UNITED STATES

                                          SECURITIES AND EXCHANGE COMMISSION

                                                Washington, D.C. 20549

                                                      FORM 10-Q

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

<S>                                                                            <C>
For the quarterly period ended                                           June 30, 2004
                                          ----------------------------------------------------------------------------

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)

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

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
             -----------------           -----------------

Indicate by check mark whether the registrant is an accelerated filer as defined in 240.12(b)-2 of this chapter.

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

The public may read and copy any of the registrant's reports filed with the SEC at the SEC's Public Reference Room,
450 Fifth Street NW, Washington DC 20549, telephone 1-800-SEC-0330 or online at (http://www.sec.gov).

As of August 1, 2004, 50,025 shares of the registrant's common stock were outstanding, all of which were owned by
the registrant's parent company.

</TABLE>

<TABLE>
<CAPTION>


                                                  TABLE OF CONTENTS


Part I       FINANCIAL INFORMATION                                                                            Page
                                                                                                           -----------
<S>               <C>                                                                                          <C>
             Item 1   Financial Statements                                                                     3

                      Consolidated Statements of Income                                                        3

                      Consolidated Balance Sheets                                                              4

                      Consolidated Statements of Cash Flows                                                    6

                      Consolidated Statements 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                                                                            13

             Item 3   Quantitative and Qualitative Disclosures About Market Risk                               22

             Item 4   Controls and Procedures                                                                  22

Part II      OTHER INFORMATION                                                                                 23

             Item 1   Legal Proceedings                                                                        23

             Item 6   Exhibits and Reports on Form 8-K                                                         23

             Signature                                                                                         23
</TABLE>


PART I     FINANCIAL INFORMATION

ITEM 1     FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
GWL&A FINANCIAL INC.

CONSOLIDATED STATEMENTS OF INCOME
[Dollars in Thousands]
======================================================================================================================
[Unaudited]
                                                     Three Months Ended                    Six Months Ended
                                                          June 30,                             June 30,
                                              ---------------------------------    ---------------------------------
REVENUES:                                          2004              2003               2004               2003
                                              ---------------   ---------------    ---------------    ---------------
  <S>                                               <C>                 <C>              <C>                <C>
  Premium income (net of
  premiums ceded totaling
   $112,328, $35,689,
   $440,741, and, $44,240)                 $      160,684     $       233,693   $        202,934   $        507,596
 Fee income                                       230,623             206,601            441,179            422,475
 Net investment income                            238,362             206,116            519,601            420,748
  Net realized (losses) gains on
    investments                                   (20,048)             24,535             17,469             50,850
                                              ---------------   ---------------    ---------------    ---------------

                                                  609,621             670,945          1,181,183          1,401,669
                                              ---------------   ---------------    ---------------    ---------------
BENEFITS AND EXPENSES:

  Life and other policy benefits
    (net of reinsurance recoveries
   totaling $104,500, $12,006,
   $192,915, and $22,410)                         228,268             189,274            440,433            376,681
  (Decrease) increase in reserves                 (61,465)              1,157           (263,061)            54,169
  Interest paid or credited to
    contractholders                                94,855             129,914            211,443            244,591
  Provision for policyholders' share
   of earnings on participating
   business                                         1,962               3,285              6,551              5,646
  Dividends to policyholders                       20,469              15,726             57,475             40,529
                                              ---------------   ---------------    ---------------    ---------------
                                                  284,089             339,356            452,841            721,616

  Commissions                                      47,641              40,207             98,950             80,107
  Operating expenses                              191,032             164,016            386,802            335,305
  Premium taxes                                     7,696               8,554             14,963             15,216
                                              ---------------   ---------------    ---------------    ---------------
                                                  530,458             552,133            953,556          1,152,244
                                              ---------------   ---------------    ---------------    ---------------
INCOME BEFORE INCOME
  TAXES                                            79,163             118,812            227,627            249,425

PROVISION FOR INCOME
  TAXES:
  Current                                          26,611              34,281             88,702             61,354
  Deferred                                         (2,216)              5,180            (13,782)            22,781
                                              ---------------   ---------------    ---------------    ---------------
                                                   24,395              39,461             74,920             84,135
                                              ---------------   ---------------    ---------------    ---------------

NET INCOME                                 $       54,768     $        79,351   $        152,707   $        165,290
                                              ===============   ===============    ===============    ===============


</TABLE>

See notes to consolidated financial statements.

<TABLE>
<CAPTION>

GWL&A FINANCIAL INC.

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

                                                                             June 30,               December 31,
ASSETS                                                                         2004                     2003
                                                                        --------------------    ---------------------
                                                                            [unaudited]
INVESTMENTS:
  <S>                                                                           <C>                     <C>
  Fixed maturities available-for-sale, at fair value
    (amortized cost $12,320,586 and $12,757,614)                    $         12,433,779     $        13,136,564
  Mortgage loans on real estate (net of allowances
    of $27,889 and $31,889)                                                    1,693,834               1,885,812
  Equity investments, at fair value (cost $525,951 and
    $407,797)                                                                    556,824                 433,259
  Real estate                                                                      7,837                   7,912
  Policy loans                                                                 3,499,259               3,389,534
  Short-term investments, available-for-sale
    (cost approximates fair value)                                             1,124,025                 853,716
                                                                        --------------------    ---------------------


