FORM 10-Q

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549


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

   For the quarterly period ended                   June 30, 1997

                                       OR

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

   For the transaction period from                        to
   Commission file number                           333-1173

                           GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
                       (Exact name of registrant as specified in its charter)
              
            Colorado                                  84-0467907
   ---------------------------------         --------------------------------
   (State or other jurisdiction              (I.R.S. Employer Identification
    of incorporation or organization)         Number)


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

                           [303] 689-4128
         ----------------------------------------------------
         (Registrant's telephone number, including area code)


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

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

   As of June 30, 1997, 7,032,000 shares of the registrant's common stock were
   outstanding, all of which were owned by the registrant's parent company.
<PAGE>






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






                                TABLE OF CONTENTS


                                                                        Page
   Part I  FINANCIAL INFORMATION                                        ----

           Item 1    Financial Statements

                     Consolidated Statements of Income                     3

                     Consolidated Balance Sheets                           4

                     Consolidated Statements of Cash Flows                 6

                     Notes to Consolidated Financial Statements            8

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

   Part II OTHER INFORMATION

           Item 1    Legal Proceeding                                      15

           Item 6    Exhibits and Reports on Form 8-K                      15

           Signatures                                                      16
<PAGE>






   <TABLE>
   <CAPTION>
   PART I   FINANCIAL INFORMATION
   ITEM 1   FINANCIAL STATEMENTS

   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY


   CONSOLIDATED STATEMENTS OF INCOME
   (Dollars in Thousands)
   (Unaudited)

                                                       Three Months Ended      Six Months Ended
                                                            June 30,               June 30,
                                                         <C>         <C>        <C>         <C>
   <S>                                                   1997       1996        1997       1996
   REVENUES:

     Annuity contract charges and premiums           $27,563    $ 20,663    $55,758    $43,436
     Life, accident, and health premiums earned       419,669     209,576    653,050    481,244
     Net investment income                            218,956     207,565    436,972    413,107
     Net realized losses on investments               (2,216)     (24,628)   (7,160)    (22,895)


                                                      663,972     413,176    1,138,620  914,892
   BENEFITS AND EXPENSES:
     Life and other policy benefits                   128,022     125,906    251,842    254,382
     Increase (decrease) in reserves                  167,545     (1,456)    183,374    35,293
     Interest paid or credited to contractholders     131,731     136,943    270,596    285,379

     Provision for policyholders' share of earnings
       on participating business                      3,657       (1,419)    4,514      270
     Dividends to policyholders                       14,552      12,638     34,013     22,766


                                                      445,507     272,612    744,339    598,090

     Commissions                                      24,453      24,191     50,031     52,130
     Operating expenses                               106,779     78,862     202,393    160,397
     Premium taxes                                    5,078       7,467      8,869      11,459


                                                      581,817     383,132    1,005,632  822,076

   INCOME BEFORE INCOME TAXES                         82,155      30,044     132,988    92,816


   PROVISION FOR INCOME TAXES:
      Current                                         18,736      22,573     32,105     37,167
      Deferred                                        17,314      (12,391)   22,932     (13,014)


                                                      36,050      10,182     55,037     24,153
<PAGE>







   NET INCOME                                        $46,105    $ 19,862    $77,951    $68,663

   See notes to consolidated financial statements.

   </TABLE>
<PAGE>






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

   CONSOLIDATED BALANCE SHEETS
   (Dollars in Thousands)

   (Unaudited)
   <S>                                                      <C>            <C>
                                                         June 30,      December 31,
   ASSETS                                                  1997            1996


   INVESTMENTS:
     Fixed Maturities:
       Held-to-maturity, at amortized cost           $  2,056,111    $1,992,681
          (fair value $2,086,227 and $2,041,064)
       Available-for-sale, at fair value                6,339,975     6,206,478

          (amortized cost $6,280,574 and $6,151,519)
     Mortgage loans on real estate, net                 1,385,760     1,487,575
     Common stock                                       49,808        19,715
     Real estate, net                                   55,951        67,967
     Policy loans                                       2,590,483     2,523,477

     Short-term investments, available-for-sale
          (cost approximates fair value)                422,556       419,008

