UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q


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


<S>                                                       <C>                                        <C>
For the quarterly period ended                                        September 30, 2005
                                          ----------------------------------------------------------------------------

                                       OR

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

For the transition 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 of incorporation or organization)           (I.R.S. Employer Identification Number)


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

                                                                        (303) 737-3000
                                          ----------------------------------------------------------------------------
                                                     (Registrant's telephone number, including area code)
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Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

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

Indicate by check mark whether the registrant is an accelerated filer as defined
in Rule 12(b)-2 of the Exchange Act.

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

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

As of November 1, 2005, 7,032,000 shares of the registrant's common stock were
outstanding, all of which were owned by the registrant's parent company.

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



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                                TABLE OF CONTENTS


Part I       FINANCIAL INFORMATION                                                                            Page
                                                                                                           -----------

<S>               <C>                                                                                          <C>
             Item 1   Financial Statements                                                                     3

                      Consolidated Statements of Income (Unaudited)                                            3

                      Consolidated Balance Sheets (Unaudited)                                                  4

                      Consolidated Statements of Cash Flows (Unaudited)                                        6

                      Consolidated Statement of Stockholder's Equity (Unaudited)                               8

                      Notes to Consolidated Financial Statements (Unaudited)                                   9

             Item 2   Management's Discussion and Analysis of Financial Condition and Results
                      of Operations                                                                            15

             Item 3   Quantitative and Qualitative Disclosures About Market Risk                               25

             Item 4   Controls and Procedures                                                                  26

Part II      OTHER INFORMATION                                                                                 26

             Item 1   Legal Proceedings                                                                        26

             Item 6   Exhibits                                                                                 26

             Signature                                                                                         26


</TABLE>



PART I     FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

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                   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
                        CONSOLIDATED STATEMENTS OF INCOME
                                 (In Thousands)
                                   (Unaudited)


                                                     Three Months Ended                   Nine Months Ended
                                                       September 30,                        September 30,
                                              ---------------------------------    ---------------------------------
REVENUES:                                          2005              2004               2005               2004
                                              ---------------   ---------------    ---------------    ---------------
<S>                                               <C>               <C>              <C>                <C>
Premium income:
  Related party (net of premiums
   ceded totaling $1,077, $704
   $3,656 and $258,908)                    $       40,534     $      32,294     $      144,454     $      (86,085)
  Other (net of premiums ceded
   totaling $65,447, $124,963,                    232,339           148,266            678,585            544,452
   $200,904 and $307,500)
Fee income                                        240,411           232,985            715,703            674,164
Net investment income                             253,653           277,152            802,757            796,613
Net realized gains on investments                     748            14,459             60,570             43,769
                                              ---------------   ---------------    ---------------    ---------------
    Total revenue                                 767,685           705,156          2,402,069          1,972,913
                                              ---------------   ---------------    ---------------    ---------------
BENEFITS AND EXPENSES:
Life and other policy benefits
  (net of reinsurance recoveries
  totaling $67,959, $99,357,
  $194,036 and $292,272)                          223,935           174,152            761,715            646,304
Increase (decrease) in reserves:
  Related party                                   (93,634)         (211,231)          (243,116)          (427,797)
  Other                                           139,988           224,457            300,276            177,750
Interest paid or credited to
  contractholders                                 116,593           109,423            354,300            364,232
Provision for policyholders' share of
  earnings on participating business                  909             4,119              2,655             10,670
Dividends to policyholders                         23,050            21,938             80,721             79,414
                                              ---------------   ---------------    ---------------    ---------------
    Total benefits                                410,841           322,858          1,256,551            850,573
Commissions                                        45,752            46,536            138,495            145,486
Operating expenses                                187,352           194,528            559,566            581,330
Premium taxes                                       5,865             9,654             26,257             24,612
                                              ---------------   ---------------    ---------------    ---------------
    Total benefits and expenses                   649,810           573,576          1,980,869          1,602,001
                                              ---------------   ---------------    ---------------    ---------------
INCOME BEFORE INCOME TAXES                        117,875           131,580            421,200            370,912
PROVISION FOR INCOME TAXES:
   Current                                         50,377            29,085            131,460            121,883
   Deferred                                       (13,373)           12,421               (333)            (1,361)
                                              ---------------   ---------------    ---------------    ---------------
                                                   37,004            41,506            131,127            120,522
                                              ---------------   ---------------    ---------------    ---------------
NET INCOME                                 $       80,871     $      90,074     $      290,073     $      250,390
                                              ===============   ===============    ===============    ===============


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See notes to consolidated financial statements.