    Total investments                                                         19,315,558              19,706,797

OTHER ASSETS:
  Cash                                                                           153,031                 188,383
  Reinsurance receivable
     Related party                                                             1,093,786               1,312,139
     Other                                                                       310,740                 320,744
  Deferred policy acquisition costs                                              307,511                 280,672
  Deferred ceding commission                                                     268,535                 289,359
  Investment income due and accrued                                              142,598                 165,417
  Amounts receivable related to uninsured accident
    and health plan claims (net of allowances of
    $29,138 and $32,329)                                                         131,834                 129,031
  Premiums in course of collection (net of allowances
    of $8,871 and $9,768)                                                         53,388                  75,809
  Deferred income taxes                                                          190,042                 122,162
  Other assets                                                                   954,741                 754,160
SEPARATE ACCOUNT ASSETS                                                       13,390,351              13,175,480
                                                                        --------------------    ---------------------






TOTAL ASSETS                                                        $         36,312,115     $        36,520,153
                                                                        ====================    =====================

                                                                                                    (continued)


GWL&A FINANCIAL INC.

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

                                                                             June 30,               December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY                                           2004                     2003
                                                                        --------------------    ---------------------
                                                                            [unaudited]
POLICY BENEFIT LIABILITIES:
  Policy reserves                                                   $         18,275,700     $        18,650,078
  Policy and contract claims                                                     370,858                 418,930
  Policyholder' funds                                                           367,905                 368,076
  Provision for policyholders' dividends                                          85,727                  89,121
  Undistributed earnings on participating business                               183,295                 177,175

GENERAL LIABILITIES:
  Due to GWL                                                                      28,759                  30,950
  Repurchase agreements                                                          466,871                 389,715
  Commercial paper                                                                97,269                  96,432
  Junior subordinated debentures                                                 180,449                 180,449
  Other liabilities                                                              992,104               1,056,534
SEPARATE ACCOUNT LIABILITIES                                                  13,390,351              13,175,480
                                                                        --------------------    ---------------------
    Total liabilities                                                         34,439,288              34,632,940
                                                                        --------------------    ---------------------

STOCKHOLDER'S EQUITY:

  Preferred stock, $1 par value, 50,000,000 shares
    authorized; 0 shares issued and outstanding
  Common stock, $1 par value; 500,000 shares
    authorized; 50,025 shares issued and outstanding                                 250                     250
  Additional paid-in capital                                                     730,831                 729,397
  Accumulated other comprehensive income                                           7,172                 127,811
  Retained earnings                                                            1,134,574               1,029,755
                                                                        --------------------    ---------------------
    Total stockholder's equity                                                 1,872,827               1,887,213
                                                                        --------------------    ---------------------










TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                          $         36,312,115     $        36,520,153
                                                                        ====================    =====================

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,
                                                                        ---------------------------------------------
OPERATING ACTIVITIES:                                                          2004                     2003
                                                                        --------------------    ---------------------


  Net income                                                        $            152,707     $           165,290
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Earnings allocated to participating policyholders                              6,551                   5,646
    Amortization of investments                                                   26,408                 (33,728)
    Net realized gains on investments
     and write-downs of mortgage loans and real estate                           (17,469)                (50,850)
    Depreciation and amortization                                                 32,873                  17,907
    Deferred income taxes                                                        (13,782)                 22,781
  Changes in assets and liabilities:
    Policy benefit liabilities                                                  (167,822)                256,797
    Reinsurance receivable                                                       108,482                  12,070
    Accrued interest and other receivables                                        35,875                  22,161
    Other, net                                                                  (132,379)                (35,636)
                                                                        --------------------    ---------------------

    Net cash provided by operating activities                                     31,444                 382,438
                                                                        --------------------    ---------------------

INVESTING ACTIVITIES:

  Proceeds from sales, maturities, and redemptions
    of investments:
    Fixed maturities available-for-sale:
     Sales                                                                     6,025,832               1,887,963
     Maturities and redemptions                                                1,125,872               4,154,422
    Mortgage loans                                                               177,231                  77,751
    Real estate                                                                                            3,000
    Common stock                                                                  46,130                   7,638
  Purchases of investments:
    Fixed maturities held-to-maturity                                         (6,984,793)             (6,248,831)
    Mortgage loans                                                                (8,003)
    Real estate                                                                       (4)                   (496)
    Common stock                                                                (158,906)                 (7,948)
    Other, net                                                                  (158,967)                311,847
                                                                        --------------------    ---------------------

    Net cash provided by investing activities                                     64,392                 185,346
                                                                        --------------------    ---------------------










                                                                                                    (continued)


GWL&A FINANCIAL INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS
[Dollars in Thousands]
======================================================================================================================
[Unaudited]
                                                                                      Six Months Ended
                                                                                          June 30,
                                                                        ---------------------------------------------
FINANCING ACTIVITIES:                                                          2004                     2003
                                                                        --------------------    ---------------------

  Contract withdrawals, net of deposits                             $           (159,102)    $          (265,035)
  Due to GWL                                                                      (2,191)                 (7,800)
  Dividends paid                                                                 (47,888)                (45,699)
  Commercial paper borrowings, net                                                   837                   5,387
  Repurchase agreements borrowings (repayments), net                              77,156                (135,279)
                                                                        --------------------    ---------------------

    Net cash (provided by) financing activities                                 (131,188)               (448,426)
                                                                        --------------------    ---------------------

NET (DECREASE) INCREASE IN CASH                                                  (35,352)                119,358

CASH, BEGINNING OF YEAR                                                          188,383                 154,631
                                                                        --------------------    ---------------------

CASH, END OF PERIOD                                                 $            153,031     $           273,989
                                                                        ====================    =====================








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

<TABLE>

GWL&A FINANCIAL INC.