         Total Investments                              12,900,644    12,716,901


   Cash                                                 118,216       125,182
   Reinsurance receivable                               81,612        196,958
   Deferred policy acquisition costs                    272,418       282,780
   Investment income due and accrued                    170,494       198,441

   Other assets                                         158,282       57,244
   Premiums in course of collection                     71,582        74,693
   Deferred income taxes                                185,722       214,404
   Separate account assets                              6,832,172     5,484,631


   TOTAL ASSETS                                      $  20,791,142   $19,351,234


   See notes to consolidated financial statements.                     (Continued)

   </TABLE>
<PAGE>






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

   CONSOLIDATED BALANCE SHEETS
   (Dollars in Thousands)

   (Unaudited)
   <S>                                                               <C>           <C>
                                                                     June 30,      December 31,
   LIABILITIES AND STOCKHOLDER'S EQUITY                                 1997           1996


   POLICY BENEFIT LIABILITIES:
       Policy reserves                                             $ 10,988,788   $11,022,595
       Policy and contract claims                                    392,089       372,327
       Policyholders' funds                                          172,552       153,867
       Experience refunds                                            71,852        87,399

       Provision for policyholders' dividends                        62,339        51,279

   GENERAL LIABILITIES:
       Due to Parent Corporation                                     150,129       151,431
       Repurchase agreements                                         390,071       286,736

       Commercial paper                                              79,414        84,682
       Other liabilities                                             401,891       488,818
       Undistributed earnings on participating business
                                                                     141,949       133,255
       Separate account liabilities                                  6,832,172     5,484,631


         Total Liabilities                                           19,683,246    18,317,020

   STOCKHOLDER'S EQUITY:

       Preferred stock, $1 par value,
          50,000,000 shares authorized:
               Series A, cumulative, 1500 shares authorized,
                 liquidation value of $100,000 per share,
                 600 shares issued and outstanding                   60,000        60,000

               Series B, cumulative, 1500 shares authorized,
                 liquidation value of $100,000 per share,
                 200 shares issued and outstanding                   20,000        20,000
               Series C, cumulative, 1500 shares authorized,
                 none outstanding

               Series D, cumulative, 1500 shares authorized,
                 none outstanding
               Series E, non-cumulative, 2,000,000
                 shares authorized, liquidation value of $20.90      41,800        41,800
                 per share, issued, and outstanding
<PAGE>






       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                                    690,748       664,265
       Net unrealized gains on securities available-for-sale, net    18,868        14,951

       Retained earnings                                             269,448       226,166

         Total Stockholder's Equity                                  1,107,896     1,034,214


   TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                      $ 20,791,142   $19,351,234


   See notes to consolidated financial statements.

   </TABLE>
<PAGE>






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

   CONSOLIDATED STATEMENTS OF CASH FLOWS
   (Dollars in Thousands)

   (Unaudited)
                                                              Six Months Ended
                                                                  June 30,
   <S>                                                         <C>         <C>
                                                              1997         1996


   OPERATING ACTIVITIES:
       Net income                                         $77,951     $ 68,663
       Adjustments to reconcile net income to
         net cash provided by operating activities:

          Gain allocated to participating policyholders    7,268        270
          Amortization of investments                      3,408        11,595
          Realized losses on disposal of investments and
             write-downs of mortgage loans and real
                                                           7,160        22,895estate
          Amortization                                     23,995       17,751

          Deferred income taxes                            25,810       (13,197)
       Changes in assets and liabilities:
           Policy benefit liabilities                      265,372      121,414
           Reinsurance receivable                          115,346      (17,845)
           Accrued interest and other receivables          31,057       21,684

           Other, net                                      (162,024)    (32,722)
              Net cash provided by operating activities    395,343      200,508

   INVESTING ACTIVITIES:
       Proceeds from sales, maturities, and

           redemptions of investments:
           Fixed maturities
                Held-to-maturity
                   Maturities and redemptions              197,412      273,081
                Available-for-sale

                   Sales                                   1,181,648    1,954,015
                   Maturities and redemptions              395,902      438,132
           Mortgage loans                                  100,311      124,707
           Real estate                                     11,366       2,110
           Common stock                                    2,365        1,724

