----

| þ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|-----------------------------------------------------------------------------------------|

|   | OR |
|--------|----|

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

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

| COLORADO                                                       |   | 84-0467907                              |
|----------------------------------------------------------------|--------|-----------------------------------------|
| (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)                   |
|                                                       |
| (303) 737-3000                                             |
| (Registrant’s telephone number, including area code) |

| Yes [X] | No [  ] |
|---------|-------------------|

| Yes [  ] | No [  ] |
|--------------------|-------------------|

| Large accelerated filer [  ] | Accelerated filer [  ] | Non-accelerated filer [X] | Smaller reporting company  [  ] |   |   |
|----------------------------------------|----------------------------------|---------------------------|-----------------------------------------------------|--------|--------|

| Yes [  ] | No [X ] |
|--------------------|---------|

|   |   |
|--------|--------|

----

| Table of Contents |
|-------------------|
|              |   |   |   |   |
|              |   |   |   |   |
|              |   |   |   |   |
|              |   |   |   | Page |
|              |   |   |   | Number |
|              |   |   |   |   |
| Part I            | Financial Information |   3 |
|              |   |   |   |   |
|              | Item 1 | Interim Financial Statements |   3 |
|              |   |   |   |   |
|              |   | Condensed Consolidated Balance Sheets at March 31, 2010 (Unaudited) |
|              |   |   | and December 31, 2009 |   3 |
|              |   |   |   |   |
|              |   | Condensed Consolidated Statements of Income for the Three Months |   |
|              |   |   | Ended March 31, 2010 and 2009 (Unaudited) |   5 |
|              |   |   |   |   |
|              |   | Condensed Consolidated Statements of Stockholder's Equity for the |   |
|              |   |   | Year Ended December 31, 2009 and for the Three Months Ended |   |
|              |   |   | March 31, 2010 (Unaudited) |   6 |
|              |   |   |   |   |
|              |   | Condensed Consolidated Statements of Cash Flows for the Three |   |
|              |   |   | Months Ended March 31, 2010 and 2009 (Unaudited) |   7 |
|              |   |   |   |   |
|              |   | Notes to Condensed Consolidated Financial Statements (Unaudited) |   9 |
|              |   |   |   |   |
|              | Item 2 | Management's Discussion and Analysis of Financial Condition |   |
|              |   |   | and Results of Operations | 36 |
|              |   |   |   |   |
|              | Item 3 | Quantitative and Qualitative Disclosures About Market Risk | 48 |
|              |   |   |   |   |
|              | Item 4T | Controls and Procedures | 48 |
|              |   |   |   |   |
| Part II           | Other Information | 48 |
|              |   |   |   |   |
|              | Item 1 | Legal Proceedings | 48 |
|              |   |   |   |   |
|              | Item 1A | Risk Factors | 49 |
|              |   |   |   |   |
|              | Item 6 | Exhibits | 49 |
|              |   |   |   |   |
|              |   | Signature | 49 |

----

|   | Part I - Financial Information |
|--------|--------------------------------|

| Item 1. | Interim Financial Statements |
|---------|------------------------------|

|   |   |
|--------|--------|

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY                 |   |
|-----------------------------------------------------------------|--------|
| Condensed Consolidated Balance Sheets                           |   |
| March 31, 2010 (Unaudited) and December 31, 2009                |   |
| (In Thousands, Except Share Amounts)                            |   |
|                                                            |   |
|                                                            |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |
|                                                            |   | March 31, |   |   | December 31, |   |
|                                                            |   | 2010 |   |   | 2009 |   |
| Assets                                                          |   |   |   |   |   |   |
| Investments:                                                    |   |   |   |   |   |   |
| Fixed maturities, available-for-sale, at fair value (amortized  |   |   |   |   |   |   |
| cost $14,274,661 and $14,117,799)                               |   | $ | 14,405,688 |   |   | $ | 13,917,813 |   |
| Fixed maturities, held for trading, at fair value (amortized    |   |   |   |   |   |   |   |   |
| cost $160,158 and $135,425)                                     |   |   | 166,285 |   |   |   | 140,174 |   |
| Mortgage loans on real estate (net of allowances of             |   |   |   |   |   |   |   |   |
| $14,854 and $14,854)                                            |   |   | 1,564,404 |   |   |   | 1,554,132 |   |
| Equity investments, available-for-sale, at fair value           |   |   |   |   |   |   |   |   |
| (cost $15,656 and $18,860)                                      |   |   | 21,785 |   |   |   | 25,679 |   |
| Policy loans                                                    |   |   | 3,966,388 |   |   |   | 3,971,833 |   |
| Short-term investments, available-for-sale                      |   |   |   |   |   |   |   |   |
| (cost approximates fair value)                                  |   |   | 669,173 |   |   |   | 488,480 |   |
| Limited partnership and limited liability corporation interests |   |   | 245,577 |   |   |   | 253,605 |   |
| Other investments                                               |   |   | 24,127 |   |   |   | 24,312 |   |
| Total investments                                               |   |   | 21,063,427 |   |   |   | 20,376,028 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Other assets:                                                   |   |   |   |   |   |   |   |   |
| Cash                                                            |   |   | 19,872 |   |   |   | 170,978 |   |
| Reinsurance receivable                                          |   |   | 576,089 |   |   |   | 573,963 |   |
| Deferred acquisition costs and value of business acquired       |   |   | 431,711 |   |   |   | 481,044 |   |
| Investment income due and accrued                               |   |   | 276,953 |   |   |   | 225,449 |   |
| Premiums in course of collection                                |   |   | 6,980 |   |   |   | 9,015 |   |
| Deferred income taxes                                           |   |   | 17,553 |   |   |   | 125,878 |   |
| Collateral under securities lending agreements                  |   |   | 91,004 |   |   |   | 38,296 |   |
| Due from parent and affiliates                                  |   |   | 204,753 |   |   |   | 196,697 |   |
| Goodwill                                                        |   |   | 105,255 |   |   |   | 105,255 |   |
| Other intangible assets                                         |   |   | 28,634 |   |   |   | 29,632 |   |
| Other assets                                                    |   |   | 529,578 |   |   |   | 491,471 |   |
| Assets of discontinued operations                               |   |   | 79,875 |   |   |   | 87,719 |   |
| Separate account assets                                         |   |   | 19,128,516 |   |   |   | 18,886,901 |   |
| Total assets                                                    |   | $ | 42,560,200 |   |   | $ | 41,798,326 |   |
|                                                            |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements.       |   |   |   |   |   | (Continued) |   |

----

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY           |   |
|-----------------------------------------------------------|--------|
| Condensed Consolidated Balance Sheets                     |   |
| March 31, 2010 (Unaudited) and December 31, 2009          |   |
| (In Thousands, Except Share Amounts)                      |   |
|                                                      |   |
|                                                      |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |
|                                                      |   | March 31, |   |   | December 31, |   |
|                                                      |   | 2010 |   |   | 2009 |   |
| Liabilities and stockholder's equity                      |   |   |   |   |   |   |
| Policy benefit liabilities:                               |   |   |   |   |   |   |
| Future policy benefits                                    |   | $ | 19,347,137 |   |   | $ | 18,972,560 |   |
| Policy and contract claims                                |   |   | 280,929 |   |   |   | 286,176 |   |
| Policyholders' funds                                      |   |   | 336,359 |   |   |   | 358,795 |   |
| Provision for policyholders' dividends                    |   |   | 69,003 |   |   |   | 69,494 |   |
| Undistributed earnings on participating business          |   |   | 4,444 |   |   |   | 3,580 |   |
| Total policy benefit liabilities                          |   |   | 20,037,872 |   |   |   | 19,690,605 |   |
|                                                      |   |   |   |   |   |   |   |   |
| General liabilities:                                      |   |   |   |   |   |   |   |   |
| Due to parent and affiliates                              |   |   | 544,551 |   |   |   | 537,563 |   |
| Repurchase agreements                                     |   |   | 601,332 |   |   |   | 491,338 |   |
| Commercial paper                                          |   |   | 94,826 |   |   |   | 97,613 |   |
| Payable under securities lending agreements               |   |   | 91,004 |   |   |   | 38,296 |   |
| Other liabilities                                         |   |   | 484,665 |   |   |   | 618,508 |   |
| Liabilities of discontinued operations                    |   |   | 79,812 |   |   |   | 87,719 |   |
| Separate account liabilities                              |   |   | 19,128,516 |   |   |   | 18,886,901 |   |
| Total liabilities                                         |   |   | 41,062,578 |   |   |   | 40,448,543 |   |
|                                                      |   |   |   |   |   |   |   |   |
| Commitments and contingencies (Note 13)                   |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
| Stockholder's equity:                                     |   |   |   |   |   |   |   |   |
| Preferred stock, $1 par value, 50,000,000 shares          |   |   |   |   |   |   |   |   |
| authorized; none issued and outstanding                   |   |   | - |   |   |   | - |   |
| Common stock, $1 par value, 50,000,000 shares             |   |   |   |   |   |   |   |   |
| authorized; 7,032,000 shares issued and outstanding       |   |   | 7,032 |   |   |   | 7,032 |   |
| Additional paid-in capital                                |   |   | 762,254 |   |   |   | 761,330 |   |
| Accumulated other comprehensive loss                      |   |   | 43,547 |   |   |   | (132,721 | ) |
| Retained earnings                                         |   |   | 684,789 |   |   |   | 714,142 |   |
| Total stockholder's equity                                |   |   | 1,497,622 |   |   |   | 1,349,783 |   |
| Total liabilities and stockholder's equity                |   | $ | 42,560,200 |   |   | $ | 41,798,326 |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements. |   |   |   |   |   | (Concluded) |   |