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 2004 [Dollars and Shares in Thousands]
================================================================================
[Unaudited]

                                                                                         Accumulated Other
                                                                                   Comprehensive Income (Loss)
                                                                                    --------------------------
                                                                                   Unrealized      Minimum
                               Preferred Stock         Common Stock    Additional   Gains          Pension
                             -------------------  -------------------    Paid-in   (Losses)on     Liability    Retained
                             Shares     Amount    Shares     Amount      Capital   Securities    Adjustment    Earnings     Total
                             --------   -------- ---------   --------  ----------  -----------   ----------   ----------  ---------
<S>                            <C>     <C>         <C>      <C>        <C>         <C>          <C>          <C>         <C>
BALANCE, JANUARY 1, 2004          0   $      0    50,025   $    250   $  729,397  $   137,122  $    (9,311) $ 1,029,755 $ 1,887,213

  Net income                                                                                                    152,707     152,707
  Other comprehensive income                                                         (120,639)                             (120,639)
                                                                                                                          ---------
Total comprehensive income                                                                                                   32,068
                                                                                                                          ---------
Dividends                                                                                                       (47,888)    (47,888)
Income tax benefit on stock
  compensation                                                             1,434                                              1,434

                             --------   -------- ---------   --------  ----------  -----------   ----------   ----------  ---------

BALANCE, JUNE 30, 2004            0   $      0    50,025   $    250   $  730,831  $    16,483  $    (9,311) $ 1,134,574 $ 1,872,827
                             ========   ======== =========   ========  ==========  ===========   ==========   ==========  =========


</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 Company's latest annual report
         on Form 10-K for the year ended December 31, 2003.

         Operating results for the six months ended June 30, 2004 are not
         necessarily indicative of the results that may be expected for the full
         year ending December 31, 2004.

         The Company has two reportable segments: Great-West Healthcare and
         Financial Services. The Great-West Healthcare segment markets group
         life and health insurance to small and mid-sized corporate employers.
         The Financial Services segment markets and administers savings products
         to public and not-for-profit employers, corporations, and individuals
         and offers life insurance products to individuals and businesses. The
         Company's reportable segments are strategic business units that offer
         different products and services. They are managed separately as each
         segment has unique distribution channels.

         At June 30, 2004, the Company has a stock option plan that provides for
         the granting of options on common shares of Great-West Lifeco Inc.
         (Lifeco), of which the Company is an indirect wholly-owned subsidiary,
         to certain officers and employees of Lifeco and its subsidiaries,
         including the Company. The Company accounts for the plan under
         recognition and measurement principles of APB Opinion No. 25
         "Accounting for Stock Issued to Employees," and related interpretations
         as allowed by FASB Statement No. 123, "Accounting for Stock-Based
         Compensation" (FASB No. 123). No stock-based employee compensation cost
         is reflected in net income, as all options granted under this plan had
         an exercise price equal to the market value of the underlying common
         stock on the date of grant. The following table illustrates the effect
         on net income if the Company had applied the fair value recognition
         provisions of FASB No.123 to stock-based employee compensation.

<TABLE>

                                                   For the three months ended          For the six months ended
                Proforma Disclosures                        June 30,                           June 30,
                                                  ------------------------------     ------------------------------
                     [Thousands]                      2004             2003              2004             2003
         ------------------------------------     -------------    -------------     -------------    -------------

<S>                                           <C>               <C>              <C>               <C>
          Net income as reported              $       54,768    $      79,351    $      152,707    $     165,290
          Less compensation for fair value
           of stock options, net of related
           tax effects                                   900              742             1,920            1,401
                                                  -------------    -------------     -------------    -------------
                                                  -------------    -------------     -------------    -------------
          Proforma net income                 $       53,868    $      78,609    $      150,787    $     163,889
                                                  =============    =============     =============    =============
</TABLE>

2.       NEW ACCOUNTING PRONOUNCEMENTS

         In January 2004, FASB reissued Interpretation No. 46 (FIN 46),
         "Consolidation of Variable Interest Entities" as FIN 46R. This
         Interpretation addresses consolidation by business enterprises of
         variable interest entities (VIE), which have one or both of the
         following characteristics: a) insufficient equity investment at risk,
         or b) insufficient control by equity investors. This guidance, as
         reissued, is effective for VIEs created after January 31, 2003, and for
         pre-existing VIEs as of March 31, 2004. In conjunction with the
         issuance of this guidance, the Company conducted a review of its
         involvement with VIEs and confirmed it does not have any investments or
         ownership in VIEs.