       Purchases of investments:
           Fixed maturities
                Held-to-maturity                           (257,448)    (210,604)
<PAGE>






                Available-for-sale                         (1,721,38    (2,516,33
                                                           0)           3)
           Mortages                                        (1,033)      (3,485)
           Real estate                                     (2,675)      (2,518)
           Common stock                                    (27,688)     (79)

              Net cash provided by investing activities    (121,220)    60,750
   </TABLE>                                                        (continued)
<PAGE>






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

   CONSOLIDATED STATEMENTS OF CASH FLOWS
   (Dollars in Thousands)

   (Unaudited)
                                                             Six Months Ended
                                                                 June 30,
   <S>                                                       <C>          <C>
                                                            1997         1996


   FINANCING ACTIVITIES:
      Contract withdrawals, net of deposits             $(343,184)   $(252,315)
      Due to Parent Corporation                          (1,303)      (17,495)

      Dividends paid                                     (34,669)     (26,987)
      Net commercial paper repayments                    (5,268)      (10,203)
      Net repurchase agreements borrowings               103,335      56,641
                 Net cash used in financing activities   (281,089)    (250,359)


   NET DECREASE IN CASH                                  (6,966)      10,899

   CASH, BEGINNING OF YEAR                               125,182      90,939


   CASH, END OF PERIOD                                  $118,216     $101,838









   See notes to consolidated financial statements.             (Concluded)


   </TABLE>
<PAGE>






   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
   (Amounts in Thousands, except Share Amounts)
   (Unaudited)

   1. GENERAL

      The consolidated financial statements and related notes of Great-West
      Life & Annuity Insurance Company (the Company) have been prepared in
      accordance with generally accepted accounting principles applicable to
      interim financial reporting and do not include all of the information
      and footnotes required for complete financial statements.  In the
      opinion of management, all adjustments (consisting of normal recurring
      accruals) considered necessary for a fair presentation have been
      included.  These financial statements should be read in conjunction with
      the audited consolidated financial statements and notes thereto for the
      year ended December 31, 1996.  The results of operations for the six
      months ended June 30, 1997 are not necessarily indicative of the results
      that may be expected for the year ended December 31, 1997.

   2. TRANSFER OF EMPLOYEES

      Effective January 1, 1997, all employees of the U.S. Operations of the
      Company's Parent, The Great-West Life Assurance Company, were
      transferred to the Company.  All related employee benefit plan assets
      and liabilities were also transferred from the Parent Corporation to the
      Company.  The transfer did not have a material effect on the Company's
      operating expenses as the costs associated with the employees and
      benefit plans were charged previously to the Company under the
      administrative service agreements between the Company and its Parent.
   
   3. EMPLOYEE BENEFIT PLANS
   
   The Company's defined benefit pension plan (pension plan) covers
   substantially all of its employees.  The benefits are based on years of
   service, age at retirement, and the compensation during the last seven
   years of employment.  The Company's funding policy is to contribute
   annually the maximum amount that can be deducted for federal income tax
   purposes.  Contributions are intended to provide not only for benefits
   attributed to service to date but also for those expected to be earned in
   the future.  Investments of the pension plan are managed by the Company and
   invested primarily in investment contracts and separate accounts.
   
      The Company's Parent had previously accounted for the pension plan under
      the Canadian Institute of Chartered Accountants (CICA) guidelines and
      had recorded a prepaid pension asset of $19,091.  As generally accepted
      accounting principles do not materially differ from CICA guidelines and
      the transfer is between related parties, the prepaid pension asset was
      transferred at cost.  As a result, the Company recorded the following
      effective January 1, 1997:
   
   
   <TABLE>
<PAGE>






       <S>                        <C>         <S>                              <C>
       Prepaid pension cost    $  19,091      Undistributed earnings on     $  3,608
                                                   participating business

                                              Stockholder's Equity             15,483
                               $                                            $19,09119,091
      