----

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY            |   |
|------------------------------------------------------------|--------|
| Condensed Consolidated Statements of Income                |   |
| Three Months Ended March 31, 2010 and 2009                 |   |
| (In Thousands)                                             |   |
| (Unaudited)                                                |   |
|                                                       |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |
|                                                       |   | Three Months Ended March 31, |   |
|                                                       |   | 2010 |   |   | 2009 |   |
| Revenues:                                                  |   |   |   |   |   |   |
| Premium income, net of premiums ceded of $5,697 and $6,626 |   | $ | 210,994 |   |   | $ | 142,101 |   |
| Fee income                                                 |   |   | 109,639 |   |   |   | 83,894 |   |
| Net investment income                                      |   |   | 279,356 |   |   |   | 281,352 |   |
| Realized investment gains (losses), net:                   |   |   |   |   |   |   |   |   |
| Total other-than-temporary losses recognized               |   |   | (53,055 | ) |   |   | (2,462 | ) |
| Less: Non-credit portion of other-than-temporary           |   |   |   |   |   |   |   |   |
| losses transferred to and recognized in                    |   |   |   |   |   |   |   |   |
| other comprehensive income                                 |   |   | 15,704 |   |   |   | - |   |
| Net other-than-temporary losses recognized in earnings     |   |   | (37,351 | ) |   |   | (2,462 | ) |
| Other realized investment gains, net                       |   |   | 17,097 |   |   |   | 4,755 |   |
| Total realized investment gains (losses), net              |   |   | (20,254 | ) |   |   | 2,293 |   |
| Total revenues                                             |   |   | 579,735 |   |   |   | 509,640 |   |
| Benefits and expenses:                                     |   |   |   |   |   |   |   |   |
| Life and other policy benefits, net of reinsurance         |   |   |   |   |   |   |   |   |
| recoveries of $6,149 and $11,366                           |   |   | 147,853 |   |   |   | 144,830 |   |
| Increase in future policy benefits                         |   |   | 101,731 |   |   |   | 23,805 |   |
| Interest paid or credited to contractholders               |   |   | 116,290 |   |   |   | 131,195 |   |
| Provision (benefit) for policyholders' share of earnings   |   |   |   |   |   |   |   |   |
| on participating business                                  |   |   | 386 |   |   |   | (66 | ) |
| Dividends to policyholders                                 |   |   | 23,784 |   |   |   | 25,596 |   |
| Total benefits                                             |   |   | 390,044 |   |   |   | 325,360 |   |
| General insurance expenses                                 |   |   | 114,976 |   |   |   | 98,750 |   |
| Amortization of deferred acquisition costs and             |   |   |   |   |   |   |   |   |
| value of business acquired                                 |   |   | 10,800 |   |   |   | 16,651 |   |
| Interest expense                                           |   |   | 9,335 |   |   |   | 9,433 |   |
| Total benefits and expenses, net                           |   |   | 525,155 |   |   |   | 450,194 |   |
| Income from operations before income taxes                 |   |   | 54,580 |   |   |   | 59,446 |   |
| Income tax expense                                         |   |   | 17,933 |   |   |   | 15,447 |   |
| Net income                                                 |   | $ | 36,647 |   |   | $ | 43,999 |   |
|                                                       |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |
|                                                       |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements.  |   |   |   |   |   |   |   |   |

----

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY                                |   |
|--------------------------------------------------------------------------------|--------|
| Condensed Consolidated Statements of Stockholder's Equity                      |   |
| Year Ended December 31, 2009 and Three Months Ended March 31, 2010 (Unaudited) |   |
| (In Thousands)                                                                 |   |
|                                                                           |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   | Accumulated Other |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   | Comprehensive Income (Loss) |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   | Additional |   |   | Unrealized |   |   | Employee |   |   |   |   |   |   |   |
|                                                                           |   | Common |   |   | Paid-in |   |   | Gains (Losses) |   |   | Benefit Plan |   |   | Retained |   |   |   |   |
|                                                                           |   | Stock |   |   | Capital |   |   | on Securities |   |   | Adjustments |   |   | Earnings |   |   | Total |   |
| Balances, January 1, 2009                                                      |   | $ | 7,032 |   |   | $ | 756,912 |   |   | $ | (691,594 | ) |   | $ | (71,079 | ) |   | $ | 607,860 |   |   | $ | 609,131 |   |
| Net income                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 122,436 |   |   |   | 122,436 |   |
| Other comprehensive income (loss), net of income taxes:                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-credit component of impaired losses on fixed                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| maturities available-for-sale                                                  |   |   |   |   |   |   |   |   |   |   | (4,367 | ) |   |   |   |   |   |   |   |   |   |   | (4,367 | ) |
| Net change in unrealized gains (losses)                                        |   |   |   |   |   |   |   |   |   |   | 614,379 |   |   |   |   |   |   |   |   |   |   |   | 614,379 |   |
| Employee benefit plan adjustment                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 28,468 |   |   |   |   |   |   |   | 28,468 |   |
| Total comprehensive income                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 638,480 |   |
| Impact of adopting ASC section 320-10-65 "Investments -                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt and Equity Securities" on available-for-sale                              |   |   |   |   |   |   |   |   |   |   | (8,528 | ) |   |   |   |   |   |   | 8,528 |   |   |   | - |   |
| securities, net of tax                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Dividends                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (24,682 | ) |   |   | (24,682 | ) |
| Capital contribution - stock-based compensation                                |   |   |   |   |   |   | 2,181 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2,181 |   |
| Income tax benefit on stock-based compensation                                 |   |   |   |   |   |   | 2,237 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 2,237 |   |
| Balances, December 31, 2009                                                    |   |   | 7,032 |   |   |   | 761,330 |   |   |   | (90,110 | ) |   |   | (42,611 | ) |   |   | 714,142 |   |   |   | 1,349,783 |   |
| Net income                                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 36,647 |   |   |   | 36,647 |   |
| Other comprehensive income (loss), net of income taxes:                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-credit component of impaired losses on fixed                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| maturities available-for-sale                                                  |   |   |   |   |   |   |   |   |   |   | (3,251 | ) |   |   |   |   |   |   |   |   |   |   | (3,251 | ) |
| Net change in unrealized gains (losses)                                        |   |   |   |   |   |   |   |   |   |   | 179,725 |   |   |   |   |   |   |   |   |   |   |   | 179,725 |   |
| Employee benefit plan adjustment                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (206 | ) |   |   |   |   |   |   | (206 | ) |
| Total comprehensive income                                                     |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 176,268 |   |
| Dividends                                                                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (66,000 | ) |   |   | (66,000 | ) |
| Capital contribution - stock-based compensation                                |   |   |   |   |   |   | 399 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 399 |   |
| Income tax benefit on stock-based compensation                                 |   |   |   |   |   |   | 525 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 525 |   |
| Balances, March 31, 2010                                                       |   | $ | 7,032 |   |   | $ | 762,254 |   |   | $ | 86,364 |   |   | $ | (42,817 | ) |   | $ | 684,789 |   |   | $ | 1,497,622 |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements.                      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY                 |
|-----------------------------------------------------------------|
| Condensed Consolidated Statements of Cash Flows                 |
| Three Months Ended March 31, 2010 and 2009                      |
| (In Thousands)                                                  |
| (Unaudited)                                                     |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   | Three Months Ended March 31, |
|                                                            |   | 2010 |   | 2009 |
| Cash flows from operating activities:                           |   |   |   |
| Net income                                                      |   | $36,647 |   | $43,999 |
| Adjustments to reconcile net income to net cash provided        |   |   |   |
| by (used in) operating activities:                              |   |   |   |
| Earnings allocated to participating policyholders               | 386 |   | (66) |
| Amortization of premiums (accretion) of discounts               |   |   |   |
| on investments, net                                             | (7,544) |   | (16,369) |
| Net realized (gains) losses on investments                      | 20,254 |   | (2,293) |
| Net purchases of trading securities                             | (24,669) |   | (215,101) |
| Interest credited to contractholders                            | 115,117 |   | 129,396 |
| Depreciation and amortization                                   | 14,975 |   | 21,368 |
| Deferral of acquisition costs                                   | (24,310) |   | (16,612) |
| Deferred income taxes                                           | 14,782 |   | 11,829 |
| Changes in assets and liabilities:                              |   |   |   |
| Policy benefit liabilities                                      | 53,650 |   | (99,590) |
| Reinsurance receivable                                          | 5,801 |   | 32,542 |
| Accrued interest and other receivables                          | (49,469) |   | (13,522) |
| Other, net                                                      | (106,282) |   | (84,471) |
| Net cash provided by (used in) operating activities             | 49,338 |   | (208,890) |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
| Cash flows from investing activities:                           |   |   |   |
| Proceeds from sales, maturities and redemptions of investments: |   |   |   |
| Fixed maturities available-for-sale                             | 1,074,989 |   | 1,014,364 |
| Mortgage loans on real estate                                   | 19,599 |   | 18,478 |
| Equity investments and other limited partnership interests      | 14,258 |   | 15,183 |
| Purchases of investments:                                       |   |   |   |
| Fixed maturities available-for-sale                             | (1,130,021) |   | (1,048,606) |
| Mortgage loans on real estate                                   | (31,568) |   | (5,600) |
| Equity investments and other limited partnership interests      | (1,815) |   | (2,971) |
| Net change in short-term investments                            | (296,626) |   | (266,870) |
| Net change in repurchase agreements                             | 109,994 |   | 147,199 |
| Other, net                                                      |   | (45,295) |   | 115,221 |
| Net cash used in investing activities                           | (286,485) |   | (13,602) |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
|                                                            |   |   |   |   |
| See notes to condensed consolidated financial statements.       |   |   | (Continued) |

----

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY                   |
|-------------------------------------------------------------------|
| Condensed Consolidated Statements of Cash Flows                   |
| Three Months Ended March 31, 2010 and 2009                        |
| (In Thousands)                                                    |
| (Unaudited)                                                       |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   | Three Months Ended March 31, |
|                                                              |   | 2010 |   | 2009 |
| Cash flows from financing activities:                             |   |   |   |
| Contract deposits                                                 | $552,816 |   | $584,176 |
| Contract withdrawals                                              | (374,603) |   | (347,610) |
| Change in due to parent and affiliates                            | (1,068) |   | (5,834) |
| Dividends paid                                                    | (66,000) |   | (24,682) |
| Net commercial paper borrowings (repayments)                      | (2,787) |   | (1,611) |
| Change in bank overdrafts                                         | (22,842) |   | (4,526) |
| Income tax benefit of stock option exercises                      | 525 |   | 437 |
| Net cash provided by financing activities                         | 86,041 |   | 200,350 |
|                                                              |   |   |   |   |
| Net decrease in cash                                              | (151,106) |   | (22,142) |
| Cash, beginning of period                                         | 170,978 |   | 28,352 |
| Cash, end of period                                               | $19,872 |   | $6,210 |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
| Supplemental disclosures of cash flow information:                |   |   |   |
| Net cash paid during the periods for:                             |   |   |   |
| Income taxes                                                      | $737 |   | $1,417 |
| Net income tax payments withheld and remitted                     |   |   |   |
| to taxing authorities                                             | 15,214 |   | 15,928 |
| Interest                                                          |   | 78 |   | 175 |
|                                                              |   |   |   |   |
| Non-cash investing and financing transactions during the periods: |   |   |   |
| Share-based compensation expense                                  | 399 |   | 673 |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
|                                                              |   |   |   |   |
| See notes to condensed consolidated financial statements.         |   |   | (Concluded) |

----

----

| 1.  Organization and Basis of Presentation |
|------------------------------------------------------|

----

----

| 3.   | Discontinued Operations |
|----------------|-------------------------|

----

| Assets                     |   | March 31, 2010 |   |   | December 31, 2009 |   |
|----------------------------|--------|----------------|--------|--------|-------------------|--------|
| Reinsurance receivable     |   | $              | 79,792 |   |              | $      | 87,719 |   |
| Other assets               |   |           | 83     |   |              |   | - |   |
| Total assets               |   | $              | 79,875 |   |              | $      | 87,719 |   |
|                       |   |           |   |   |              |   |   |   |
| Liabilities                |   |           |   |   |              |   |   |   |
| Future policy benefits     |   | $              | 50,808 |   |              | $      | 56,219 |   |
| Policy and contract claims |   |           | 29,004 |   |              |   | 31,500 |   |
| Total liabilities          |   | $              | 79,812 |   |              | $      | 87,719 |   |

|                   |   | March 31, 2010 |      |   | December 31, 2009 |   |
|------------------------|--------|----------------|-----------|--------|-------------------|--------|
| Reinsurance receivable |   | $              | 460,068   |   |              | $      | 452,510 |   |
| Future policy benefits |   |           | 2,256,363 |   |              |   | 2,293,712 |   |

|                                               |   | Three Months Ended March 31, |    |
|----------------------------------------------------|--------|------------------------------|---------|
|                                               |   | 2010                         |    |   | 2009 |   |
| Premium income, net of related party premium       |   |                         |    |   |   |   |
| ceded of $794 and $806                             |   | $                            | 31,434  |   |   | $ | 29,445 |   |
| Life and other policy benefits, net of reinsurance |   |                         |    |   |   |   |   |   |
| recoveries of $867 and $3,102                      |   |                         | 33,591  |   |   |   | 26,031 |   |
| Increase (decrease) in future policy benefits      |   |                         | (26,991 | ) |   |   | (15,935 | ) |

