FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


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

For the quarterly period ended                          March 31, 1998
        ==============================================================

                                       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
          ============================================================

                FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
    ========================================================================
             (Exact name of registrant as specified in its charter)

                               New York 93-1225432
==============================     ============================================
(State or other jurisdiction of       (I.R.S. Employer Identification Number)
incorporation or organization)

            125 Wolf Road, Albany, New York 12205
================================================================
           (Address of principal executive offices)
                          (Zip Code)

                        [518] 437-1816
================================================================
     (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
         =========         =========

As of March  31,  1998,  2,500  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.


<PAGE>


                                TABLE OF CONTENTS


<TABLE>

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

              Item 1   Financial Statements

                       Statement of Income                                                 3

                       Balance Sheets                                                      4

                       Statement of Cash Flows                                             5

                       Notes to Financial Statements                                       6

              Item 2   Management's Discussion and Analysis of Financial                   7
                       Condition and Results of Operations

Part II       OTHER INFORMATION

              Item 1   Legal Proceeding                                                    9

              Item 6   Exhibits and Reports on Form 8-K                                    9

              Signatures                                                                  10


</TABLE>















                                            - 2 -


<PAGE>

<TABLE>

PART I   FINANCIAL INFORMATION
ITEM 1   FINANCIAL STATEMENTS
-----------------------------------------------------------------------------------------------

FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

STATEMENT OF INCOME
(Dollars in Thousands)
-----------------------------------------------------------------------------------------------
(Unaudited)                                                                       Three Months
                                                                                     Ended
                                                                                   March 31,
                                                                                      1998
                                                                                  -------------
REVENUES:
<S>                                                                            <C>           
  Premium and fee income                                                       $           24
  Net investment income                                                                    85
                                                                                  -------------

                                                                                          109
                                                                                  -------------
BENEFITS AND EXPENSES:
  Interest paid or credited to contractholders                                              1
  Commissions                                                                              12
  Operating expenses                                                                       75
  Premium taxes                                                                             3
                                                                                  -------------

                                                                                           91
                                                                                  -------------

INCOME BEFORE INCOME TAXES                                                                 18

PROVISION FOR INCOME TAXES:
   Current                                                                                 27
   Deferred                                                                               (19)
                                                                                  -------------

                                                                                            8
                                                                                  -------------

NET INCOME                                                                     $           10
                                                                                  =============


</TABLE>















See notes to financial statements.

                                             -3-


<PAGE>

<TABLE>

FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

BALANCE SHEETS
(Dollars in Thousands)
-----------------------------------------------------------------------------------------------

                                                                 March 31,       December 31,
ASSETS                                                              1998             1997
------
                                                               ---------------   --------------
                                                                (Unaudited)
INVESTMENTS:
<S>                                                          <C>              <C>            
    Fixed maturities, available-for-sale, at fair value      $        4,999   $         4,995
       (amortized cost $4,994 and $4,987)
    Short-term investments, available-for-sale                          391               386
       (cost approximates fair value)
                                                               ---------------   --------------

      Total Investments                                               5,390             5,381

Cash                                                                  1,190             1,648
Investment income due and accrued                                        90                24
Other assets                                                             11                 6
Deferred income taxes                                                    69                50
Separate account assets                                              13,650             9,045
                                                               ---------------   --------------

TOTAL ASSETS                                                 $       20,400   $        16,154
                                                               ===============   ==============


LIABILITIES AND STOCKHOLDER'S EQUITY

POLICY BENEFIT LIABILITIES:
    Policy reserves                                         $            85   $            84

GENERAL LIABILITIES:
    Due to Parent Corporation                                            26               155
    Other liabilities                                                    93               332
    Separate account liabilities                                     13,650             9,045
                                                               ---------------   --------------

      Total Liabilities                                              13,854             9,616
                                                               ---------------   --------------

STOCKHOLDER'S EQUITY:
    Common stock, $1,000 par value,
       2,500 shares authorized, issued and outstanding                2,500             2,500
    Additional paid-in capital                                        4,000             4,000
    Accumulated other comprehensive income                                3                 5
    Retained earnings                                                    43                33
                                                               ---------------   --------------

      Total Stockholder's Equity                                      6,546             6,538
                                                               ---------------   --------------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                  $        20,400   $        16,154
                                                               ===============   ==============


</TABLE>

See notes to financial statements.