         In July 2003, the Accounting Standards Executive Committee (AcSEC) of
         the American Institute of Certified Public Accountants (AICPA) issued
         Statement of Position (SOP) 03-01, "Accounting and Reporting by
         Insurance Enterprises for Certain Nontraditional Long-Duration
         Contracts and for Separate Accounts." AcSEC developed the SOP to
         address the evolution of product designs since the issuance of SFAS No.
         60, "Accounting and Reporting by Insurance Enterprises," and SFAS No.
         97, "Accounting and Reporting by Insurance Enterprises for Certain
         Long-Duration Contracts and for Realized Gains and Losses from the Sale
         of Investments." SOP 03-1 provides guidance related to the reporting
         and disclosure of certain insurance contracts and separate accounts,
         including guidance for computing reserves for products with guaranteed
         benefits, such as guaranteed minimum death benefits, and for products
         with annuitization benefits such as guaranteed minimum income benefits.
         In addition, SOP 03-1 addresses certain issues related to the
         presentation and reporting of separate accounts, as well as rules
         concerning the capitalization and amortization of sales inducements.
         SOP 03-1 was effective January 1, 2004. The adoption of SOP 03-1 did
         not have a material effect on the Company's consolidated financial
         statements.

         In January 2004, FASB issued Emerging Issues Task Force ("EITF") Issue
         No. 03-1, The Meaning of Other-Than Temporary Impairment and It's
         Application to Certain Investments ("EITF 03-1"). EITF 03-1 provides
         guidance on the disclosure requirements for other-than-temporary
         impairments of debt and marketable equity investments that are
         accounted for under SFAS No. 115, Accounting for Certain Investments in
         Debt and Equity Securities ("SFAS 115"). The adoption of EITF 03-1
         would require the Company to include certain quantitative and
         qualitative disclosures for debt and marketable equity securities
         classified as available-for-sale or held-to-maturity under SFAS 115
         that are impaired at the balance sheet date but for which an
         other-than-temporary impairment has not been recognized. The Company
         does not anticipate that the adoption of this issue would have a
         material impact on the Company's financial position or results of
         operations.

3.       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 $175.0 million of subordinated
         capital income securities. The sole assets of the Trust are the $180.4
         million 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. As discussed in note 2
         above, the Trust is not consolidated in accordance with FIN 46R.


4.       RELATED-PARTY TRANSACTIONS

         On August 31, 2003, the Company and The Canada Life Assurance Company
         (CLAC), a wholly owned subsidiary of Canada Life Financial Corporation,
         entered into an Indemnity Reinsurance Agreement pursuant to which the
         Company reinsured 80% (45% coinsurance and 35% coinsurance with funds
         withheld) of certain United States life, health and annuity business of
         CLAC's U.S. branch.

         On February 29, 2004, CLAC recaptured the group life and health
         business from the Company associated with the original Indemnity
         Reinsurance Agreement dated August 31, 2003. The Company recorded $256
         million of negative premium income and decrease in reserves associated
         with these policies. The Company recorded, at fair value, the following
         at February 29, 2004 as a result of this transaction:

<TABLE>

         Assets (millions)                                          Liabilities and Stockholder's Equity (millions)
         --------------------------------------------------------   ------------------------------------------------

<S>                                        <C>                                                  <C>
         Cash                              $             (126)      Policy reserves             $            (280)
         Reinsurance receivable                          (148)      Policy and contract claims                (33)
         Deferred ceding commission                       (24)
         Premiums in course of collection                 (15)

                                              -------------------                                  -----------------
                                           $             (313)                                  $            (313)
                                              ===================                                  =================
</TABLE>


5.       REINSURANCE

         In addition to the Indemnity Reinsurance Agreement entered into with
         CLAC (see 4 above), the Great-West Healthcare division of the Company
         entered into a reinsurance agreement during 2003 with Allianz Risk
         Transfer (Bermuda) Limited (Allianz) to cede 90% in 2003 and 75% in
         2004 of direct written group health stop-loss and excess loss activity.



6.       COMPONENTS OF NET PERIODIC BENEFIT COST

         The cost of employee benefit plans, included in operating expenses, is
as follows:

<TABLE>
                                                                            Post-Retirement
                                                    Pension Benefits          Medical Plan
                                                  ---------------------   ---------------------
                                                     For the Second Quarter Ended June 30,
                    [Thousands]                    2004         2003        2004        2003
      ----------------------------------------    --------    ---------   ---------   ---------

<S>                                            <C>         <C>          <C>         <C>
         Service cost                          $    2,144  $    2,067   $     722   $     512
         Interest cost                              3,329       3,069         684         567
         Expected return on plan assets obligation (3,733)     (3,238)
         Amortization of transition                  (379)       (379)
         Amortization of unrecognized prior
           service cost                               158         158        (178)       (178)
         Amortization of gain from earlier
           periods                                    688         872         166          65
                                                  --------    ---------   ---------   ---------
         Net periodic cost                     $    2,207  $    2,549   $   1,394   $     966
                                                  ========    =========   =========   =========


                                                                            Post-Retirement
                                                    Pension Benefits          Medical Plan
                                                  ---------------------   ---------------------
                                                       For the Six Months Ended June 30,
                    [Thousands]                    2004         2003        2004        2003
      ----------------------------------------    --------    ---------   ---------   ---------

         Service cost                          $    4,288  $    4,134   $   1,444   $   1,022
         Interest cost                              6,658       6,138       1,368       1,136
         Expected return on plan assets            (7,466)     (6,478)
         Amortization of transition obligation       (758)       (758)
         Amortization of unrecognized prior
           service cost                               316         316        (356)       (356)
         Amortization of gain from earlier
           periods                                  1,376       1,746         332         130
                                                  --------    ---------   ---------   ---------
         Net periodic cost                     $    4,414  $    5,098   $   2,788   $   1,932
                                                  ========    =========   =========   =========

</TABLE>

         The Company previously disclosed in its consolidated financial
         statements for the year ended December 31, 2003, that it expected to
         contribute $4.8 million to fund its pension plan in 2004. As of June
         30, 2004, no contributions have been made. The Company anticipates
         contributing $4.8 million to fund its pension plan in 2004.