----

|                               |   | March 31, 2010 |       |
|------------------------------------|--------|----------------|------------|
|                               |   |           |       |   | Gross |   |   | Gross |   |   | Estimated |   |   |   |   |
|                               |   | Amortized      |       |   | unrealized |   |   | unrealized |   |   | fair value and |   |   | OTTI included |   |
| Fixed maturities:                  |   | cost           |       |   | gains |   |   | losses |   |   | carrying value |   |   | in AOCI |   |
| U.S. government direct obligations |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |
| and U.S. agencies                  |   | $              | 1,990,807  |   |   | $ | 85,603 |   |   | $ | 3,083 |   |   | $ | 2,073,327 |   |   | $ | - |   |
| Obligations of U.S. states and     |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| their subdivisions                 |   |           | 1,460,253  |   |   |   | 136,245 |   |   |   | 1,969 |   |   |   | 1,594,529 |   |   |   | - |   |
| Foreign governments                |   |           | 457        |   |   |   | - |   |   |   | 4 |   |   |   | 453 |   |   |   | - |   |
| Corporate debt securities          |   |           | 7,052,677  |   |   |   | 393,449 |   |   |   | 162,784 |   |   |   | 7,283,342 |   |   |   | 7,376 |   |
| Asset-backed securities            |   |           | 2,173,447  |   |   |   | 9,164 |   |   |   | 269,791 |   |   |   | 1,912,820 |   |   |   | 21,928 |   |
| Residential mortgage-backed        |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                         |   |           | 818,820    |   |   |   | 6,623 |   |   |   | 61,605 |   |   |   | 763,838 |   |   |   | - |   |
| Commercial mortgage-backed         |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                         |   |           | 729,867    |   |   |   | 18,424 |   |   |   | 19,426 |   |   |   | 728,865 |   |   |   | - |   |
| Collateralized debt obligations    |   |           | 48,333     |   |   |   | 375 |   |   |   | 194 |   |   |   | 48,514 |   |   |   | - |   |
| Total fixed maturities             |   | $              | 14,274,661 |   |   | $ | 649,883 |   |   | $ | 518,856 |   |   | $ | 14,405,688 |   |   | $ | 29,304 |   |
|                               |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity investments:                |   |           |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity mutual funds                |   | $              | 15,656     |   |   | $ | 6,471 |   |   | $ | 342 |   |   | $ | 21,785 |   |   | $ | - |   |
| Total equity investments           |   | $              | 15,656     |   |   | $ | 6,471 |   |   | $ | 342 |   |   | $ | 21,785 |   |   | $ | - |   |

----

|                               |   | December 31, 2009 |       |
|------------------------------------|--------|-------------------|------------|
|                               |   |              |       |   | Gross |   |   | Gross |   |   | Estimated |   |   |   |   |
|                               |   | Amortized         |       |   | unrealized |   |   | unrealized |   |   | fair value and |   |   | OTTI included |   |
| Fixed Maturities:                  |   | cost              |       |   | gains |   |   | losses |   |   | carrying value |   |   | in AOCI |   |
| U.S. government direct obligations |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |
| and U.S. agencies                  |   | $                 | 1,972,541  |   |   | $ | 77,068 |   |   | $ | 10,815 |   |   | $ | 2,038,794 |   |   | $ | - |   |
| Obligations of U.S. states and     |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| their subdivisions                 |   |              | 1,247,854  |   |   |   | 120,211 |   |   |   | 4,214 |   |   |   | 1,363,851 |   |   |   | - |   |
| Foreign governments                |   |              | 461        |   |   |   | 4 |   |   |   | - |   |   |   | 465 |   |   |   | - |   |
| Corporate debt securities          |   |              | 7,030,032  |   |   |   | 316,599 |   |   |   | 216,886 |   |   |   | 7,129,745 |   |   |   | 10,049 |   |
| Asset-backed securities            |   |              | 2,268,789  |   |   |   | 3,221 |   |   |   | 383,965 |   |   |   | 1,888,045 |   |   |   | 13,422 |   |
| Residential mortgage-backed        |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                         |   |              | 842,427    |   |   |   | 4,533 |   |   |   | 75,897 |   |   |   | 771,063 |   |   |   | - |   |
| Commercial mortgage-backed         |   |              |       |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                         |   |              | 703,864    |   |   |   | 8,058 |   |   |   | 35,792 |   |   |   | 676,130 |   |   |   | - |   |
| Collateralized debt obligations    |   |              | 51,831     |   |   |   | 332 |   |   |   | 2,443 |   |   |   | 49,720 |   |   |   | - |   |
| Total fixed maturities             |   | $                 | 14,117,799 |   |   | $ | 530,026 |   |   | $ | 730,012 |   |   | $ | 13,917,813 |   |   | $ | 23,471 |   |

| Equity investments:      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|--------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
| Consumer products        |   | $      | 4      |   |   | $      | 66     |   |   | $      | 2      |   |   | $      | 68     |   |   | $ | - |   |
| Equity mutual funds      |   |   | 15,695 |   |   |   | 5,537  |   |   |   | 450    |   |   |   | 20,782 |   |   |   | - |   |
| Airline industry         |   |   | 3,161  |   |   |   | 1,673  |   |   |   | 5      |   |   |   | 4,829  |   |   |   | - |   |
| Total equity investments |   | $      | 18,860 |   |   | $      | 7,276  |   |   | $      | 457    |   |   | $      | 25,679 |   |   | $ | - |   |

|                                        |   | March 31, 2010 |       |
|---------------------------------------------|--------|----------------|------------|
|                                        |   | Amortized cost |       |   | Estimated fair value |   |
| Maturing in one year or less                |   | $              | 626,899    |   |   | $ | 655,474 |   |
| Maturing after one year through five years  |   |           | 2,655,002  |   |   |   | 2,844,071 |   |
| Maturing after five years through ten years |   |           | 2,877,917  |   |   |   | 3,087,260 |   |
| Maturing after ten years                    |   |           | 2,502,632  |   |   |   | 2,447,447 |   |
| Mortgage-backed and asset-backed securities |   |           | 5,612,211  |   |   |   | 5,371,436 |   |
|                                        |   | $              | 14,274,661 |   |   | $ | 14,405,688 |   |

----

|                                        |   | Three Months Ended March 31, |    |
|---------------------------------------------|--------|------------------------------|---------|
|                                        |   | 2010                         |    |   | 2009 |   |
| Proceeds from sales                         |   | $                            | 776,449 |   |   | $ | 652,035 |   |
| Gross realized investment gains from sales  |   |                         | 14,347  |   |   |   | 5,696 |   |
| Gross realized investment losses from sales |   |                         | 40      |   |   |   | 723 |   |

| Derivative financial instruments - The Company makes limited use of derivative financial instruments for risk management purposes associated with certain invested assets and policy liabilities.  Derivatives are not used for speculative purposes.  While the Company purchases all derivatives as hedges to manage risk, hedge accounting has not been elected for some derivative transactions.  To manage the Company’s interest rate risk on certain floating rate debt securities, interest rate swap agreements are used to effectively convert the floating rate on the underlying asset to a fixed rate.  In order to manage the risk of a change in the fair value of certain assets, interest rate futures are utilized.  Interest rate futures are also used to manage the interest rate risks of forecasted acquisitions of fixed rate maturity investments.  Foreign currency exchange rate risk associated with bonds denominated in other than U.S. dollars is managed through the use of foreign currency exchange contracts.  Interest rate swaptions are used to manage the potential variability in future interest payments on certain insurance products due to a change in credited interest rates and the related change in cash flows due to increased surrenders.  These transactions are entered into pursuant to master agreements that provide for a single net payment to be made by one party to the other on a daily basis, periodic payment dates, or at the due date, expiration or termination of the agreement. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                      |   | March 31, 2010  |
|-------------------------------------------|--------|-----------------|
|                                      |   |            |   |   | Number of |   |   |   |   |   |
|                            |   | Notional amount |   |   | contracts |   |   | Strike/Swap rate 1 |   | Maturity |
| Interest rate swaps                       |   | $               | 136,200 |   |   |   | 11 |   |   |   | 0.20% - 0.44 | % | February 2012 - |
|                                      |   |            |   |   |   |   |   |   |   |   |   |   | February 2045 |
|                                      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency contracts                |   |            | 30,000 |   |   |   | 1 |   |   |   | N/A |   | December 2016 |
|                                      |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Futures:                                  |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Thirty year U.S. Treasury:                |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Short position                            |   |            | 82,200 |   |   |   | 822 |   |   |   | N/A |   | June 2010 |
| Ten year U.S. Treasury:                   |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Short position                            |   |            | 30,300 |   |   |   | 303 |   |   |   | N/A |   | June 2010 |
|  Long position                       |   |            | 38,700  |   |   |   | 387 |   |   |   | N/A |   | June 2010 |
| Five year U.S. Treasury:                  |   |            |   |   |   |   |   |   |   |   |   |   |   |
|   Short position                     |   |            | 19,300  |   |   |   | 193  |   |   |   | N/A  |   |   June 2010 |
|                                      |   |            |   |   |   |   |   |   |   |   |   |   |   |
|   Interest rate swaptions  |   |            | 1,140,000  |   |   |   | 60  |   |   |   | 9.90% - 10.10  |  % | November 2010 - |
|                                      |   |            |   |   |   |   |   |   |   |   |   |   |  September 2015 |

|                       |   | December 31, 2009 |
|----------------------------|--------|-------------------|
|                       |   |              |   |   | Number of |   |   |   |   |   |
|             |   | Notional amount   |   |   | contracts |   |   | Strike/Swap rate |   | Maturity |
| Interest rate swaps        |   | $                 | 156,500 |   |   |   | 13 |   |   |   | 0.19% - 0.43 | % | February 2012 - |
|                       |   |              |   |   |   |   |   |   |   |   |   |   | February 2045 |
|                       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Foreign currency contracts |   |              | 30,000 |   |   |   | 1 |   |   |   | N/A |   | December 2016 |
|                       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Futures:                   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Thirty year U.S. Treasury: |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Short position             |   |              | 83,100 |   |   |   | 831 |   |   |   | N/A |   | March 2010 |
| Ten year U.S. Treasury:    |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Short position             |   |              | 54,400 |   |   |   | 544 |   |   |   | N/A |   | March 2010 |
| Five year U.S. Treasury:   |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Short position             |   |              | 27,700 |   |   |   | 277 |   |   |   | N/A |   | March 2010 |
|                       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaptions    |   |              | 1,140,000 |   |   |   | 60 |   |   |   | 9.90% - 10.10 | % | November 2010 - |
|                       |   |              |   |   |   |   |   |   |   |   |   |   | September 2015 |