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                   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
                           CONSOLIDATED BALANCE SHEETS
                      (In Thousands, Except Share Amounts)
                                   (Unaudited)





                                                                           September 30,            December 31,
ASSETS                                                                         2005                     2004
------
                                                                        --------------------    ---------------------
<S>                                                                           <C>                     <C>
INVESTMENTS:
  Fixed maturities available-for-sale, at fair value
   (amortized cost $13,814,538 and $12,909,455)                     $         13,919,204     $        13,215,042
  Mortgage loans on real estate (net of allowances
   of $18,155 and $30,339)                                                     1,497,237               1,543,507
  Equity investments available for sale, at fair value
   (cost $581,002 and $557,761)                                                  587,616                 637,434
  Policy loans                                                                 3,654,629               3,548,225
  Short-term investments available-for-sale
   (cost approximates fair value)                                                849,470                 708,801
                                                                        --------------------    ---------------------
    Total investments                                                         20,508,156              19,653,009

OTHER ASSETS:
  Cash                                                                            59,940                 110,518
  Reinsurance receivable:
   Related party                                                                 525,711               1,072,940
   Other                                                                         235,231                 260,409
  Deferred policy acquisition costs                                              328,021                 301,603
  Deferred ceding commission                                                      80,954                  82,648
  Investment income due and accrued                                              149,421                 159,398
  Amounts receivable related to uninsured accident
   and health plan claims (net of allowances of
   $19,752 and $22,938)                                                          151,977                 144,312
  Premiums in course of collection (net of allowances
   of $5,833 and $8,029)                                                         114,844                  95,627
  Deferred income taxes                                                          196,951                 138,845
  Collateral for securities lending program                                      197,759                 349,913
  Due from GWL&A Financial Inc.                                                    9,452                  55,915
  Other assets                                                                   522,057                 485,357
SEPARATE ACCOUNT ASSETS                                                       14,292,436              14,155,397
                                                                        --------------------    ---------------------

TOTAL ASSETS                                                        $         37,372,910     $        37,065,891
                                                                        ====================    =====================







See notes to consolidated financial statements.                                                     (Continued)
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                   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
                           CONSOLIDATED BALANCE SHEETS
                      (In Thousands, Except Share Amounts)
                                   (Unaudited)





                                                                           September 30,            December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY                                           2005                     2004
------------------------------------
                                                                        --------------------    ---------------------
<S>                                                                           <C>                     <C>
POLICY BENEFIT LIABILITIES:
  Policy reserves:
   Related party                                                    $          4,927,331     $         5,170,447
   Other                                                                      13,217,243              12,771,872
  Policy and contract claims                                                     386,260                 360,862
  Policyholders' funds                                                           319,574                 327,409
  Provision for policyholders' dividends                                         117,291                 118,096
  Undistributed earnings on participating business                               187,142                 192,878

GENERAL LIABILITIES:
  Due to The Great-West Life Assurance Company                                    36,764                  26,659
  Due to GWL&A Financial Inc.                                                    199,125                 194,164
  Repurchase agreements                                                          749,319                 563,247
  Commercial paper                                                                94,309                  95,044
  Payable under securities lending agreements                                    197,759                 349,913
  Other liabilities                                                              629,515                 695,542
SEPARATE ACCOUNT LIABILITIES                                                  14,292,436              14,155,397
                                                                        --------------------    ---------------------
    Total liabilities                                                         35,354,068              35,021,530
                                                                        --------------------    ---------------------