                                            - 4 -


<PAGE>


FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
<TABLE>

STATEMENT OF CASH FLOWS
(Dollars in Thousands)
-----------------------------------------------------------------------------------------------
(Unaudited)                                                                       Three Months
                                                                                     Ended
                                                                                   March 31,
                                                                                  -------------
                                                                                      1998
                                                                                  -------------

OPERATING ACTIVITIES:
<S>                                                                            <C>          
    Net income                                                                 $          10
    Adjustments to reconcile net income to
      net cash provided by operating activities:
       Amortization of investments                                                        (7)
       Deferred income taxes                                                             (19)
    Changes in assets and liabilities:
        Accrued interest and other receivables                                           (66)
        Other, net                                                                      (242)
                                                                                  -------------
                 Net cash used in operating activities                                  (324)
                                                                                  -------------

INVESTING ACTIVITIES:
    Purchases of fixed maturity investments:
             Available-for-sale                                                           (5)
                                                                                  -------------

                 Net cash used in investing activities                                    (5)
                                                                                  -------------


FINANCING ACTIVITIES:
   Due to Parent Corporation                                                             (129)
                                                                                  -------------

              Net cash used in financing activities                                      (129)
                                                                                  -------------

NET DECREASE IN CASH                                                                     (458)

CASH, BEGINNING OF YEAR                                                                 1,648
                                                                                  -------------

CASH, END OF PERIOD                                                            $        1,190
                                                                                  =============

</TABLE>












See notes to financial statements.

                                            - 5 -


<PAGE>


FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

NOTES TO FINANCIAL STATEMENTS
------------------------------------------
(Unaudited)

1.      GENERAL

        First  Great-West  Life & Annuity  Insurance  Company (the Company) is a
        wholly-owned  subsidiary of Great-West Life & Annuity  Insurance Company
        (the Parent  Corporation).  The Company was incorporated as a stock life
        insurance  company in the State of New York and was capitalized on April
        4, 1997.  The Company was licensed as an insurance  company in the State
        of New York on May 28, 1997.

        The financial  statements and related notes of First  Great-West  Life &
        Annuity Insurance Company (the Company) have been prepared in accordance
        with  generally  accepted  accounting  principles  applicable to interim
        financial  reporting  and do not  include  all  of the  information  and
        footnotes required for complete financial statements.  In the opinion of
        management,  all adjustments  (consisting of normal recurring  accruals)
        considered  necessary for a fair presentation have been included.  These
        financial  statements  should be read in  conjunction  with the  audited
        financial  statements  and notes thereto for the year ended December 31,
        1997.   The  results  of  operations  for  the  quarter  ended  are  not
        necessarily  indicative of the results that may be expected for the year
        ended December 31, 1998.

2.          NEW ACCOUNTING PRONOUNCEMENTS

        Effective  January 1, 1998, the Company  adopted  Statement of Financial
        Accounting Standards (SFAS) No. 130, "Reporting  Comprehensive  Income".
        This  Statement  establishes  new rules for  reporting  and  display  of
        comprehensive  income and its components;  however, the adoption of this
        Statement  had no impact on the  Company's  net income or  shareholders'
        equity.  This  Statement  requires  unrealized  gains or  losses  on the
        Company's  available-for-sale  securities,  which prior to adoption were
        reported  separately in  shareholders'  equity,  to be included in other
        comprehensive   income.   Prior  year  financial  statements  have  been
        reclassified to conform to the requirements of SFAS No. 130.

        During the first quarter of 1998 total other comprehensive loss amounted
        to $2 thousand.