----

|                              |   | Asset derivatives |   | Liability derivatives |
|-----------------------------------|--------|-------------------|--------|-----------------------|
|                              |   | Fair value        |   | Balance sheet         |   | Fair value |   | Balance sheet |
|                              |   | March 31, 2010    |   |                  | December 31, 2009 |   | location |   | March 31, 2010 |   |   | December 31, 2009 |   | location |
| Derivatives designated as hedging |   |              |   |                  |   |   |   |   |   |   |   |   |   |   |
| instruments:                      |   |              |   |                  |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaps               |   | $                 | 13,972 |                  |   | $ | 14,690 |   | (A) |   | $ | - |   |   | $ | - |   |   |
| Foreign currency exchange         |   |              |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| contracts                         |   |              | -      |                  |   |   | - |   |   |   |   | 1,520 |   |   |   | 3,317 |   | (B) |
| Total                             |   | $                 | 13,972 |                  |   | $ | 14,690 |   |   |   | $ | 1,520 |   |   | $ | 3,317 |   |   |
|                              |   |              |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (A)  Other assets       |   |              |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (B)  Other liabilities  |   |              |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                  |   | Asset derivatives |   | Liability derivatives |
|---------------------------------------|--------|-------------------|--------|-----------------------|
|                                  |   | Fair value        |   | Balance sheet         |   | Fair value |   | Balance sheet |
|                                  |   | March 31, 2010    |   |                  | December 31, 2009 |   | location |   | March 31, 2010 |   |   | December 31, 2009 |   | location |
| Derivatives not designated as hedging |   |              |   |                  |   |   |   |   |   |   |   |   |   |   |
| instruments:                          |   |              |   |                  |   |   |   |   |   |   |   |   |   |   |
| Interest rate swaptions               |   | $                 | 3,677  |                  |   | $ | 8,460 |   | (A) |   | $ | - |   |   | $ | - |   |   |
|                                  |   | $                 | 3,677  |                  |   | $ | 8,460 |   |   |   | $ | - |   |   | $ | - |   |   |
| Total                                 |   |              |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                  |   |              |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (A)  Other assets           |   |              |   |                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

|                                 |   |                   |   |   |                                 |   |                        |   | Gain (loss) recognized in income    |
|--------------------------------------|--------|------------------------|--------|--------|--------------------------------------|--------|-----------------------------|--------|-------------------------------------|
|                                 |   | Gain (loss) recognized |   |   |                                 |   |                        |   | on derivatives (Ineffective portion |
|                                 |   | in AOCI on derivatives |   |   | Gain (loss) reclassified from        |   | and amount excluded         |
|                                 |   | (Effective portion)    |   |   | AOCI into income (Effective portion) |   | from effectiveness testing) |
|                                 |   |                   |   |   |                                 |   |                        |   |                                |   | Income |
|                                 |   | Three Months Ended     |   |   | Three Months Ended                   |   | Income statement            |   | Three Months Ended                  |   | statement |
|                                 |   | March 31, 2010         |   |   | March 31, 2010                       |   | location                    |   | March 31, 2010                      |   | location |
| Cash flow hedges:                    |   |                   |   |   |                                 |   |                        |   |                                |   |   |
| Interest rate swaps                  |   | $                      | 1,444  |   |                                 | $      | 286                         |   | (A)                                 |   | $ | (1 | ) | (A) |
| Foreign currency exchange contracts  |   |                   | 1,798  |   |                                 |   | -                           |   |                                |   |   | - |   |   |
| Interest rate futures                |   |                   | (447   | )      |                                 |   | 27                          |   | (A)                                 |   |   | - |   |   |
| Total                                |   | $                      | 2,795  |   |                                 | $      | 313                         |   |                                |   | $ | (1 | ) |   |
|                                 |   |                   |   |   |                                 |   |                        |   |                                |   |   |   |   |   |
| (A)  Net investment income |   |                   |   |   |                                 |   |                        |   |                                |   |   |   |   |   |

|                                 |   |                   |    |   |                                 |   |                        |   | Gain (loss) recognized in income    |
|--------------------------------------|--------|------------------------|---------|--------|--------------------------------------|--------|-----------------------------|--------|-------------------------------------|
|                                 |   | Gain (loss) recognized |    |   |                                 |   |                        |   | on derivatives (Ineffective portion |
|                                 |   | in AOCI on derivatives |    |   | Gain (loss) reclassified from        |   | and amount excluded         |
|                                 |   | (Effective portion)    |    |   | AOCI into income (Effective portion) |   | from effectiveness testing) |
|                                 |   |                   |    |   |                                 |   |                        |   |                                |   | Income |
|                                 |   | Three Months Ended     |    |   | Three Months Ended                   |   | Income statement            |   | Three Months Ended                  |   | statement |
|                                 |   | March 31, 2009         |    |   | March 31, 2009                       |   | location                    |   | March 31, 2009                      |   | location |
| Cash flow hedges:                    |   |                   |    |   |                                 |   |                        |   |                                |   |   |
| Interest rate swaps                  |   | $                      | (31,705 | )      |                                 | $      | 70                          |   | (A)                                 |   | $ | 19 |   | (A) |
| Foreign currency exchange contracts  |   |                   | (363    | )      |                                 |   | -                           |   |                                |   |   | - |   |   |
| Interest rate futures                |   |                   | -       |   |                                 |   | 13                          |   | (A)                                 |   |   | - |   |   |
| Total                                |   | $                      | (32,068 | )      |                                 | $      | 83                          |   |                                |   | $ | 19 |   |   |
|                                 |   |                   |    |   |                                 |   |                        |   |                                |   |   |   |   |   |
| (A)  Net investment income |   |                   |    |   |                                 |   |                        |   |                                |   |   |   |   |   |

----

|                                                   |   | Gain (loss) recognized in |   | Gain (loss) recognized in   |
|--------------------------------------------------------|--------|---------------------------|--------|-----------------------------|
|                                                   |   | net income on derivatives |   | net income on hedged assets |
|                                                   |   | Three Months Ended        |   | Income statement            |   | Three Months Ended |   | Income statement |
|                                                   |   | March 31, 2010            |   | location                    |   | March 31, 2010 |   | location |
| Fair value hedges:                                     |   |                      |   |                        |   |   |   |   |
| Interest rate futures                                  |   | $                         | (1,177 | )                           | (A) |   | $ | - |   |   |
| Interest rate futures                                  |   |                      | 272    |                        | (B) |   |   | - |   |   |
| Items hedged in interest rate futures                  |   |                      | -      |                        |   |   |   | 1,221 |   | (A) |
| Total                                                  |   | $                         | (905   | )                           |   |   | $ | 1,221 |   |   |
|                                                   |   |                      |   |                        |   |   |   |   |   |   |
| (A)  Net investment income                   |   |                      |   |                        |   |   |   |   |   |   |
| (B)  Realized investment gains (losses), net |   |                      |   |                        |   |   |   |   |   |   |

|                                                   |   | Gain (loss) recognized in |   | Gain (loss) recognized in   |
|--------------------------------------------------------|--------|---------------------------|--------|-----------------------------|
|                                                   |   | net income on derivatives |   | net income on hedged assets |
|                                                   |   | Three Months Ended        |   | Income statement            |   | Three Months Ended |   | Income statement |
|                                                   |   | March 31, 2009            |   | location                    |   | March 31, 2009 |   | location |
| Fair value hedges:                                     |   |                      |   |                        |   |   |   |   |
| Interest rate futures                                  |   | $                         | 3,233  |                        | (A) |   | $ | - |   |   |
| Interest rate futures                                  |   |                      | (1,544 | )                           | (B) |   |   | - |   |   |
| Items hedged in interest rate futures                  |   |                      | -      |                        |   |   |   | (1,649 | ) | (A) |
| Total                                                  |   | $                         | 1,689  |                        |   |   | $ | (1,649 | ) |   |
|                                                   |   |                      |   |                        |   |   |   |   |   |   |
| (A)  Net investment income                   |   |                      |   |                        |   |   |   |   |   |   |
| (B)  Realized investment gains (losses), net |   |                      |   |                        |   |   |   |   |   |   |

|                                                   |   | Gain (loss) recognized in |   | Gain (loss) recognized in   |
|--------------------------------------------------------|--------|---------------------------|--------|-----------------------------|
|                                                   |   | net income on derivatives |   | net income on hedged assets |
|                                                   |   | Three Months Ended        |   | Income statement            |   | Three Months Ended |   | Income statement |
|                                                   |   | March 31, 2010            |   | location                    |   | March 31, 2010 |   | location |
| Derivatives not designated as                          |   |                      |   |                        |   |   |   |   |
| hedging instruments                                    |   |                      |   |                        |   |   |   |   |
| Interest rate futures                                  |   | $                         | (3,559 | )                           | (A) |   | $ | - |   |   |
| Interest rate futures                                  |   |                      | 963    |                        | (B) |   |   | - |   |   |
| Interest rate swaptions                                |   |                      | (4,784 | )                           | (A) |   |   | - |   |   |
| Total                                                  |   | $                         | (7,380 | )                           |   |   | $ | - |   |   |
|                                                   |   |                      |   |                        |   |   |   |   |   |   |
| (A)  Net investment income                   |   |                      |   |                        |   |   |   |   |   |   |
| (B)  Realized investment gains (losses), net |   |                      |   |                        |   |   |   |   |   |   |

----

| Limited partnership interests and       |    |   |        |   |   |                     |   |
|-----------------------------------------|---------|--------|-------------|--------|--------|--------------------------|--------|
| limited liability corporation interests |    |   | Liabilities |   |   | Maximum exposure to loss |   |
| $                                       | 183,314 |   |        | $      | -      |                     |   | $ | 183,314 |   |