COMMITMENTS AND CONTINGENCIES                                                    -                       -

STOCKHOLDER'S EQUITY:
  Preferred stock, $1 par value, 50,000,000 shares
    authorized; 0 shares 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                                                     727,153                 725,935
  Accumulated other comprehensive income                                          23,343                 118,795
  Retained earnings                                                            1,261,314               1,192,599
                                                                        --------------------    ---------------------
    Total stockholder's equity                                                 2,018,842               2,044,361
                                                                        --------------------    ---------------------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                          $         37,372,910     $        37,065,891
                                                                        ====================    =====================







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


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<CAPTION>



                   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                   (Unaudited)




                                                                              Nine Months Ended September 30,
                                                                        ---------------------------------------------
OPERATING ACTIVITIES:                                                          2005                     2004
                                                                        --------------------    ---------------------
<S>                                                                           <C>                      <C>
  Net income                                                         $        290,073        $        250,390
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
   Earnings allocated to participating policyholders                            2,655                  10,670
   Amortization of net investment premiums (discounts)                        (20,944)                 32,053
   Net realized gains on investments
    and write-downs of mortgage loans                                         (60,570)                (43,769)
   Depreciation and amortization                                               54,073                  54,954
   Deferral of acquisition costs                                              (35,768)                (38,053)
   Deferred income taxes                                                         (333)                 (1,361)
  Changes in assets and liabilities:
   Policy benefit liabilities                                                  69,609                (265,746)
   Reinsurance receivable                                                     104,284                 104,853
   Accrued interest and other receivables                                     (12,623)                 13,598
   Other, net                                                                (214,885)               (100,476)
                                                                        --------------------    ---------------------

    Net cash provided by operating activities                                 175,571                  17,113
                                                                        --------------------    ---------------------

INVESTING ACTIVITIES:
  Proceeds from sales, maturities and redemptions of investments: Fixed
   maturities available-for-sale:
    Sales                                                                  10,518,966               6,334,760
    Maturities and redemptions                                              1,425,046               4,040,872
   Mortgage loans on real estate                                              250,365                 271,417
   Common stock                                                               170,732                  74,265
  Purchases of investments:
   Fixed maturities available-for-sale                                    (12,394,544)            (10,075,221)
   Mortgage loans on real estate                                              (67,424)                (25,731)
   Common stock                                                              (113,880)               (218,438)
  Net change in short-term investments                                       (140,669)               (192,280)
  Other, net                                                                  (34,850)                (85,320)
                                                                        --------------------    ---------------------

    Net cash (used in) provided by investing activities                      (386,258)                124,324
                                                                        --------------------    ---------------------







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


<TABLE>
<CAPTION>



                   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In Thousands)
                                   (Unaudited)





                                                                              Nine Months Ended September 30,
                                                                        -------------------- -- ---------------------
FINANCING ACTIVITIES:                                                          2005                     2004
                                                                        --------------------    ---------------------
<S>                                                                 <C>                      <C>
  Net contract deposits (withdrawals)                               $         104,954        $       (234,337)
  Change in due to The Great-West Life Assurance Company                       10,105                  (9,249)
  Change in due to GWL&A Financial Inc.                                        51,024                 (37,862)
  Dividends paid                                                             (221,358)               (100,072)
  Net commercial paper (repayments) borrowings                                   (735)                    610
  Change in bank overdrafts                                                    30,047                 (18,984)
  Net repurchase agreement transactions                                       186,072                 181,877
                                                                        --------------------    ---------------------

    Net cash provided by (used in) financing activities                       160,109                (218,017)
                                                                        --------------------    ---------------------

NET DECREASE IN CASH                                                          (50,578)                (76,580)

CASH, BEGINNING OF PERIOD                                                     110,518                 188,329
                                                                        --------------------    ---------------------

CASH, END OF PERIOD                                                 $          59,940        $        111,749
                                                                        ====================    =====================


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

  Cash paid during the periods for:
   Income taxes                                                     $             41,879     $        123,799
   Interest                                                                        9,381               11,443






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


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                   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
                 CONSOLIDATED STATEMENT OF STOCKHOLDER'S EQUITY
                      NINE MONTHS ENDED SEPTEMBER 30, 2005
                                 (In Thousands)
                                   (Unaudited)