                                            - 6 -


<PAGE>

<TABLE>

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

                                                                           Three Months
                                                                              Ended
                                                                            March 31,
                 Operating Summary (Thousands)                                 1998
                                                                           -------------

<S>                                                                     <C>         
                 Premiums and fee income                                $         24
                 Net investment income                                            85
                                                                           -------------
                      Total Revenues                                             109

                 Total benefits and expenses                                      91
                 Income tax expense                                                8
                                                                           =============
                      Net income                                        $         10
                                                                           =============


                                                           March 31,       December 31,
                 Balance Sheet (Thousands)                   1998              1997
                                                         --------------    -------------

                 Investment assets                    $     5,390       $      5,381
                 Separate account assets                   13,650              9,045
                 Total assets                              20,400             16,154
                 Total policyholder liabilities            13,854              9,616
                 Total shareholder's equity                 6,546              6,538

</TABLE>

        The  Company's  operations  during the three months ended March 31, 1998
        have been focused on preliminary marketing  activities.  Sales have been
        limited to  individual  annuity  products - both fixed income  annuities
        with a market value  adjustment  and variable  annuities  sold through a
        marketing agreement with Charles Schwab & Co.

        There were no sales of the fixed income  annuities  without  significant
        life  contingencies  during the three months  ended March 31, 1998.  The
        contributions  received  for  the  variable  annuities  included  in the
        Separate  Account are over $3.5 million.  The net income of $10 thousand
        reflects fees associated with variable  business,  investment  income on
        surplus less the operating expenses associated with the new operations.

        In the months  ahead,  the Company will continue to focus its efforts on
        variable sales while continuing to develop other products for submission
        to the New York Department of Insurance for approval.

        General Account  Investments - The Company's  investment  strategies and
        portfolios are intended to match the duration of the related liabilities
        and provide sufficient cash flow to meet obligations while maintaining a
        competitive  rate of  return.  The  duration  of  these  investments  is
        monitored,  and  investment  purchases  and sales are executed  with the
        objective of having  adequate  funds  available to satisfy the Company's
        maturing liabilities.

        It is management's  philosophy that the portfolio of fixed maturities be
        of high quality.  The fixed  maturities  in the Company's  portfolio are
        generally  rated by  external  rating  agencies,  and if not  externally
        rated,  are rated by the  Company on a basis  believed  to be similar to
        that used by rating  agencies.  The credit rating on the fixed  maturity
        portfolio at March 31, 1998 is AAA.

                                            - 7 -


<PAGE>


        During the three months ended March 31, 1998,  net  unrealized  gains on
        fixed  maturities  included  in  stockholders'  equity,  which is net of
        policyholder-related   amounts  and  deferred  income  taxes,  decreased
        surplus by $2 thousand  resulting  in  accumulated  other  comprehensive
        income of $3 thousand.

        Liquidity and Capital Resources - Liquidity for the Company has remained
        strong as  evidenced  by  significant  amounts of cash.  Generally,  the
        Company has met its operating  requirements  by maintaining  appropriate
        levels of liquidity in its investment portfolio.

        The Company's capital resources  represent funds available for long-term
        business  commitments  and primarily  consist of  stockholder's  equity.
        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.






































                                            - 8 -


<PAGE>


Part II OTHER INFORMATION

        Item 1 Legal Proceedings

               There are no  material  pending  legal  proceedings  to which the
               Company  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

                        Exhibit            Title                    Page
                        Number
                        --------------     ---------------------    -----------

                        27                 Financial Data           11
                                    Schedule

               (b)    Reports on Form 8-K

                      No reports  on Form 8-K have been  filed  during the first
quarter of 1998.


































                                            - 9 -


<PAGE>


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.


                             FIRST GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY



DATE:   ________________  BY: /s/______________________________________________
                                 Glen R. Derback, Vice President and Controller
                                (Duly authorized officer and chief accounting
                                 officer)