----

|                               |   | March 31, 2010          |      |
|------------------------------------|--------|-------------------------|-----------|
|                               |   | Less than twelve months |      |   | Twelve months or longer |   |   | Total |   |
|                               |   | Estimated               |      |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |
| Fixed maturities:                  |   | fair value              |      |   | loss and OTTI |   |   | fair value |   |   | loss and OTTI |   |   | fair value |   |   | loss and OTTI |   |
| U.S. government direct obligations |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and U.S. agencies                  |   | $                       | 454,679   |   |   | $ | 3,028 |   |   | $ | 18,456 |   |   | $ | 55 |   |   | $ | 473,135 |   |   | $ | 3,083 |   |
| Obligations of U.S. states         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and their subdivisions             |   |                    | 143,124   |   |   |   | 1,913 |   |   |   | 11,010 |   |   |   | 56 |   |   |   | 154,134 |   |   |   | 1,969 |   |
| Foreign governments                |   |                    | 452       |   |   |   | 4 |   |   |   | - |   |   |   | - |   |   |   | 452 |   |   |   | 4 |   |
| Corporate debt securities          |   |                    | 487,544   |   |   |   | 34,802 |   |   |   | 1,053,638 |   |   |   | 127,982 |   |   |   | 1,541,182 |   |   |   | 162,784 |   |
| Asset-backed securities            |   |                    | 100,535   |   |   |   | 23,450 |   |   |   | 1,472,858 |   |   |   | 246,341 |   |   |   | 1,573,393 |   |   |   | 269,791 |   |
| Residential mortgage-backed        |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                         |   |                    | 39,023    |   |   |   | 2,857 |   |   |   | 512,179 |   |   |   | 58,748 |   |   |   | 551,202 |   |   |   | 61,605 |   |
| Commercial mortgage-backed         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                         |   |                    | 46,957    |   |   |   | 158 |   |   |   | 103,636 |   |   |   | 19,268 |   |   |   | 150,593 |   |   |   | 19,426 |   |
| Collateralized debt obligations    |   |                    | 18        |   |   |   | 1 |   |   |   | 6,756 |   |   |   | 193 |   |   |   | 6,774 |   |   |   | 194 |   |
| Total fixed maturities             |   | $                       | 1,272,332 |   |   | $ | 66,213 |   |   | $ | 3,178,533 |   |   | $ | 452,643 |   |   | $ | 4,450,865 |   |   | $ | 518,856 |   |
|                               |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                               |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity Investments                 |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity mutual funds                |   | $                       | -         |   |   | $ | - |   |   | $ | 2,396 |   |   | $ | 342 |   |   | $ | 2,396 |   |   | $ | 342 |   |
| Total equity investments           |   | $                       | -         |   |   | $ | - |   |   | $ | 2,396 |   |   | $ | 342 |   |   | $ | 2,396 |   |   | $ | 342 |   |
|                               |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total number of securities in an   |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| unrealized loss position           |   |                    |      |   |   |   | 128 |   |   |   |   |   |   |   | 303 |   |   |   |   |   |   |   | 431 |   |

----

|                               |   | December 31, 2009       |      |
|------------------------------------|--------|-------------------------|-----------|
|                               |   | Less than twelve months |      |   | Twelve months or longer |   |   | Total |   |
|                               |   | Estimated               |      |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |
| Fixed maturities:                  |   | fair value              |      |   | loss and OTTI |   |   | fair value |   |   | loss and OTTI |   |   | fair value |   |   | loss and OTTI |   |
| U.S. government direct obligations |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and U.S. agencies                  |   | $                       | 535,595   |   |   | $ | 10,502 |   |   | $ | 19,330 |   |   | $ | 313 |   |   | $ | 554,925 |   |   | $ | 10,815 |   |
| Obligations of U.S. states         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and their subdivisions             |   |                    | 132,151   |   |   |   | 4,214 |   |   |   | 608 |   |   |   | - |   |   |   | 132,759 |   |   |   | 4,214 |   |
| Corporate debt securities          |   |                    | 673,534   |   |   |   | 74,461 |   |   |   | 1,190,858 |   |   |   | 142,425 |   |   |   | 1,864,392 |   |   |   | 216,886 |   |
| Asset-backed securities            |   |                    | 92,005    |   |   |   | 52,042 |   |   |   | 1,558,338 |   |   |   | 331,923 |   |   |   | 1,650,343 |   |   |   | 383,965 |   |
| Residential mortgage-backed        |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                         |   |                    | 53,623    |   |   |   | 3,629 |   |   |   | 550,036 |   |   |   | 72,268 |   |   |   | 603,659 |   |   |   | 75,897 |   |
| Commercial mortgage-backed         |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                         |   |                    | -         |   |   |   | - |   |   |   | 297,604 |   |   |   | 35,792 |   |   |   | 297,604 |   |   |   | 35,792 |   |
| Collateralized debt obligations    |   |                    | 1,400     |   |   |   | 173 |   |   |   | 34,678 |   |   |   | 2,270 |   |   |   | 36,078 |   |   |   | 2,443 |   |
| Total fixed maturities             |   | $                       | 1,488,308 |   |   | $ | 145,021 |   |   | $ | 3,651,452 |   |   | $ | 584,991 |   |   | $ | 5,139,760 |   |   | $ | 730,012 |   |
|                               |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity investments:                |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consumer products                  |   | $                       | -         |   |   | $ | - |   |   | $ | 2 |   |   | $ | 2 |   |   | $ | 2 |   |   | $ | 2 |   |
| Equity mutual funds                |   |                    | 2,374     |   |   |   | 450 |   |   |   | - |   |   |   | - |   |   |   | 2,374 |   |   |   | 450 |   |
| Airline industry                   |   |                    | 694       |   |   |   | 5 |   |   |   | - |   |   |   | - |   |   |   | 694 |   |   |   | 5 |   |
| Total equity investments           |   | $                       | 3,068     |   |   | $ | 455 |   |   | $ | 2 |   |   | $ | 2 |   |   | $ | 3,070 |   |   | $ | 457 |   |
|                               |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total number of securities in an   |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| unrealized loss position           |   |                    |      |   |   |   | 159 |   |   |   |   |   |   |   | 358 |   |   |   |   |   |   |   | 517 |   |

| Sector            |   |   |   | March 31, 2010 |   | December 31, 2009 |
|-------------------|--------|--------|--------|----------------|--------|-------------------|
| Finance           |   |   |   | 76%            |   | 77%               |
| Utility           |   |   |   |           | 12%    |              | 10% |
| Natural resources |   | 4%     |   | 4%             |
| Consumer          |   |   | 4%     |           | 4%     |
| Transportation    |   | 1%     |   | 2%             |
| Other             |   |   |   |           | 3%     |              | 3% |
|              |   |   |   |           |   | 100%              |   | 100% |

----

| Bifurcated credit loss balance, January 1, 2010            |   | $      | 115,325 |   |
|------------------------------------------------------------|--------|--------|---------|--------|
| Additions:                                                 |   |   |    |   |
| Initial impairments - credit loss recognized on securities |   |   |    |   |
| not previously impaired                                    |   |   | 36,524  |   |
| Bifurcated credit loss balance, March 31, 2010             |   | $      | 151,849 |   |

----

|                                     |   | March 31, 2010 |       |   | December 31, 2009 |   |
|------------------------------------------|--------|----------------|------------|--------|-------------------|--------|
|                                     |   | Carrying       |       |   | Estimated         |   |   | Carrying |   |   | Estimated |   |
| Assets                                   |   | amount         |       |   | fair value        |   |   | amount |   |   | fair value |   |
| Fixed maturities and short-term          |   |           |       |   |              |   |   |   |   |   |   |   |
| investments                              |   | $              | 15,241,146 |   |              | $      | 15,241,146 |   |   | $ | 14,546,467 |   |   | $ | 14,546,467 |   |
| Mortgage loans on real estate            |   |           | 1,564,404  |   |              |   | 1,585,642 |   |   |   | 1,554,132 |   |   |   | 1,570,217 |   |
| Equity investments                       |   |           | 21,785     |   |              |   | 21,785 |   |   |   | 25,679 |   |   |   | 25,679 |   |
| Policy loans                             |   |           | 3,966,388  |   |              |   | 3,966,388 |   |   |   | 3,971,833 |   |   |   | 3,971,833 |   |
| Other investments                        |   |           | 24,127     |   |              |   | 47,374 |   |   |   | 24,312 |   |   |   | 50,159 |   |
| Derivative instruments                   |   |           | 17,649     |   |              |   | 17,649 |   |   |   | 23,150 |   |   |   | 23,150 |   |
| Collateral under securities lending      |   |           |       |   |              |   |   |   |   |   |   |   |   |   |   |   |
| agreements                               |   |           | 91,004     |   |              |   | 91,004 |   |   |   | 38,296 |   |   |   | 38,296 |   |
| Collateral under derivative counterparty |   |           |       |   |              |   |   |   |   |   |   |   |   |
| collateral agreements                    |   |           | 3,320      |   |              |   | 3,320 |   |   |   | 4,300 |   |   |   | 4,300 |   |
| Separate account assets                  |   |           | 19,128,516 |   |              |   | 19,128,516 |   |   |   | 18,886,901 |   |   |   | 18,886,901 |   |

|                                  |   | March 31, 2010 |      |   | December 31, 2009 |   |
|---------------------------------------|--------|----------------|-----------|--------|-------------------|--------|
|                                  |   | Carrying       |      |   | Estimated         |   |   | Carrying |   |   | Estimated |   |
| Liabilities                           |   | amount         |      |   | fair value        |   |   | amount |   |   | fair value |   |
| Annuity contract reserves without     |   |           |      |   |              |   |   |   |   |   |   |   |
| life contingencies                    |   | $              | 7,336,395 |   |              | $      | 7,315,832 |   |   | $ | 7,167,733 |   |   | $ | 7,105,090 |   |
| Policyholders' funds                  |   |           | 280,929   |   |              |   | 280,929 |   |   |   | 286,175 |   |   |   | 286,175 |   |
| Repurchase agreements                 |   |           | 601,332   |   |              |   | 601,332 |   |   |   | 491,338 |   |   |   | 491,338 |   |
| Commercial paper                      |   |           | 94,826    |   |              |   | 94,826 |   |   |   | 97,613 |   |   |   | 97,613 |   |
| Payable under securities lending      |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| agreements                            |   |           | 91,004    |   |              |   | 91,004 |   |   |   | 38,296 |   |   |   | 38,296 |   |
| Payable under derivative counterparty |   |           |      |   |              |   |   |   |   |   |   |   |   |   |   |   |
| collateral agreements                 |   |           | 3,320     |   |              |   | 3,320 |   |   |   | 4,300 |   |   |   | 4,300 |   |
| Derivative instruments                |   |           | 1,520     |   |              |   | 1,520 |   |   |   | 3,317 |   |   |   | 3,317 |   |
| Notes payable                         |   |           | 541,580   |   |              |   | 541,580 |   |   |   | 532,319 |   |   |   | 532,319 |   |