      </TABLE>
<PAGE>






      The Company adopted Statement of Financial Accounting Standards (SFAS)
      No. 87, "Employers Accounting for Pensions" effective January 1, 1997,
      immediately following the transfer.  The following table sets forth the
      pension plan's funded status and amounts recognized in the Company's
      statement of financial position at January 1, 1997, in accordance with
      SFAS No. 87:


   <TABLE>
 <S>                                                                                    <C>
 Actuarial present value of benefit obligations:
    Accumulated benefit obligation, including vested benefits of $74,386            $   (77,500)
    Projected benefit obligation for service rendered to date                           (95,175)
 Plan assets at fair value                                                              139,690

 Plan assets in excess of projected benefit obligation                                   44,515
 Unrecognized net obligation at January 1, 1997, being recognized over                  
    15 years                                                                            (25,422)
 Prepaid pension cost included in other assets                                      $   19,091
   </TABLE>

         The weighted-average discount rate and rate of increase in future
         compensation levels used in determining the actuarial present value
         of the projected benefit obligation were 7.5% and 5.0%, respectively.

         The Company also sponsors a post-retirement medical plan (medical
         plan) which provides health benefits to employees who have worked for
         15 years and attained age 65 while in service with the Company.  The
         medical plan is contributory and contains other cost sharing features
         which may be adjusted annually for the expected general inflation
         rate.  The Company's policy will be to fund the cost of the medical
         plan benefits in amounts determined at the discretion of management. 
         The Plan as of January 1, 1997 was not funded.  The Parent Company
         was not required under CICA guidelines to record any liability
         related to the Plan.

         Effective January 1, 1997, on the date of transfer, the Company has
         adopted SFAS No. 106, "Post-retirement Benefits Other Than Pensions." 
         The Company has elected to delay recognition of the unfunded
         accumulated post-retirement benefit obligation and has set up a
         transition obligation to amortize over 20 years.
   
   The following table sets forth the medical plan status of December 31,
   1996:
   
   
   <TABLE>
 <S>                                                                                   <C>
 Accumulated post-retirement benefit obligation:

    Retirees                                                                       $   (4,939)
    Fully eligible active plan participants                                            (1,751)
    Other active plan participants                                                     (9,470)
<PAGE>






                                                                                       (16,160)
 Unrecognized net transition obligation at January 1, 1997, being                      
    recognized over 20 years                                                           16,160
 Accrued post-retirement benefit cost                                              $   0
   </TABLE>

         For measurement purposes, a 7.5% annual rate of increase in the per
         capita cost of covered health care benefits was assumed.  The health
         care cost trend rate assumption has a significant effect on the
         amounts reported.  To illustrate, increasing the assumed health care
         cost trend rates by 1% point in each year would increase the
         accumulated post-retirement benefit obligation as of January 1, 1997,
         by $2,977.

         The weighted average discount rate used in determining the
         accumulated post-retirement benefit obligation was 7.5%.

   4.    RELATED-PARTY TRANSACTIONS

         On June 30, 1997, the Company recaptured all remaining pieces of an
         individual participating insurance block of business previously
         reinsured to the Parent Corporation on December 31, 1992.  The
         Company recorded at estimated fair value, the following at June 30,
         1997, as a result of this transaction:


   <TABLE>

                   <S>                  <C>       <S>                                     <C>
                   Assets                         Liabilities and Stockholder's Equity

                   Cash              $  160,000   Policy reserves                       $ 155,798
                   Bonds                17,975    Due to parent corporation               9,373
                   Other                60        Deferred income taxes                   2,719

                                                  Undistributed earnings on
                                                         participating business           (855)
                                                  Stockholder's equity                    11,000


                                     $  178,035                                         $ 178,035
   </TABLE>


   5.    FEDERAL INCOME TAXES
   
         Pursuant to a December 31, 1993, agreement between the Company and
         its Parent whereby the Company assumed responsibility for the Parent
         Corporation's income tax liability for fiscal years prior to 1994,
         the Company had previously recorded a contingent liability provision. 
         The Company's 1997 results of operations include a release of $47,750
         from the provision to reflect the resolution of certain tax issues
         related to the 1990 and 1991 audit years with the Internal Revenue
<PAGE>






         Service.  In the opinion of Company management, the amounts paid or
         accrued are adequate; however, it is possible that the Company's
         accrued amounts may change as a result of the completion of the IRS
         audits.