7.       OTHER

         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 consolidated financial
         position or results of operations.

         Certain reclassifications have been made to the 2003 consolidated
         financial statements to conform to the 2004 presentation. These changes
         in classification had no effect on previously reported stockholder's
         equity or net income.


Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
         OF OPERATIONS

         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 June 30, 2004, compared with December 31, 2003, and its
         results of operations for the quarter and six months ended June 30,
         2004, compared with the same periods in 2003. 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, 2003, to which the reader is directed for additional
         information.

<TABLE>

                   Operating Summary                  Three Months Ended June 30,         Six Months Ended June 30,
                                                    --------------------------------    ------------------------------
                       [Millions]                       2004               2003             2004             2003
         ---------------------------------------    --------------     -------------    -------------     ------------

<S>                                              <C>               <C>               <C>              <C>
         Premium income                          $           161   $            234  $           203  $            507
         Fee income                                          230                207              441               422
         Net investment income                               239                206              520               421
         Realized investment (losses) gains                  (20)                24               17                51
                                                    --------------     -------------    -------------     ------------
         Total revenues                                      610                671            1,181             1,401

         Total benefits and
          expenses                                           531                552              953             1,152
         Income tax expenses                                  24                 40               75                84
                                                    --------------     -------------    -------------     ------------
         Net income                              $            55   $             79  $           153  $            165
                                                    ==============     =============    =============     ============

         Deposits for investment-
          type contracts                         $           174   $            122  $           344  $            269
         Deposits to separate
          accounts                                           456                480              992             1,050
         Self-funded premium
          equivalents                                      1,158              1,205            2,325             2,402

</TABLE>

<TABLE>

                               Balance Sheet                                June 30,         December 31,
                                 [Millions]                                   2004               2003
         -----------------------------------------------------------     ---------------    ----------------

<S>                                                                  <C>                 <C>
         Investment assets                                           $         19,316    $        19,707
         Separate account assets                                               13,390             13,175
         Total assets                                                          36,312             36,520
         Total policy benefit liabilities                                      19,283             19,703
         Due to GWL                                                                29                 31
         Junior subordinated debentures                                           180                180
         Total stockholder's equity                                             1,873              1,887
</TABLE>

         CONSOLIDATED RESULTS

         The Company's consolidated net income decreased $24 million or 30% for
         the second quarter of 2004 when compared to the same period in 2003.
         The net income decrease reflects a $10 million decrease as a result of
         the July 2003 purchase of Canada Life Insurance Company of America
         (CLICA) and Canada Life Insurance Company of New York (CLNY) and the
         August 2003 Indemnity Reinsurance Agreement with CLAC discussed in Note
         3 to the condensed consolidated financial statements (collectively
         referred to as Canada Life activity), a $1 million increase in the
         Financial Services segment excluding the impact of the Canada Life
         activity and an $15 million decrease in the Great-West Healthcare
         segment excluding the Canada Life activity. The $10 million decrease in
         the Canada Life activity net income is primarily due to $9.8 million of
         losses, net of tax, resulting from the change in fair value of the
         derivative financial instrument discussed in Item 3 - Qualitative and
         Quantitative Disclosures About Market Risk.

         The Company's consolidated net income decreased $12 million or 7% for
         the first six months of 2004 when compared to the same period in 2003.
         The net income decrease reflects a $23 million decrease in the
         Great-West Healthcare segment excluding the Canada Life activity and a
         $6 million decrease in the Financial Services segment excluding the
         impact of the Canada Life activity, offset by a $17 million increase as
         a result of the Canada Life activity. Included in the Canada Life
         activity net income is $7.1 million of losses, net of tax, resulting
         from the change in fair value of the derivative financial instrument
         discussed in Item 3 - Qualitative and Quantitative Disclosures About
         Market Risk.

         Total revenues decreased $61 million or 9% for the second quarter of
         2004 when compared to the same period in 2003. The decrease in total
         revenue in the second quarter was primarily due to a $73 million
         decrease in premium income and a $44 million decrease in realized gains
         on investments offset by a $23 million increase in fee income and a $33
         million increase in net investment income.

         Total revenues decreased $220 million or 16% for the first six months
         of 2004 when compared to 2003. The decrease in total revenue in the
         first six months was primarily due to a $304 million decrease in
         premium income partially offset by a $99 million increase in net
         investment income. A $394 million decrease in premium income in the
         Great-West Healthcare segment primarily resulting from the negative
         premiums associated with the recapture of group life and health
         premiums by CLAC was offset by a $90 million increase in premium income
         in the Financial Services segment. A $104 million increase in the net
         investment income in the Financial Services segment was primarily due
         to $128 million of Canada Life activity offset by a $24 million
         decrease primarily resulting from the decline in investment earned
         rates.