----

----

----

|                                      |   | Assets and Liabilities Measured at Fair Value on a Recurring Basis |       |
|-------------------------------------------|--------|--------------------------------------------------------------------|------------|
|                                      |   | March 31, 2010                                                     |       |
|                                      |   | Quoted prices                                                      |       |   | Significant |   |   |   |   |   |   |   |
|                                      |   | in active                                                          |       |   | other |   |   | Significant |   |   |   |   |
|                                      |   | markets for                                                        |       |   | observable |   |   | unobservable |   |   |   |   |
|                                      |   | identical assets                                                   |       |   | inputs |   |   | inputs |   |   |   |   |
| Assets                                    |   | (Level 1)                                                          |       |   | (Level 2) |   |   | (Level 3) |   |   | Total |   |
| Fixed maturities, available-for-sale:     |   |                                                               |       |   |   |   |   |   |   |   |   |   |
| U.S. government direct obligations        |   |                                                               |       |   |   |   |   |   |   |   |   |   |
| and U.S. agencies                         |   | $                                                                  | -          |   |   | $ | 2,073,327 |   |   | $ | - |   |   | $ | 2,073,327 |   |
| Obligations of U.S. states and            |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| their subdivisions                        |   |                                                               | -          |   |   |   | 1,594,529 |   |   |   | - |   |   |   | 1,594,529 |   |
| Foreign governments                       |   |                                                               | -          |   |   |   | 453 |   |   |   | - |   |   |   | 453 |   |
| Corporate debt securities                 |   |                                                               | -          |   |   |   | 7,162,720 |   |   |   | 120,622 |   |   |   | 7,283,342 |   |
| Asset-backed securities                   |   |                                                               | -          |   |   |   | 1,587,647 |   |   |   | 325,173 |   |   |   | 1,912,820 |   |
| Residential mortgage-backed               |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                                |   |                                                               | -          |   |   |   | 763,838 |   |   |   | - |   |   |   | 763,838 |   |
| Commercial mortgage-backed                |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                                |   |                                                               | -          |   |   |   | 728,865 |   |   |   | - |   |   |   | 728,865 |   |
| Collateralized debt obligations           |   |                                                               | -          |   |   |   | 46,767 |   |   |   | 1,747 |   |   |   | 48,514 |   |
| Total fixed maturities available-         |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for-sale                                  |   |                                                               | -          |   |   |   | 13,958,146 |   |   |   | 447,542 |   |   |   | 14,405,688 |   |
| Fixed maturities, held for trading:       |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government direct obligations        |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and U.S. agencies                         |   |                                                               | -          |   |   |   | 67,047 |   |   |   | - |   |   |   | 67,047 |   |
| Corporate debt securities                 |   |                                                               | -          |   |   |   | 47,469 |   |   |   | - |   |   |   | 47,469 |   |
| Asset-backed securities                   |   |                                                               | -          |   |   |   | 43,423 |   |   |   | - |   |   |   | 43,423 |   |
| Commercial mortgage-backed                |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| securities                                |   |                                                               | -          |   |   |   | 8,346 |   |   |   | - |   |   |   | 8,346 |   |
| Total fixed maturities held               |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| for trading                               |   |                                                               | -          |   |   |   | 166,285 |   |   |   | - |   |   |   | 166,285 |   |
| Equity investments available-for-sale:    |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Equity mutual funds                       |   |                                                               | 21,200     |   |   |   | 585 |   |   |   | - |   |   |   | 21,785 |   |
| Total equity investments                  |   |                                                               | 21,200     |   |   |   | 585 |   |   |   | - |   |   |   | 21,785 |   |
| Short-term investments available-for-sale |   |                                                               | 17,061     |   |   |   | 652,112 |   |   |   | - |   |   |   | 669,173 |   |
| Collateral under securities lending       |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| agreements                                |   |                                                               | 90,448     |   |   |   | 556 |   |   |   | - |   |   |   | 91,004 |   |
| Other assets 1                            |   |                                                               | -          |   |   |   | 17,649 |   |   |   | - |   |   |   | 17,649 |   |
| Separate account assets 2                 |   |                                                               | 10,260,089 |   |   |   | 8,624,045 |   |   |   | 5,358 |   |   |   | 18,889,492 |   |
| Total assets                              |   | $                                                                  | 10,388,798 |   |   | $ | 23,419,378 |   |   | $ | 452,900 |   |   | $ | 34,261,076 |   |
|                                      |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                               |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities 1                       |   | $                                                                  | -          |   |   | $ | - |   |   | $ | 1,519 |   |   | $ | 1,519 |   |

| 2  Includes only separate account investments which are carried at the fair value of the underlying invested assets owned by the separate accounts. |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                                         |   | Recurring Level 3 Financial Assets and Liabilities |   |
|----------------------------------------------|--------|----------------------------------------------------|--------|
|                                         |   | Three Months Ended March 31, 2010                  |   |
|                                         |   |                                               |   |   |   |   | Fixed maturities |   |   |   |   | Fixed maturities |   |   |   |   |   |   |   |   |   |   |   |   |
|                                         |   |                                               |   | Fixed maturities |   |   | available-for- |   |   |   |   | available-for- |   |   |   |   | Fixed maturities |   |   |   |   |   |   |   |
|                                         |   |                                               |   | available-for- |   |   | sale: asset- |   |   |   |   | sale: commercial |   |   |   |   | available-for- |   |   |   |   |   |   |   |
|                                         |   |                                               |   | sale: corporate |   |   | backed |   |   |   |   | mortgage-backed |   |   |   |   | sale: collateralized |   |   | Other assets |   |   | Separate |   |
|                                         |   |                                               |   | debt securities |   |   | securities |   |   |   |   | securities |   |   |   |   | debt obligations |   |   | and liabilities 1 |   |   | accounts |   |
| Balance, January 1, 2010                     |   |                                               |   | $ | 188,936 |   |   | $ | 392,365 |   |   |   |   | $ | 58,270 |   |   |   |   | $ | 1,729 |   |   | $ | (3,317 | ) |   | $ | 9,960 |   |
| Realized and unrealized gains and losses:    |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Gains (losses) included in net income        |   |                                               |   |   | 450 |   |   |   | (7,315 | ) |   |   |   |   | - |   |   |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Gains (losses) included in other             |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| comprehensive income (loss)                  |   |                                               |   |   | 7,620 |   |   |   | 33,508 |   |   |   |   |   | - |   |   |   |   |   | 54 |   |   |   | 1,797 |   |   |   | 222 |   |
| Purchases, issuances and settlements         |   |                                               |   |   | (11,818 | ) |   |   | (86,187 | ) |   |   |   |   | - |   |   |   |   |   | (36 | ) |   |   | - |   |   |   | (2,724 | ) |
| Transfers in (out) of Level 3 2              |   |                                               |   |   | (64,566 | ) |   |   | (7,198 | ) |   |   |   |   | (58,270 | ) |   |   |   |   | - |   |   |   | - |   |   |   | (2,100 | ) |
| Balance, March 31, 2010                      |   |                                               |   | $ | 120,622 |   |   | $ | 325,173 |   |   |   |   | $ | - |   |   |   |   | $ | 1,747 |   |   | $ | (1,520 | ) |   | $ | 5,358 |   |
| Total gains (losses) for the period included |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| in net income attributable to the change     |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| in unrealized gains and losses relating      |   |                                               |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| to assets held at March 31, 2010             |   |                                               |   | $ | - |   |   | $ | - |   |   |   |   | $ | - |   |   |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |

| 2 Transfers in and out of Level 3 are from and to Level 2 and are due primarily to enhanced review and corroboration of market prices with multiple pricing vendors. |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                     |   | Three Months Ended March 31, 2010 |   |
|------------------------------------------|--------|-----------------------------------|--------|
|                                     |   | Net realized gains                |   |   | Net investment |   |
|                                     |   | (losses) on investments           |   |   | income |   |
| Realized and unrealized gains and losses |   |                              |   |   |   |   |
| included in net income for the period    |   | $                                 | (6,865 | ) |   | $ | - |   |

----

| 7.  Goodwill and Other Intangible Assets |
|----------------------------------------------------|

|                          |   | March 31, 2010 |   |
|-------------------------------|--------|----------------|--------|
|                          |   | Gross carrying |   |   | Accumulated |   |   |   |   |
|                          |   | amount         |   |   | amortization |   |   | Net book value |   |
| Customer relationships        |   | $              | 36,314 |   |   | $ | (10,705 | ) |   | $ | 25,609 |   |
| Preferred provider agreements |   |           | 7,970  |   |   |   | (4,945 | ) |   |   | 3,025 |   |
| Total                         |   | $              | 44,284 |   |   | $ | (15,650 | ) |   | $ | 28,634 |   |

|                          |   | December 31, 2009 |   |
|-------------------------------|--------|-------------------|--------|
|                          |   | Gross carrying    |   |   | Accumulated |   |   |   |   |
|                          |   | amount            |   |   | amortization |   |   | Net book value |   |
| Customer relationships        |   | $                 | 36,314 |   |   | $ | (10,039 | ) |   | $ | 26,275 |   |
| Preferred provider agreements |   |              | 7,970  |   |   |   | (4,613 | ) |   |   | 3,357 |   |
| Total                         |   | $                 | 44,284 |   |   | $ | (14,652 | ) |   | $ | 29,632 |   |

| Year Ending December 31, | Amount |   |
|--------------------------|--------|--------|
| 2010                     | $      | 3,996  |   |
| 2011                     |   | 3,793  |   |
| 2012                     |   | 3,590  |   |
| 2013                     |   | 3,410  |   |
| 2014                     |   | 3,215  |   |

----

|                                               |   | Three Months Ended March 31, 2010 |    |
|----------------------------------------------------|--------|-----------------------------------|---------|
|                                               |   | Before-tax                        |    |   | Tax (Expense) |   |   | Net-of-tax |   |
|                                               |   | Amount                            |    |   | Benefit |   |   | Amount |   |
| Unrealized holding gains (losses) arising during   |   |                              |    |   |   |   |   |   |   |
| the period on available-for-sale fixed             |   |                              |    |   |   |   |   |   |   |
| maturity investments                               |   | $                                 | 304,041 |   |   | $ | (106,415 | ) |   | $ | 197,626 |   |
| Net changes during the period related to           |   |                              |    |   |   |   |   |   |   |   |   |   |
| cash flow hedges                                   |   |                              | 2,795   |   |   |   | (978 | ) |   |   | 1,817 |   |
| Reclassification adjustment for (gains)            |   |                              |    |   |   |   |   |   |   |   |   |   |
| losses realized in net income                      |   |                              | 24,011  |   |   |   | (8,404 | ) |   |   | 15,607 |   |
| Net unrealized gains (losses)                      |   |                              | 330,847 |   |   |   | (115,797 | ) |   |   | 215,050 |   |
| Future policy benefits, deferred acquisition costs |   |                              |    |   |   |   |   |   |   |   |   |   |
| and value of business acquired adjustments         |   |                              | (59,348 | ) |   |   | 20,772 |   |   |   | (38,576 | ) |
| Net unrealized gains (losses)                      |   |                              | 271,499 |   |   |   | (95,025 | ) |   |   | 176,474 |   |
| Employee benefit plan adjustment                   |   |                              | (317    | ) |   |   | 111 |   |   |   | (206 | ) |
| Other comprehensive income (loss)                  |   | $                                 | 271,182 |   |   | $ | (94,914 | ) |   | $ | 176,268 |   |

|                                               |   | Year Ended December 31, 2009 |      |
|----------------------------------------------------|--------|------------------------------|-----------|
|                                               |   | Before-tax                   |      |   | Tax (Expense) |   |   | Net-of-tax |   |
|                                               |   | Amount                       |      |   | Benefit |   |   | Amount |   |
| Unrealized holding gains (losses) arising during   |   |                         |      |   |   |   |   |   |   |
| the year on available-for-sale fixed               |   |                         |      |   |   |   |   |   |   |
| maturity investments                               |   | $                            | 1,174,693 |   |   | $ | (411,143 | ) |   | $ | 763,550 |   |
| Net changes during the year related to             |   |                         |      |   |   |   |   |   |   |   |   |   |
| cash flow hedges                                   |   |                         | (57,218   | ) |   |   | 20,027 |   |   |   | (37,191 | ) |
| Reclassification adjustment for (gains)            |   |                         |      |   |   |   |   |   |   |   |   |   |
| losses realized in net income                      |   |                         | 71,473    |   |   |   | (25,016 | ) |   |   | 46,457 |   |
| Net unrealized gains (losses)                      |   |                         | 1,188,948 |   |   |   | (416,132 | ) |   |   | 772,816 |   |
| Future policy benefits, deferred acquisition costs |   |                         |      |   |   |   |   |   |   |   |   |   |
| and value of business acquired adjustments         |   |                         | (250,468  | ) |   |   | 87,664 |   |   |   | (162,804 | ) |
| Net unrealized gains (losses)                      |   |                         | 938,480   |   |   |   | (328,468 | ) |   |   | 610,012 |   |
| Employee benefit plan adjustment                   |   |                         | 43,797    |   |   |   | (15,329 | ) |   |   | 28,468 |   |
| Other comprehensive income (loss)                  |   | $                            | 982,277   |   |   | $ | (343,797 | ) |   | $ | 638,480 |   |