                                                                                         Accumulated Other
                                                                                    Comprehensive Income (Loss)
                                                                                   -----------------------------
                                                                                   Unrealized    Minimum
                                Preferred Stock       Common Stock     Additional     Gains       Pension
                              ------------------- ------------------   Paid-in     (Losses)on    Liability    Retained
                               Shares     Amount   Shares    Amount    Capital     Securities    Adjustment   Earnings      Total
                              --------   -------- --------  --------   ---------   ------------ -----------  -----------  ----------
<S>              <C>                   <C>          <C>    <C>       <C>         <C>           <C>          <C>         <C>
BALANCE, JANUARY 1, 2005           -   $      -     7,032  $  7,032  $  725,935  $   133,546   $  (14,751)  $ 1,192,599 $ 2,044,361

  Net income                                                                                                    290,073     290,073
  Other comprehensive income                                                         (95,293)        (159)                  (95,452)
                                                                                                                          ----------
   Total comprehensive income                                                                                               194,621
                                                                                                                          ----------
  Dividends                                                                                                    (221,358)   (221,358)
  Income tax benefit on stock
   compensation                                                           1,218                                               1,218

                              --------   -------- --------  --------   ---------   ------------ -----------  ----------- -----------
BALANCE, SEPTEMBER 30, 2005        -   $      -     7,032  $  7,032  $  727,153  $    38,253   $  (14,910)  $ 1,261,314 $ 2,018,842
                              ========   ======== ========  ========   =========   ============ ===========  ===========  ==========


</TABLE>



See notes to consolidated financial statements.



                   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (In Thousands)
                                   (Unaudited)



1.       ORGANIZATION AND BASIS OF PRESENTATION

         Great-West Life & Annuity Insurance Company and its subsidiaries
         (collectively, the "Company") is a direct wholly-owned subsidiary of
         GWL&A Financial Inc. ("GWL&A Financial"), a holding company formed in
         1998. GWL&A Financial is an indirect wholly-owned subsidiary of
         Great-West Lifeco Inc. ("Lifeco"). The Company offers a wide range of
         life insurance, health insurance and retirement and investment products
         to individuals, businesses and other private and public organizations
         throughout the United States. The Company is an insurance company
         domiciled in the State of Colorado and is subject to regulation by the
         Colorado Division of Insurance.

         The Company's consolidated financial statements and related notes have
         been prepared in accordance with accounting principles generally
         accepted in the United States of America applicable to interim
         financial reporting and do not include all of the information and notes
         required for complete financial statements. However, in the opinion of
         management, these statements include all normal recurring adjustments
         necessary for a fair presentation of the results. These consolidated
         financial statements should be read in conjunction with the audited
         consolidated financial statements and the accompanying notes included
         in the Company's latest annual report on Form 10-K for the year ended
         December 31, 2004.

         Operating results for the nine-month period ended September 30, 2005
         are not necessarily indicative of the results that may be expected for
         the full year ending December 31, 2005.

         Lifeco maintains the Great-West Lifeco Inc. Stock Option Plan (the
         "Plan") that provides for the granting of options on its common shares
         to certain of its officers and employees and those of its subsidiaries,
         including the Company. The Company accounts for stock options granted
         under the plan in accordance with the recognition and measurement
         principles of Accounting Principles Board Opinion 25 "Accounting for
         Stock Issued to Employees," ("APB No. 25") and related interpretations.
         Refer to Note 2 - New Accounting Pronouncements, regarding changes to
         the accounting for stock options that the Company will implement on
         January 1, 2006. No stock-based employee compensation cost is reflected
         in net income in the accompanying consolidated financial statements, as
         all options granted under the plan had an exercise price equal to the
         market value of the underlying common stock on the date of grant.

         The following table illustrates the effect on net income if the Company
         had applied the fair value recognition provisions of Statement of
         Financial Accounting Standards No. 123, "Accounting for Stock-Based
         Compensation" ("SFAS No. 123"), as revised by Statement of Financial
         Accounting Standards No. 123R "Share-Based Payment" ("SFAS No. 123R"),
         to stock-based employee compensation.