         Benefits and expenses decreased $21 million or 4% for the second
         quarter of 2004 when compared to the same period in 2003. The decrease
         in benefits and expenses is primarily due to a $74 million decrease in
         the Great-West Healthcare segment primarily resulting from the Allianz
         reinsurance cession, offset by a $53 million increase in the Financial
         Services segment primarily as a result of the Canada Life activity.

         Benefits and expenses decreased $199 million or 17% for the first six
         months of 2004 when compared to the first six months in 2003. The
         decrease in benefits and expenses results from a $379 million decrease
         in the Great-West Healthcare segment primarily resulting from the
         recapture of benefit expense by CLAC, offset by a $180 million increase
         in the Financial Services segment primarily as a result of the Canada
         Life activity.

         Income tax expense decreased $9 million or 11% for the first six months
         of 2004 when compared to the same period in 2003 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. These amounts approximate the additional premiums,
         which would have been earned under such contracts if they had been
         written as traditional indemnity or HMO programs.

         Deposits for investment-type contracts increased $52 million or 43% and
         $75 million or 28% for the second quarter and the first six months of
         2004 when compared to the same periods in 2003. These increases
         resulted from increases in the 401(k) line of business and the Canada
         Life activity.

         Deposits for separate accounts decreased $24 million or 5% and $58
         million or 6% for the second quarter and the first six months of 2004
         when compared to the same periods in 2003. The decrease is due to the
         net decrease in contributions in the 401(k) and individual annuity
         lines of business.

         Self-funded premium equivalents decreased $47 million or 4% and $77
         million or 3% for the second quarter and the first six months of 2004
         when compared to the same periods in 2003. The decreases are due to
         lower membership.

         SEGMENT RESULTS

         Great-West Healthcare

         The following is a summary of certain financial data of the Great-West
         Healthcare segment:

<TABLE>


                    Operating Summary                  Three Months Ended June 30,          Six Months Ended June 30,
                                                     --------------------------------    --------------------------------
                       [Millions]                        2004               2003              2004              2003
         ----------------------------------------    --------------     -------------    ---------------    -------------

<S>                                               <C>               <C>               <C>                <C>
         Premium income                           $            92   $            191  $            32    $           426
         Fee income                                           164                151              308                310
         Net investment income                                 10                 15               26                 31
         Realized investment (losses) gains                    (7)                 5                                  10
                                                     --------------     -------------    ---------------    -------------
         Total revenues                                       259                362              366                777

         Total benefits and
          expenses                                            222                296              261                640
         Income tax expenses                                   12                 22               35                 46
                                                     --------------     -------------    ---------------    -------------
         Net income                               $            25   $             44  $            70    $            91
                                                     ==============     =============    ===============    =============

         Self-funded premium
          equivalents                             $         1,158   $          1,205  $         2,325    $         2,402
</TABLE>

         The decrease in earnings for the second quarter and first six months of
         2004 compared to the same periods of 2003 is primarily due to lower
         aggregate stop loss recoveries on prior year deficits.

         Excluding premium and fee income of negative $85 million associated
         with the Allianz reinsurance cession, premium and fee income remained
         relatively unchanged for the second quarter of 2004 when compared to
         the same period of 2003.

         Excluding premium and fee income of negative $208 million associated
         with Canada Life activity and excluding negative $158 million
         associated with the Allianz reinsurance cession, premium and fee income
         decreased $30 million or 4% for the first six months of 2004 when
         compared to the same period of 2003. The decrease is primarily due to a
         decline in membership from June 30, 2003 to June 30, 2004. Including
         39,000 Canada Life stop loss members which renewed in the first six
         months of 2004, the Great-West Healthcare segment experienced a 3.1%
         increase in total health care membership from 1.856 million at December
         31, 2003 to 1.913 million at June 30, 2004. There was a .8% decrease in
         total health care membership from 1.929 million at June 30, 2003 to
         1.913 million at June 30, 2004. The decline in membership during the
         12-month period is due to terminations resulting from pricing action
         related to target margins. However, there was membership growth in the
         first six months of 2004. Canada Life premiums of negative $208 million
         are primarily the result of $256 million of premiums related to a
         recapture of life and health premiums by CLAC associated with the
         original Indemnity Reinsurance Agreement dated August 31, 2003, offset
         by $48 million of normal business activity recorded before the February
         29, 2004 recapture.

         Excluding total benefits and expenses of negative $85 million
         associated with the Allianz reinsurance cession, total benefits and
         expenses increased $11 million or 4% for the second quarter of 2004
         when compared to the same period of 2003. The increase is primarily due
         to lower stop loss recoveries of prior year deficits.

         Excluding total benefits and expenses of negative $211 million
         associated with Canada Life activity and excluding negative $158
         million associated with the Allianz reinsurance cession, total benefits
         and expenses decreased $10 million or 2% for the first six months when
         compared to the same period of 2003. The decrease is due primarily to
         decreased benefits associated with lower membership offset by lower
         stop loss recoveries of prior year deficits. Canada Life total benefits
         and expenses of negative $211 million are primarily the result of $256
         million of change in reserves as a result of the recapture discussed
         above offset by $45 million of normal business activity before the
         February 29, 2004 recapture.