----

|                                             |   | Three Months Ended March 31, |   |
|--------------------------------------------------|--------|------------------------------|--------|
|                                             |   | 2010                         |   |   | 2009 |   |   | 2010 |   |   | 2009 |   |
|                                             |   | Defined benefit pension plan |   |   | Post-retirement medical plan |   |
| Components of periodic (benefit) cost:           |   |                         |   |   |   |   |   |   |   |   |   |   |
| Service cost                                     |   | $                            | 1,008  |   |   | $ | 961 |   |   | $ | 176 |   |   | $ | 153 |   |
| Interest cost                                    |   |                         | 5,083  |   |   |   | 4,853 |   |   |   | 191 |   |   |   | 256 |   |
| Expected return on plan assets                   |   |                         | (4,946 | ) |   |   | (3,917 | ) |   |   | - |   |   |   | - |   |
| Amortization of transition obligation            |   |                         | (378   | ) |   |   | (378 | ) |   |   | - |   |   |   | - |   |
| Amortization of unrecognized prior service cost  |   |                         | 21     |   |   |   | 22 |   |   |   | (412 | ) |   |   | (412 | ) |
| Amortization of loss (gain) from earlier periods |   |                         | 1,571  |   |   |   | 2,664 |   |   |   | (102 | ) |   |   | - |   |
| Net periodic (benefit) cost                      |   | $                            | 2,359  |   |   | $ | 4,205 |   |   | $ | (147 | ) |   | $ | (3 | ) |

|                       |   | Three Months Ended March 31, |   |
|----------------------------|--------|------------------------------|--------|
|                       |   | 2010                         |   |   | 2009 |   |
| Current                    |   | $                            | 3,151  |   |   | $ | 3,618 |   |
| Deferred                   |   |                         | 14,782 |   |   |   | 11,829 |   |
| Total income tax provision |   | $                            | 17,933 |   |   | $ | 15,447 |   |
|                       |   |                         |   |   |   |   |   |   |

|                              |                                                                     | Three Months Ended March 31, |
|-----------------------------------|--------------------------------------------------------------------------|------------------------------|
|                              |                                                                     | 2010                         |   | 2009 |
| Statutory federal income tax rate | 35.0%                                                                    |                         | 35.0% |
| Income tax effect of:             |                                                                     |                         |   |
|                              | Investment income not subject to federal tax                             | (2.0%)                       |   | (2.3%) |
|                              | Tax credits                                                              | (2.8%)                       |   | (2.2%) |
|                              | State income taxes, net of federal benefit                               | 0.7%                         |   | 0.8% |
|                              | Provision for policyholders' share of earnings on participating business | (0.1%)                       |   | - |
|                              | Other, net                                                               | 2.1%                         |   | (5.3%) |
| Effective federal income tax rate | 32.9%                                                                    |                         | 26.0% |

----

|                                                           |   |    |         |
|----------------------------------------------------------------|--------|---------|--------------|
|                                                           |   |    |         |
|                                                           |   |    |         |
| Balance, January 1, 2010                                       |   | $       | 125,878      |   |
| Decrease in deferred tax asset included in other comprehensive |   |    |         |   |
| income related to the change in unrealized (gains) losses on   |   |    |         |   |
| invested assets, net of policyholder related amounts           |   |    | (95,282      | ) |
| Increase in deferred tax asset related to income tax           |   |    |         |   |
| contingency provisions                                         |   |    | 1,739        |   |
| Decrease in deferred tax asset related to the condensed        |   |    |         |   |
| consolidated statement of income                               |   |    | (14,782      | ) |
|  Balance, March 31, 2010                                  |   |  $ | 17,553  |   |

----

|                                       |   | Three Months Ended March 31, |    |
|--------------------------------------------|--------|------------------------------|---------|
| Revenues:                                  |   | 2010                         |    |   | 2009 |   |
| Premium income                             |   | $                            | 180,560 |   |   | $ | 114,093 |   |
| Fee income                                 |   |                         | 13,827  |   |   |   | 10,660 |   |
| Net investment income                      |   |                         | 173,735 |   |   |   | 173,013 |   |
| Net realized gains (losses) on investments |   |                         | (6,866  | ) |   |   | 4,378 |   |
| Total revenues                             |   |                         | 361,256 |   |   |   | 302,144 |   |
| Benefits and expenses:                     |   |                         |    |   |   |   |   |   |
| Policyholder benefits                      |   |                         | 314,313 |   |   |   | 241,796 |   |
| Operating expenses                         |   |                         | 24,780  |   |   |   | 22,593 |   |
| Total benefits and expenses                |   |                         | 339,093 |   |   |   | 264,389 |   |
| Income before income taxes                 |   |                         | 22,163  |   |   |   | 37,755 |   |
| Income tax expense                         |   |                         | 7,627   |   |   |   | 10,303 |   |
| Net income                                 |   | $                            | 14,536  |   |   | $ | 27,452 |   |

|                                       |   | Three Months Ended March 31, |    |
|--------------------------------------------|--------|------------------------------|---------|
|                                       |   | 2010                         |    |   | 2009 |   |
| Revenues:                                  |   |                         |    |   |   |   |
| Premium income                             |   | $                            | 1,106   |   |   | $ | 817 |   |
| Fee income                                 |   |                         | 94,647  |   |   |   | 72,011 |   |
| Net investment income                      |   |                         | 94,276  |   |   |   | 97,283 |   |
| Net realized gains (losses) on investments |   |                         | (13,730 | ) |   |   | (2,233 | ) |
| Total revenues                             |   |                         | 176,299 |   |   |   | 167,878 |   |
| Benefits and expenses:                     |   |                         |    |   |   |   |   |   |
| Policyholder benefits                      |   |                         | 52,381  |   |   |   | 57,745 |   |
| Operating expenses                         |   |                         | 94,140  |   |   |   | 85,016 |   |
| Total benefits and expenses                |   |                         | 146,521 |   |   |   | 142,761 |   |
| Income before income taxes                 |   |                         | 29,778  |   |   |   | 25,117 |   |
| Income tax expense                         |   |                         | 9,357   |   |   |   | 6,396 |   |
| Net income                                 |   | $                            | 20,421  |   |   | $ | 18,721 |   |

----

|                              |   | Three Months Ended March 31, |   |
|-----------------------------------|--------|------------------------------|--------|
| Revenues:                         |   | 2010                         |   |   | 2009 |   |
| Premium income                    |   | $                            | 29,328 |   |   | $ | 27,191 |   |
| Fee income                        |   |                         | 1,165  |   |   |   | 1,223 |   |
| Net investment income             |   |                         | 11,345 |   |   |   | 11,056 |   |
| Net realized gains on investments |   |                         | 342    |   |   |   | 148 |   |
| Total revenues                    |   |                         | 42,180 |   |   |   | 39,618 |   |
| Benefits and expenses:            |   |                         |   |   |   |   |   |   |
| Policyholder benefits             |   |                         | 23,350 |   |   |   | 25,819 |   |
| Operating expenses                |   |                         | 16,191 |   |   |   | 17,225 |   |
| Total benefits and expenses       |   |                         | 39,541 |   |   |   | 43,044 |   |
| Income (loss) before income taxes |   |                         | 2,639  |   |   |   | (3,426 | ) |
| Income tax expense (benefit)      |   |                         | 949    |   |   |   | (1,252 | ) |
| Net income (loss)                 |   | $                            | 1,690  |   |   | $ | (2,174 | ) |

----

| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
|---------|---------------------------------------------------------------------------------------------|

----

|              |   | March 31, |
|-------------------|--------|-----------|
| S&P 500 Index |   | 2010      |   | 2009 |
| Index close       |   | 1,169     |   | 798 |
| Index average     |   | 1,124     |   | 808 |

----

|                                   |   | Three Months Ended March 31, |   |
|----------------------------------------|--------|------------------------------|--------|
| Income Statement Data (In millions)    |   | 2010                         |   |   | 2009 |   |
| Premium income                         |   | $                            | 211    |   |   | $ | 142 |   |
| Fee income                             |   |                         | 110    |   |   |   | 84 |   |
| Net investment income                  |   |                         | 279    |   |   |   | 281 |   |
| Net realized investment gains (losses) |   |                         | (20    | ) |   |   | 2 |   |
| Total revenues                         |   |                         | 580    |   |   |   | 509 |   |
| Policyholder benefits                  |   |                         | 390    |   |   |   | 325 |   |
| Operating expenses                     |   |                         | 135    |   |   |   | 125 |   |
| Total benefits and expenses            |   |                         | 525    |   |   |   | 450 |   |
| Income before income taxes             |   |                         | 55     |   |   |   | 59 |   |
| Income tax expense                     |   |                         | 18     |   |   |   | 15 |   |
| Net income                             |   | $                            | 37     |   |   | $ | 44 |   |

----

|                                   |   | Three Months Ended March 31, |   |
|----------------------------------------|--------|------------------------------|--------|
| Income Statement Data (In millions)    |   | 2010                         |   |   | 2009 |   |
| Premium income                         |   | $                            | 180    |   |   | $ | 114 |   |
| Fee income                             |   |                         | 14     |   |   |   | 11 |   |
| Net investment income                  |   |                         | 174    |   |   |   | 173 |   |
| Net realized investment gains (losses) |   |                         | (7     | ) |   |   | 4 |   |
| Total revenues                         |   |                         | 361    |   |   |   | 302 |   |
| Policyholder benefits                  |   |                         | 314    |   |   |   | 242 |   |
| Operating expenses                     |   |                         | 25     |   |   |   | 23 |   |
| Total benefits and expenses            |   |                         | 339    |   |   |   | 265 |   |
| Income before income taxes             |   |                         | 22     |   |   |   | 37 |   |
| Income tax expense                     |   |                         | 8      |   |   |   | 10 |   |
| Net income                             |   | $                            | 14     |   |   | $ | 27 |   |

|                 |   |   |   |   | March 31, |
|----------------------|--------|--------|--------|--------|-----------|
| (In thousands)       |   | 2010   |   | 2009   |
| Participant Accounts |   | 519    |   | 529    |