   6.    OTHER

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






         ITEM 2      MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                     CONDITION AND RESULTS OF OPERATIONS
      
      
      <TABLE>
      <CAPTION>
                                               Three Months Ended      Six Months Ended
                                                    June 30,               June 30,

                   <S>                                   <C>        <C>        <C>         <C>
                   Operating Summary (Millions)         1997        1996       1997       1996


                   Premiums and other income        $ 447       $ 230      $ 709       $525

                   Net investment income              219         208        437        413
                   Realized gains (losses) on
                      on investments                  (2)         (25)       (7)        (23)

                        Total Revenues                664         413        1,139      915

                   Total benefits and expenses        582         383        1,006      822
                   Income tax expense                 36          10         55         24

                        Net income                  $           $          $           $46207869



                                                      June 30,    Dec 31,
                   Balance Sheet (Millions)             1997        1996


                   Investment assets                $ 12,901    $ 12,717

                   Separate account assets            6,832       5,485
                   Total assets                       20,791      19,351
                   Total policyholder liabilities     11,688      11,687

                   Total shareholder's equity         1,108       1,034


      </TABLE>

   Introduction

   The following discussion addresses the financial condition of the Company
   as of June 30, 1997, compared with December 31, 1996, and its results of
   operations for the quarter and six months ended June 30, 1997, compared
   with the same periods last year.  The discussion should be read in
   conjunction with the Management's Discussion and Analysis section included
   in the Company's report on Form 10-K for the year-ended December 31, 1996
   to which the reader is directed for additional information.
<PAGE>






   Comparison of Six Months Ended June 30, 1997 and 1996

   On June 30, 1997, the Company recaptured from The Great-West Life Assurance
   Company (the "Parent Corporation") an individual participating insurance
   block of business previously ceded in December 1992.  The Company recorded
   various assets and liabilities related to the recapture as discussed in
   Footnote 4 to the quarterly financial statements included herein.  In
   addition, in the process of recording the recapture both life insurance
   premiums and increases in reserves were increased by the amount of the
   policy reserves recaptured ($156 million).

   Pursuant to a December 1993 agreement between the Company  and the Parent
   Corporation whereby the Company assumed responsibility for the Parent
   Corporation's income tax liability for fiscal years prior to 1994, the
   Company had previously recorded a contingent liability provision.  During
   the second quarter of 1997, the Company's results of operations included a
   release of $48 million from the provision to reflect the resolution of
   certain tax matters with the Internal Revenue Service related to the 1990
   and 1991 audit years.  The Company's first quarter 1996 results of
   operations include a release of $26 million from the provision to reflect
   the resolution of 1988 and 1989 tax issues.  Audits of tax years 1992 and
   1993 are currently in process.  It is the opinion of Company management
   that the amounts paid or accrued for the remaining open tax years are
   adequate, however, it is possible the the Company's accrued amounts may
   change as a result of the completion of the IRS audits.

   Net income increased 132% and 14% for the second quarter and six months of
   1997, respectively.  There are several non-recurring transactions which
   have impacted 1997.  The contingent liability release in the second quarter
   of 1997 and the first quarter of 1996 produced fluctuations in these
   periods of $23 million in 1997 and $26 million in 1996.  The $48 million
   liability release in 1997 included $15 million which was attributable to
   participating policyholders and is reflected as a liability on the balance
   sheet, thus, only $23 million of the release actually directly impacts net
   income.  In addition to the contingent liability release, the Company also
   in the normal course of business reviewed its deferred tax assets and
   liabilities and increased its liability by $21 million (of which $10
   million is attributable to participating policyholders) which resulted in a
   $11 million impact to net income during the second quarter of 1997. 
   Excluding the affect of these transactions, the growth in net income for
   the second quarter and six months of 1997 is 23% and 33% which reflects
   higher fee income from assets under management, higher margins on
   investment products, and better mortality and morbidity.  Also during the
   first quarter of 1996, the Company strengthened reserves in the individual
   annuity product line which negatively impacted net income in that period.