         Self-funded premium equivalents decreased $47 million or 4% and $77
         million or 3% for the second quarter and the first six months when
         compared to the same periods of 2003. The decrease is due to lower
         membership.


         Financial Services

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

<TABLE>

                   Operating Summary                  Three Months Ended June 30,          Six Months Ended June 30,
                                                    --------------------------------    --------------------------------
                       [Millions]                       2004               2003             2004              2003
         ---------------------------------------    --------------     -------------    -------------     --------------

<S>                                              <C>               <C>               <C>              <C>
         Premium income                          $            69   $             43  $           171  $             81
         Fee income                                           66                 56              133               112
         Net investment income                               229                191              494               390
         Realized investment (losses) gains                  (13)                19               17                41
                                                    --------------     -------------    -------------     --------------
         Total revenues                                      351                309              815               624

         Total benefits and
          expenses                                           309                256              692               512
         Income tax expenses                                  12                 18               40                38
                                                    --------------     -------------    -------------     --------------
         Net income                              $            30   $             35  $            83  $             74
                                                    ==============     =============    =============     ==============

         Deposits for investment-
          type contracts                         $           174   $            122  $           344  $            269
         Deposits to separate
          accounts                                           456                480              992             1,050

</TABLE>

         Net income for Financial Services decreased $5 million or 14% and
         increased $9 million or 12% in the second quarter and first six months
         of 2004 when compared to the same periods of 2003. Effective July 10,
         2003 the Company acquired CLICA and CLNY. The results of operations for
         the life insurance and annuity business areas for these subsidiaries
         have been included in the Income Statement data above for the second
         quarter and the first six months of 2004.

         In addition, the Company has entered into an Indemnity Reinsurance
         Agreement with CLAC pursuant to which the Company reinsured 80% (45%
         coinsurance and 35% coinsurance with funds withheld) of certain United
         States life, health and annuity business of CLAC's U.S. branch as of
         August 31, 2003. The life insurance and annuity reinsurance
         transactions related to this agreement have also been included in the
         Income Statement data above for the second quarter and the first six
         months of 2004.

         The impact of both of these transactions (Canada Life activity) on the
         Financial Services Division results for the second quarter and the
         first six months of 2004 is as follows:

<TABLE>


                                                    Three Months Ended               Six Months Ended
                                                              June 30                    June 30
                                                    -------------------------     ---------------------------
<S>                                              <C>                          <C>
         Premiums                                $            29              $              88
         Fee income                                            2                              4
         Net investment income                                43                            128
         Net realized gains (losses) on
            Investment                                       (11)                             6
                                                             ----                             -
         Total revenues                                       63                            226
         Policyholder benefits                                59                            170
         Operating expenses                                   13                             32
                                                              --                             --
         Total benefits and expenses                          72                            202
                                                              --
         Income (loss) from operations                        (9)                            24
         Income taxes                                         (3)                             9
                                                              ---                             -
         Net income (loss)                                    (6)                            15

</TABLE>

         The $6.0 million net loss for the second quarter of 2004 in the Canada
         Life activity is primarily due to $9.8 million of losses, net of tax,
         resulting from the change in fair value of the derivative financial
         instrument discussed in Item 3 - Qualitative and Quantitative
         Disclosures About Market Risk.

         The $15.0 million net income for the first six months of 2004 in the
         Canada Life activity includes $7.1 million of losses, net of tax,
         resulting from the change in fair value of the derivative financial
         instrument discussed in Item 3 - Qualitative and Quantitative
         Disclosures About Market Risk.

         Net income for the Financial Services division (excluding the Canada
         Life activity discussed above) has increased $1 million or 3% and
         decreased $6 million or 8% for the second quarter and first six months
         of 2004 when compared the same periods of 2003. The decrease is due to
         a decrease in investment income and realized investment gains. The net
         earned rate decreased from 6.35% in June 2003 to 6.02% in June 2004.

         Excluding Canada Life activity, total premiums including deposits to
         investment-type contracts and deposits to separate accounts decreased
         $4 million or .3% for the first six months of 2004 when compared to the
         same period of 2003. Premiums and deposits have decreased $27 million
         or 11% in the Individual Markets area where sales were lower for the
         first six months of 2004 when compared to the first six months of 2003.
         The lower sales were partially due to a $16 million sale in 2003 which
         was not repeated in 2004. The decrease in the Individual Markets area
         was offset by a $23 million increase in the Retirement Services area,
         which is primarily due to premiums on new cases which came in at the
         end of 2003.

         Retirement participant accounts including third-party administration
         and institutional accounts increased 4% in 2004 from 2,265,713 at
         December 31, 2003 to 2,354,535 at June 30, 2004.

         Fee income has increased $17 million or 15%, excluding fee income
         associated with Canada Life, for the first six months of 2004 when
         compared to the same period of 2003. Retirement products variable
         asset-based fees fluctuate with fluctuations in the participant account
         values. Account values change due to cash flow and unrealized market
         gains and losses associated with fluctuations in the U.S. equities
         market.

         Excluding investment income of $128 million associated with Canada
         Life, investment income decreased $24 million or 6% for the first six
         months of 2004 when compared to the same period of 2003. The net earned
         rate decreased from 6.35% in June 2003 to 6.02% in June 2004.