----

|                                |   | Three Months Ended March 31, |   |
|-------------------------------------|--------|------------------------------|--------|
| Income Statement Data (In millions) |   | 2010                         |   |   | 2009 |   |
| Premium income                      |   | $                            | 1      |   |   | $ | 1 |   |
| Fee income                          |   |                         | 95     |   |   |   | 72 |   |
| Net investment income               |   |                         | 94     |   |   |   | 97 |   |
| Net realized investment losses      |   |                         | (14    | ) |   |   | (2 | ) |
| Total revenues                      |   |                         | 176    |   |   |   | 168 |   |
| Policyholder benefits               |   |                         | 52     |   |   |   | 58 |   |
| Operating expenses                  |   |                         | 94     |   |   |   | 85 |   |
| Total benefits and expenses         |   |                         | 146    |   |   |   | 143 |   |
| Income before income taxes          |   |                         | 30     |   |   |   | 25 |   |
| Income tax expense                  |   |                         | 9      |   |   |   | 6 |   |
| Net income                          |   | $                            | 21     |   |   | $ | 19 |   |

|                 |   |   |   |   | March 31, |
|----------------------|--------|--------|--------|--------|-----------|
| (In thousands)       |   | 2010   |   | 2009   |
| Participant Accounts |   | 4,376  |   | 3,811  |

----

|                                        |   | March 31 |   |
|---------------------------------------------|--------|----------|--------|
| (In millions)                               |   | 2010     |   | 2009 |   |
| General Account - Fixed Options:            |   |     |   |   |   |
| Public/Non-profit                           |   | $        | 3,517  |   | $ | 3,338 |   |
|                                        | 401(k) |     |   | 3,705 |   |   | 3,458 |   |
|                                        |   |     | $      | 7,222 |   | $ | 6,796 |   |
| Separate Accounts – Variable Options: |   |     |   |   |   |   |   |
| Public/Non-profit                           |   | $        | 7,528  |   | $ | 6,452 |   |
|                                        | 401(k) |     |   | 6,508 |   |   | 4,347 |   |
|                                        |   |     | $      | 14,036 |   | $ | 10,799 |   |
| Unaffiliated Retail:                        |   |     |   |   |   |   |   |
| Investment Options and Administrative       |   |     |   |   |   |   |   |
| Services Only:                              |   |     |   |   |   |   |   |
| Public/Non-profit                           |   | $        | 51,773 |   | $ | 36,128 |   |
|                                        | 401(k) |     |   | 21,429 |   |   | 14,244 |   |
| Institutional                               |   |     | 37,973 |   |   | 23,274 |   |
|                                        |   |     | $      | 111,175 |   | $ | 73,646 |   |

----

|                                   |   | Three Months Ended March 31, |   |
|----------------------------------------|--------|------------------------------|--------|
| Income Statement Data (In millions)    |   | 2010                         |   |   | 2009 |   |
| Premium income                         |   | $                            | 30     |   |   | $ | 27 |   |
| Fee income                             |   |                         | 1      |   |   |   | 1 |   |
| Net investment income                  |   |                         | 11     |   |   |   | 11 |   |
| Net realized investment gains (losses) |   |                         | 1      |   |   |   | - |   |
| Total revenues                         |   |                         | 43     |   |   |   | 39 |   |
| Policyholder benefits                  |   |                         | 24     |   |   |   | 25 |   |
| Operating expenses                     |   |                         | 16     |   |   |   | 17 |   |
| Total benefits and expenses            |   |                         | 40     |   |   |   | 42 |   |
| Income before income taxes             |   |                         | 3      |   |   |   | (3 | ) |
| Income tax expense                     |   |                         | 1      |   |   |   | (1 | ) |
| Net income (loss)                      |   | $                            | 2      |   |   | $ | (2 | ) |

| (In millions)                                                   |   | March 31, 2010 |   |   | December 31, 2009 |   |
|-----------------------------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
| Fixed maturities, available-for-sale                            |   | $              | 14,406 |   |              |   | 68.4 | % |   | $ | 13,918 |   |   |   | 68.3 | % |
| Fixed maturities, held for trading                              |   |           | 166    |   |              |   | 0.8 | % |   |   | 140 |   |   |   | 0.7 | % |
| Mortgage loans on real estate                                   |   |           | 1,564  |   |              |   | 7.4 | % |   |   | 1,554 |   |   |   | 7.6 | % |
| Equity investments, available-for-sale                          |   |           | 22     |   |              |   | 0.1 | % |   |   | 26 |   |   |   | 0.1 | % |
| Policy loans                                                    |   |           | 3,966  |   |              |   | 18.8 | % |   |   | 3,972 |   |   |   | 19.5 | % |
| Short-term investments, available-for-sale                      |   |           | 669    |   |              |   | 3.2 | % |   |   | 488 |   |   |   | 2.4 | % |
| Limited partnership and limited liability corporation interests |   |           | 246    |   |              |   | 1.2 | % |   |   | 254 |   |   |   | 1.3 | % |
| Other investments                                               |   |           | 24     |   |              |   | 0.1 | % |   |   | 24 |   |   |   | 0.1 | % |
| Total investment assets                                         |   | $              | 21,063 |   |              |   | 100.0 | % |   | $ | 20,376 |   |   |   | 100.0 | % |

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| Credit rating                       |   | March 31, 2010 |   | December 31, 2009 1 |
|-------------------------------------|--------|----------------|--------|---------------------|
| AAA                                 |   | 40.1%          |   | 39.2%               |
| AA                                  |   | 11.9%          |   | 12.3%               |
| A                                   |   | 21.8%          |   | 21.6%               |
| BBB                                 |   | 23.4%          |   | 23.4%               |
| BB and below (Non-investment grade) |   | 2.8%           |   | 3.5%                |
| Total                               |   | 100.0%         |   | 100.0%              |

| Sector            |   | March 31, 2010 |   | December 31, 2009 |
|-------------------|--------|----------------|--------|-------------------|
| Utility           |   | 14.7%          |   | 15.0%             |
| Finance           |   | 10.4%          |   | 10.1%             |
| Consumer          |   | 8.7%           |   | 8.6%              |
| Natural resources |   | 5.6%           |   | 6.3%              |
| Transportation    |   | 2.5%           |   | 2.6%              |
| Other             |   | 8.1%           |   | 8.6%              |

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|                                         |   | Guarantor Quality Rating |   |   | Indirect Exposure |   |
|----------------------------------------------|--------|--------------------------|--------|--------|-------------------|--------|
| Guarantor (In millions)                      |   | S&P                  |   |   | Moody's           |   |   | March 31, 2010 |   |
| MBIA, Inc.                                   |   | BB+                      |   |   | B3                |   |   | $ | 272 |   |
| Assured Guaranty Corp. (formerly Financial   |   |                     |   |   |              |   |   |   |   |   |
|    Security Assurance, Inc)   |   | AAA                      |   |   | Aa3               |   |   |   | 115 |   |
| Berkshire Hathaway Assurance Corp.           |   | AAA                      |   |   | Aaa               |   |   |   | 35 |   |
| National Public Finance Guaranty Corporation |   | A                        |   |   | Baa1              |   |   |   | 108 |   |
|                                         |   |                     |   |   |              |   |   | $ | 530 |   |

----

| ·   | The Company holds approximately $5,400 million in various mortgage-backed and asset-backed collateralized mortgage securities including securities backed by U.S. agencies, of which $2,760 million are experiencing unrealized losses of approximately $354 million at March 31, 2010.  Included in this amount is $155 million which has declined and remained below amortized cost by 20% or more.  Of the $354 million in unrealized losses, approximately $28 million is related to securities on which there had been a credit rating downgrade since December 31, 2009.  Of the $28 million, $25 million are rated investment grade and $3 million are rated non-investment grade at March 31, 2010.  Future changes in the fair value of these securities will be dependent upon the continued increase in market liquidity and improvements in general market conditions. |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | The Company holds approximately $7,228 million of corporate debt securities of which $1,526 million are experiencing unrealized losses of approximately $163 million at March 31, 2010.  Included in this amount is $87 million which has declined and remained below amortized cost by 20% or more.  Approximately $6 million of the $163 million was related to securities on which there had been a credit rating downgrade since December 31, 2009.  Of the $6 million, all are rated investment grade. |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Other Investments |
|-------------------|

| Derivatives |
|-------------|

----

| ·  | Valuation of investments and other-than-temporary impairments. |
|--------------|----------------------------------------------------------------|

| ·  | Recognition of income on certain investments. |
|--------------|-----------------------------------------------|

| ·  | Valuation and accounting for derivative instruments. |
|--------------|------------------------------------------------------|

| ·  | Policy and contract benefits and claims. |
|--------------|------------------------------------------|

----

| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
|---------|------------------------------------------------------------|

| ·  | Market risk - the potential of loss arising from adverse fluctuations in interest rates and equity market    prices and the levels of their volatility. |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | Credit risk - the potential of loss arising from an obligator’s inability or unwillingness to meet its obligations to the Company. |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | Operational and corporate risk - the potential of direct or indirect loss resulting from inadequate or failed internal processes, people and systems or from other external events. |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Item 4T.  Controls and Procedures |
|---------------------------------------------|

| (a) | As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934).  Based on that evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that our current disclosure controls and procedures are effective in facilitating timely decisions regarding required disclosure of any material information relating to us that is required to be disclosed by us in the reports we file or submit under the Securities Exchange Act of 1934. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (b) | There have been no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2010 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Item 1. | Legal Proceedings |
|---------|-------------------|

----

| ·  | Competition could negatively affect the ability of the Company to maintain or increase market share or profitability; |
|--------------|-----------------------------------------------------------------------------------------------------------------------|

| ·  | A downgrade or potential downgrade in the Company’s financial strength or claims paying ratings could result in a loss of business and negatively affect results of operations and financial condition; |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | Deviations from assumptions regarding future persistency, mortality and interest rates used in calculating policy benefit liabilities for future policyholder benefits and claims could adversely affect the Company’s results of operations and financial condition; |
|--------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | The Company may be required to accelerate the amortization of deferred acquisition costs or valuation of business acquired, or recognize impairment in the value of goodwill, which could adversely affect its results of operations and financial condition; |
|--------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | If the companies that provide reinsurance default or fail to perform or the Company is unable to obtain adequate reinsurance for some of the risks underwritten, the Company could incur significant losses adversely affecting results of operations and financial condition; |
|--------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | Market fluctuations and general economic conditions may adversely affect results of operations and financial condition; |
|--------------|-------------------------------------------------------------------------------------------------------------------------|

| ·  | Changes in U.S. federal income tax law could make some of the Company’s products less attractive to consumers and increase its tax costs; |
|--------------|-------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | The Company may be subject to litigation resulting in substantial awards or settlements, and this may adversely affect its reputation and results of operations; |
|--------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | The Company’s risk management policies and procedures may leave it exposed to unidentified or unanticipated risk, which could adversely affect its business, results of operations and financial condition and |
|--------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·  | The Company may experience difficulty in marketing and distributing products through its current and future distribution channels. |
|--------------|------------------------------------------------------------------------------------------------------------------------------------|

| Item 6. | Exhibits |
|---------|----------|

|    31.1 |   |                Rule 13a-14(a)/15-d14(a) Certification |   | 50 |
|------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------|--------|----|
|    31.2 |   |                Rule 13a-14(a)/15-d14(a) Certification |   | 51 |
| 32                     |   |                18 U.S.C. 1350 Certification           |   | 52 |

| By:    | /s/Glen R. Derback                                     | Date:  | May 10 , 2010 |
|--------|--------------------------------------------------------|--------|-------------------------|
|   | Glen R. Derback, Senior Vice President and Controller  |   |                    |
|   | (Duly authorized officer and chief accounting officer) |   |                    |