regions,  activities,  or
        economic characteristics of the reinsurers to minimize its exposure to
        significant losses from reinsurer  insolvencies.  In the normal course
        of  business,  the Company  seeks to limit its exposure to loss on any
        single  insured  and to recover a portion of  benefits  paid by ceding
        risks  to  other  insurance  enterprises  under  excess  coverage  and
        co-insurance contracts.  The Company retains a maximum of $1.5 million
        of coverage per individual life.

        Policy  and  Contract  Claims - Policy  and  contract  claims  include
        provisions   for  reported  life  and  health  claims  in  process  of
        settlement,  valued  in  accordance  with  the  terms  of the  related
        policies and contracts,  as well as provisions for claims incurred and
        unreported based primarily on prior experience of the Company.

        Allowance For Credit Losses

        The Company  maintains an allowance for credit losses at a level that,
        in management's  opinion, is sufficient to absorb credit losses on its
        amounts  receivable  related to  uninsured  accident  and health  plan
        claims  paid on  behalf of  policyholders  and  premiums  in course of
        collection,  and  to  absorb  credit  losses  on its  impaired  loans.
        Management's  judgement is based on past loss  experience  and current
        and projected economic conditions,  and extensive situational analysis
        of each individual loan. The measurement of impaired loans is based on
        the fair value of the collateral.

        Deferred Policy Acquisition Costs

        Policy acquisition costs, which primarily consist of sales commissions
        and costs  associated with the Company's  group sales  representatives
        related to the  production of new business,  have been deferred to the
        extent  recoverable.  These  costs  are  variable  in  nature  and are
        dependent  upon  sales  volume.  Deferred  costs  associated  with the
        annuity products are being amortized over the life of the contracts in
        proportion   to  the   emergence  of  gross   profits.   Retrospective
        adjustments  of these  amounts are made when the  Company  revises its
        estimates  of  current  or  future  gross   profits.   Deferred  costs
        associated  with  traditional  life  insurance are amortized  over the
        premium paying period of the related policies in proportion to premium
        revenues recognized.

        Valuation Of Privately Placed Fixed Maturities

        The  estimated  fair  values  of  financial   instruments   have  been
        determined  using  available  information  and  appropriate  valuation
        methodologies.   However,   considerable   judgement  is  required  to
        interpret market data to develop estimates of fair value. Accordingly,
        the estimates presented are not necessarily  indicative of the amounts
        the Company could  realize in a current  market  exchange.  The use of
        different market assumptions and/or estimation  methodologies may have
        a material effect on the estimated fair value amounts.

        To determine fair value for fixed maturities not actively traded,  the
        Company  utilizes  discounted cash flows  calculated at current market
        rates on investments of similar quality and term.

        LIQUIDITY AND CAPITAL RESOURCES

        The Company's  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. Liquidity for the Company has remained strong, as evidenced
        by significant amounts of short-term investments and cash that totaled
        $488.0  million  and  $641.4  million  as of  September  30,  2002 and
        December 31, 2001, 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 Company's capital resources  represent
        funds  available  for  long-term  business  commitments  and primarily
        consist of retained  earnings and proceeds from the issuance of 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  Company's  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 Company's  existing
        business.

        Additional liquidity is available through the Company's  participation
        in repurchase  agreements with third party brokers and the issuance of
        commercial  paper.  The  Company  had  $281.1  million  of  repurchase
        agreements at September  30, 2002,  compared to $250.9 at December 31,
        2001. The Company's  participation in repurchase agreements depends on
        current market conditions, and as a result, fluctuations may occur.

        The Company's 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 $97.0 million of
        commercial  paper  outstanding at September 30, 2002, and December 31,
        2001.  The  commercial  paper  has  been  given a  rating  of A-1 + by
        Standard & Poor's Corporation and a rating of P-1 by Moody's Investors
        Service, each being the highest rating available.

       OBLIGATIONS RELATING TO DEBT AND LEASES FOR THE FULL YEAR ARE AS FOLLOWS:
<TABLE>
<CAPTION>
                              2002       2003       2004       2005       2006      Thereafter
                             --------   --------   --------   --------   --------   -----------
<S>                           <C>        <C>        <C>        <C>        <C>        <C>
        Subordinated
         debentures        $          $          $          $          $          $      175.0
        Related party                                                      25.0
        note
        Operating leases        7.9       28.9       23.3       20.7       17.9           38.0
                             --------   --------   --------   --------   --------   -----------
        Total contractual
          obligations      $    7.9   $   28.9   $   23.3   $   20.7   $   42.9   $      213.0
                             ========   ========   ========   ========   ========   ===========
</TABLE>

Item 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

        The Company's  assets are purchased to fund future benefit payments to
        its  policyholders  and  contractholders.  The  primary  risk of these
        assets is exposure to rising interest rates. The Company's exposure to
        foreign currency exchange rate fluctuations is minimal as only nominal
        foreign investments are held.

        To manage  interest rate risk, the Company  invests in assets that are
        suited to the  products  that it sells.  For  products  with fixed and
        highly predictable benefit payments such as certificate  annuities and
        payout annuities, the Company invests in fixed income assets with cash
        flows that closely match the liability product cash flows. The Company
        is then protected against interest rate changes,  as any change in the
        fair  value of the  assets  will be offset by a similar  change in the
        fair value of the  liabilities.  For products with uncertain timing of
        benefit payments such as portfolio  annuities and life insurance,  the
        Company  invests in fixed income  assets with expected cash flows that
        are earlier  than the  expected  timing of the benefit  payments.  The
        Company  can then react to  changing  interest  rates  sooner as these
        assets mature for reinvestment.