         Excluding total benefits and expenses of $202 million associated with
         Canada Life, total benefits and expenses decreased $22 million or 4%
         for the first six months of 2004 when compared to the same period of
         2003 due primarily to a decrease in the interest crediting rates on the
         in force block of business and the surrender of a large case in the
         prior year.

         GENERAL ACCOUNT INVESTMENTS

         The Company's primary investment objective is to acquire assets with
         duration and cash flow characteristics reflective 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 ensure that even under 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 range
         of possible market changes upon investments and policyholder benefits,
         the Company strives to ensure that its investment portfolio is
         appropriately structured to fulfill financial obligations to its
         policyholders.

         Fixed Maturities

         Fixed maturity investments include public and privately placed
         corporate bonds, government bonds, and mortgage-backed and asset-backed
         securities. The Company's strategy related to mortgage-backed and
         asset-backed securities is to focus on those investments with low
         prepayment risk and minimal credit risk. The Company does not invest in
         higher-risk collateralized mortgage obligations 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 enhanced 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 the rating
         agencies.

         The distribution of the fixed maturity portfolio by Standard & Poor's
         credit rating is summarized as follows:

<TABLE>

                                                                    June 30,                  December 31,
                                                                      2004                        2003
                                                              ----------------------     -----------------------

<S>                                                                       <C>                         <C>
                                 AAA                                      55.1  %                     54.3  %
                                 AA                                        8.5  %                      8.7  %
                                  A                                       14.6  %                     16.0  %
                                 BBB                                      19.1  %                     18.4  %
                 BB and below (non-investment grade)                       2.7  %                      2.6  %
                                                              ----------------- ----     ------------------ ----

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

         During the first six months of 2004, net unrealized gains on fixed
         maturities included in stockholder's equity, which is net of
         policyholder-related amounts and deferred income taxes, decreased
         stockholder's equity by $120.6 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 on direct business written and up to $2.8 million
         on business reinsured from CLAC.

         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
         judgment 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 sales representatives related
         to the production of new business, have been deferred to the extent
         deemed 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 judgment 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
         its 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
         and utilizing positive cash flows from operations. Liquidity for the
         Company has remained strong, as evidenced by significant amounts of
         short-term investments and cash that totaled $1.3 billion and $1.0
         billion as of June 30, 2004 and December 31, 2003, respectively. In
         addition, 97% of the bond portfolio carried an investment grade rating
         as of June 30, 2004 and December 31, 2003, thereby providing
         significant liquidity to the Company's overall investment portfolio.

         Funds provided by 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
         sources of the funds that may be required in such situations include
         the issuance of commercial paper and equity securities.

         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 $97.3 million and $96.4 million of commercial
         paper outstanding at June 30, 2004 and December 31, 2003, respectively.
         The commercial paper has been given a rating of A-1+ by Standard &
         Poor's and a rating of P-1 by Moody's Investors Services, each being
         the highest rating available.

         Capital resources provide protection for policyholders and 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.

         The Company entered into a line of credit agreement on March 26, 2004,
         which provides for loans up to $200 million to be used for general
         corporate purposes. The agreement expires March 26, 2005. At June 30,
         2004, the Company had notified the lender of its intent to borrow
         $164.2 million effective July 2, 2004.


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.

         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 these product's liability 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 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. 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 or forecasted to be purchased.

         As a result of the coinsurance with funds withheld element of the
         Company's reinsurance of business of CLAC's US branch, the Company has
         recorded a derivative financial instrument to account for the different
         credit risks and other characteristics of the reinsurance receivable
         and the investment assets of CLAC that underlie that receivable. This
         derivative is carried at fair value and changes in fair value are
         included in net investment income as a non-cash charge or credit.
         Therefore, the Company's operating results are exposed to volatility,
         reflecting changes in the fair value of the underlying investment
         portfolio, which is exposed to interest rate, market and credit risk.
         Losses of $9.8 million and $7.1 million, net of tax were included in
         net income for the second quarter and the first six months of 2004,
         respectively, as a result of this derivative.

Item 4.  CONTROLS AND PROCEDURES

         Based on their evaluation as of June 30, 2004, the Chief Executive
         Officer and Chief Financial Officer have concluded that the Company's
         disclosure controls and procedures are effective at the reasonable
         assurance level 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) recorded, processed,
         summarized and reported in a timely manner; and is (ii) accumulated and
         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 there were no significant changes in the Company's internal
         control over financial reporting that occurred during the Company's
         most recent fiscal quarter that have materially affected, or are
         reasonably likely to materially affect, the registrant's internal
         control over financial reporting.


<PAGE>



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
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<CAPTION>

         (a) Exhibit Number Title Page

<S>               <C>                          <C>                                               <C>
                  31.1                      Rule 13a-14(a)/15d-14(a) Certification               24

                  31.2                      Rule 13a-14(a)/15d-14(a) Certification               25

                  32                        18 U.S.C. 1350 Certification                         26

         (b)      Reports on Form 8-K

                  A report on Form 8-K, dated April 29, 2004, was filed
                  disclosing the Company's results as of March 31, 2004.
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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.

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<CAPTION>


        GWL&A FINANCIAL INC.                                                            DATE


<S>                  <C>                                                         <C>            <C>
BY:       /s/ Glen R. Derback                                                           August 16, 2004
          Glen R. Derback, Senior Vice President and Controller
          (Duly authorized officer and chief accounting officer)


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