   Premiums and other income increased 94% and 35% for the second quarter and
   six months of 1997, respectively.  These increases reflect the insurance
   recapture and the contingent tax provision release discussed in the
   preceding two paragraphs.  Excluding these items from their related periods
   in both 1997 and 1996, the increase would have been 6% and 1% for the
   second quarter and six months of 1997 which primarily reflects higher fee
   income from assets under management.
<PAGE>






   Net investment income increased 5% and 6% for the second quarter and six
   months of 1997, respectively.  This growth in net investment income is a
   direct result of the growth in investment assets.  The actual earned rate
   for both the six months ended 1997 and 1996 was 7.18%.

   Realized investment losses decreased from a $23 million loss in 1996 to a
   $7 million loss in 1997.  Losses on sales of fixed maturities were $17
   million in 1996 versus $4 million in 1997.  Provisions for asset losses
   were $7 million in 1996 versus $4 million in 1997.  The majority of the
   fluctuation from 1996 to 1997 is reflected in the second quarter results
   for both periods.  The net earned rate on investments fluctuated in both
   years from 7.27% at March 31, 1996, to 7.18% at June 30, 1996 and from
   7.13% at March 31, 1997, to 7.18% at June 30, 1997.

   Total benefits and expenses increased 52% and 22% for the second quarter
   and six months of 1997.  Excluding the insurance recapture discussed
   previously, the growth for these periods is 11% and 3% which is composed
   primarily of increased operating expenses associated with increased systems
   and managed care development costs.  The Company continues to expand its
   managed care business by the further development of new and existing health
   maintenance organizations (HMOs).   See further discussion included in the
   Employee Benefits section of this management discussion and analysis.

   The effective income tax rate increased from 1996 due to the strengthening
   of the deferred tax liability by $21 million in quarter.

   Investment assets decreased from December 31, 1996, to June 30, 1997, by
   $184 million.  At the same time separate account assets increased $1,347
   million.  This reflects the continued trend of contractholders moving to
   variable products and away from the more traditional guaranteed products.

   Business Units Results from Operations

   The following discussion of results from operations is presented in terms
   of the major business units of the company:

   Employee Benefits

   Total revenue premium (including premium equivalents) for group life and
   health increased 1% from 1996 levels.  Sales in the Company's life and
   health business have slowed as a result of heightened price sensitivity and
   competition from managed care companies, however, new case sales in 1997
   totaled 656 compared to 473 in 1996 and termination rates have decreased
   significantly.

   The Company has continued to emphasize the development of its HMO
   subsidiaries during the second quarter of 1997 and capitalized four HMOs
   (Oregon, Ohio, Tennessee, and Massachusetts) in addition to the two
   capitalized during the first quarter of 1997 (Washington and North
   Carolina).  Both Massachusetts and Ohio received their licenses to commence
   operations during the second quarter of 1997 while the remaining HMOs are
   in the process of obtaining licensure in their respective states.
<PAGE>






   Of the total 401(k) cash flow received during the first half of 1997, 97%
   was allocated to variable funds.  Total assets under administration
   (including third-party administration) grew from $3.9 billion at December
   31, 1996 to $4.8 billion at June 30, 1997.  The number of 401(k)
   participants increased from 350,000 at December 31 1996, to more than
   400,000 at June 30, 1997.

   Financial Services

   Savings

   Assets under administration in the public non-profit (P/NP) business,
   including separate accounts increased $170 million during the first six
   months of 1997 to $7.3 billion.  New contributions to variable P/NP
   business represented 72% of the total deposits received in 1997 compared to
   60% for the first six months of 1996.  The increase was primarily the
   result of a large rollover from one case.

   The Company also provides third-party administration of policyholder
   accounts.  The number of participant accounts under administration grew
   from 109,000 at December 31, 1996 to 170,000 at June 30, 1997.   The third-
   party administration of accounts continues to be a strategic focus for this
   business unit and with the acquisition of several large institutional
   clients during 1997, the participant accounts under administration should
   continue to grow.