        The Company also manages risk with interest rate  derivatives  such as
        interest  rate caps that would pay the  Company  investment  income if
        interest rates rise above the level  specified in the cap. The Company
        also uses interest rate swaps to convert cash flow from  variable-rate
        investments to fixed amounts to match such cash flows to expected cash
        flows on its liabilities to policyholders.  These derivatives are only
        used to reduce risk and are not used for speculative purposes.

        To manage  foreign  currency  exchange risk, the Company uses currency
        swaps to convert foreign currency back to United States dollars. These
        swaps are purchased each time a foreign currency  denominated asset is
        purchased.

        There are no significant changes to the Company's market risk position
        from December 31, 2001.

Item 4. CONTROLS AND PROCEDURES

        Based on their  evaluation as of October 25, 2002, the Chief Executive
        Officer and Chief Financial  Officer have concluded that the Company's
        Disclosure  Controls and  Procedures  are  effective in ensuring  that
        information  relating  to the Company  and its  subsidiaries  which is
        required  to be  disclosed  in  reports  filed  under  the  Securities
        Exchange Act of 1934 is (i)  accumulated,  processed and reported in a
        timely  manner;   and  (ii)   communicated  to  the  Company's  senior
        management,  including the President and Chief  Executive  Officer and
        the Executive  Vice  President and Chief  Financial  Officer,  so that
        timely decisions may be made regarding disclosure.

        The Chief Executive Officer and Chief Financial Officer hereby confirm
        that,  since the date of their  evaluation on October 25, 2002,  there
        were no significant  changes in the Company's  internal controls or in
        other factors that could significantly  affect these internal controls
        including   any   corrective   actions  with  regard  to   significant
        deficiencies and material weaknesses.



PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

         There are no material  pending legal  proceedings to which the Company
         or any  of its  subsidiaries  is a  party  or of  which  any of  their
         property is the subject.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

        (a)    Index to Exhibits

               None

        (b)    Reports on Form 8-K

               A report on Form 8-K, dated July 30, 2002, was filed disclosing
               the Company's second quarter results as of June 30, 2002.

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:     November 14, 2002
        ---------------------------------------         ------------------------
        Glen R. Derback, Vice President and Controller
        (Duly authorized officer and chief accounting officer)

<PAGE>


CERTIFICATIONS

I, William T. McCallum, certify that:

1.   I have reviewed  this  quarterly  report on Form 10-Q of GWL&A Financial
     Inc. (the "registrant");

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a)   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b)   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c)   presented  in  this  quarterly   report  our   conclusion   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a)   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b)   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6.   The  registrant's  other  certifying  officers and I have indicated in this
     quarterly report whether or not there were significant  changes in internal
     controls  or in other  factors  that could  significantly  affect  internal
     controls  subsequent to the date of our most recent  evaluation,  including
     any corrective actions with regard to significant deficiencies and material
     weaknesses.


    Date: November 14, 2002



                                       /s/ William T. McCallum
                                       William T. McCallum
                                       President and Chief Executive Officer

<PAGE>

I, Mitchell T.G. Graye, certify that:

1.   I have reviewed  this  quarterly  report on Form 10-Q of GWL&A Financial
     Inc. (the "registrant");

2.   Based on my knowledge,  this  quarterly  report does not contain any untrue
     statement of a material fact or omit to state a material fact  necessary to
     make the statements  made, in light of the  circumstances  under which such
     statements  were made, not misleading with respect to the period covered by
     this quarterly report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in this  quarterly  report,  fairly  present  in all
     material respects the financial  condition,  results of operations and cash
     flows of the  registrant  as of, and for,  the  periods  presented  in this
     quarterly report;

4.   The  registrant's  other  certifying  officers  and I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

     a.   designed  such  disclosure  controls  and  procedures  to ensure  that
          material  information  relating  to  the  registrant,   including  its
          consolidated subsidiaries,  is made known to us by others within those
          entities,  particularly  during  the  period in which  this  quarterly
          report is being prepared;

     b.   evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures as of a date within 90 days prior to the filing date of
          this quarterly report (the "Evaluation Date"); and

     c.   presented  in  this  quarterly   report  our   conclusion   about  the
          effectiveness  of the disclosure  controls and procedures based on our
          evaluation as of the Evaluation Date;

5.   The registrant's other certifying  officers and I have disclosed,  based on
     our most recent  evaluation,  to the  registrant's  auditors  and the audit
     committee of  registrant's  board of directors (or persons  performing  the
     equivalent function):

     a.   all  significant  deficiencies  in the design or operation of internal
          controls  which could  adversely  affect the  registrant's  ability to
          record,  process,   summarize  and  report  financial  data  and  have
          identified for the  registrant's  auditors any material  weaknesses in
          internal controls; and

     b.   any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          controls; and

6. The  registrant's  other  certifying  officers  and I have  indicated in this
quarterly  report  whether or not there  were  significant  changes in  internal
controls or in other factors that could  significantly  affect internal controls
subsequent to the date of our most recent  evaluation,  including any corrective
actions with regard to significant deficiencies and material weaknesses.


    Date: November 14, 2002



                                  /s/ Mitchell T.G. Graye
                                  Mitchell T.G. Graye
                                  Executive Vice President and
                                  Chief Financial Officer