   Individual fixed and variable deferred annuities sold through a marketing
   agreement with Charles Schwab & Co. totaled $132 million during the first
   six months of 1997.  This product was first introduced to the market in the
   fourth quarter of 1996.

   Insurance

   Individual life insurance premiums and deposits of $199 million (excluding
   the insurance recapture and tax provision release) in the first six months
   of 1997 decreased 24% from 1996.  Premiums  are down due to legislation put
   in place in 1996 which phases out the tax deductibility of interest on
   policy loans on Corporate-Owned Life Insurance (COLI) products during 1997
   and 1998.  Although sales were discontinued in 1996, the Company continues
   to receive renewal premiums and deposits at a reduced level and the Company
   is working closely with existing COLI customers to determine the options
   available to them.  The Company does not expect the effect of these
   legislative changes to be material to the Company's operations.

   The Company began focusing on sales of its Bank-Owned Life Insurance (BOLI)
   product during the second quarter of 1996 which was not affected by the
   change in legislation discussed above.  Deposits from BOLI business through
   June 30, 1997 were $64 million.  

   General Account Investments

   The Company's investment strategies and portfolios are intended to match
   the duration of the related liabilities and provide sufficient cash flow to
   meet obligations while maintaining a competitive rate of return.  The
<PAGE>






   duration of these investments is monitored, and investment purchases and
   sales are executed with the objective of having adequate funds available to
   satisfy the Company's maturing liabilities.

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

   The distribution of the fixed maturity portfolio by credit rating is
   summarized as follows:
   
   
      <TABLE>
                   <S>                                           <C>                <C>
                                                              June 30,         December 31,
                                                                1997               1996


                   AAA                                     47.4%              45.9%
                   AA                                      7.6%               8.1%
                   A                                       23.6%              23.7%
                   BBB                                     20.4%              20.9%
                   BB and Below (non-investment grade)     1.0%               1.4%

                                                           100.0%             100.0%
      </TABLE>


   During the first half  of 1997, net unrealized gains (losses) on fixed
   maturities included in stockholders' equity, which is net of policyholder-
   related amounts and deferred income taxes, increased surplus by $4 million
   compared with a decrease of $67 million for the same period last year,
   reflecting the reduction of interest rates in 1997.

   Liquidity and Capital Resources

   Liquidity for the Company has remained strong as evidenced by significant
   amounts of short-term investments and cash in the aggregate.  Generally,
   the Company has met its operating requirements by maintaining appropriate
   levels of liquidity in its investment portfolio and through utilization of
   positive operating cash flows.

         The Company's capital resources represent funds available for long-
   term business commitments and primarily consist of retained earnings and
   proceeds from the issuance of commercial paper.  Capital resources provide
   protection for policyholders and the financial strength to support the
   underwriting of insurance risks, and allow for continued business growth. 
   The amount of capital resources that may be needed is determined by the
   Company's senior management and Board of Directors, as well as by
   regulatory requirements.  The allocation of resources to new long-term
   business commitments is designed to achieve an attractive return, tempered
<PAGE>






   by considerations of risk and the need to support the Company's existing
   business.
   
   The Company financial strength provides the capacity and flexibility to
   enable it to raise funds in the capital markets through the issuance of
   commercial paper.  The Company continues to be well capitalized, with
   sufficient borrowing capacity to meet the anticipated needs of its
   business.  The Company continues to conduct strategic and financial reviews
   of its businesses to deploy its capital resources most efficiently.
<PAGE>






   Part II     OTHER INFORMATION

               Item 1      Legal Proceedings

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

               Item 6      Exhibits and Reports on Form 8-K


                           (a)   Index to Exhibits
   

                                 Exhibit            Title              Page
                                 Number

                                   27         Financial Data            18
                                              Schedule
            
            (b)   Reports on Form 8-K
            
                  No reports on Form 8-K have been filed during the second
            quarter of 1997.
<PAGE>






                                   SIGNATURES

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


                                  GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

      
      
      DATE:August 12, 1997    BY: /s/Glen R. Derback
                                  ---------------------------------------
                                  Glen R. Derback, Vice President
                                     and Controller
                                  (Duly authorized officer and chief
                                     accounting officer)
<PAGE>