<TABLE>
<CAPTION>

                                                           Three Months Ended                    Nine Months Ended
                                                             September 30,                         September 30,
                                                   -----------------------------------    --------------------------------
                                                        2005                2004               2005              2004
                                                   ----------------     --------------    ---------------    -------------
<S>                                            <C>                  <C>                <C>                <C>
        Net income, as reported                $    80,871          $        90,074    $      290,073     $      250,390
        Less compensation for the fair
         value of stock options, net
         of related tax effects                     624                         934             2,113              2,854
                                                   ----------------     --------------    ---------------    -------------
        Proforma net income                    $    80,247          $        89,140    $      287,960     $      247,536
                                                   ================     ==============    ===============    =============
</TABLE>

         Certain reclassifications have been made to the 2004 consolidated
         financial statements or related notes to conform to the 2005
         presentation. These changes in classification had no effect on
         previously reported stockholder's equity or net income.


2.       NEW ACCOUNTING PRONOUNCEMENTS

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

         In December 2004, the FASB issued Statement of Financial Accounting
         Standards No. 123R "Share-Based Payment" ("SFAS 123R"). SFAS 123R
         replaces SFAS 123 and supersedes APB No. 25. SFAS 123R requires a
         company to use the fair value method to account for its stock-based
         employee compensation and to provide certain other additional
         disclosures. Previously, the Company elected to only disclose the
         impact of recording the fair value of stock options in the notes to its
         consolidated financial statements. The Company will adopt the
         provisions of SFAS 123R on January 1, 2006 and does not expect the
         adoption of SFAS 123R to have a material effect on its consolidated
         financial position or results of operations.

         In January 2004, the FASB issued Emerging Issues Task Force Issue No.
         03-1, "The Meaning of Other-Than-Temporary Impairment and Its
         Application to Certain Investments" ("EITF 03-1"). EITF 03-1 provides
         guidance on the disclosure requirements, which were effective as of
         December 31, 2003, for other-than-temporary impairments of debt and
         marketable equity investments that are accounted for under SFAS No.
         115, "Accounting for Certain Investments in Debt and Equity Securities"
         ("SFAS 115"). EITF 03-1 also included guidance on the measurement and
         recognition of other-than-temporary impairments of certain investments,
         which was originally going to be effective during the quarter ended
         September 30, 2004. However, in response to various concerns raised by
         financial statement preparers and others, the measurement and
         recognition provisions of EITF 03-1 were delayed. The FASB staff has
         announced its intention to issue FASB Staff Position 115-1 ("FSP
         115-1"). When issued, FSP 115-1 will replace the guidance set forth in
         paragraphs 10-18 of EITF 03-1 with new interpretations of existing
         measurement and recognition guidance. FSP 115-1 is expected to be
         effective for reporting periods beginning after December 15, 2005. The
         Company is evaluating the impact the adoption of FSP 115-1 will have on
         its financial position and results of operations.

3.       RELATED-PARTY TRANSACTIONS

         On August 31, 2003, the Company and The Canada Life Assurance Company
         ("CLAC"), an affiliate, entered into an Indemnity Reinsurance Agreement
         pursuant to which the Company assumed 80% (45% coinsurance and 35%
         coinsurance with funds withheld) of certain life, health and annuity
         business of CLAC's United States branch.

         On February 29, 2004, CLAC recaptured the group life and health
         business from the Company associated with the original Indemnity
         Reinsurance Agreement dated August 31, 2003. The Company recorded an
         income statement impact of $256,318 of negative premium income and
         change in reserves associated with these policies. The Company also
         recorded, at fair value, the following at February 29, 2004 as a result
         of this transaction:

<TABLE>
<CAPTION>


         Assets                                                          Liabilities and Stockholder's Equity
         ------                                                          ------------------------------------
<S>                                                <C>                                                          <C>
         Cash                                      $       (126,105)     Policy reserves                        $      (286,149)
         Reinsurance receivable                            (152,077)     Policy and contract claims                     (32,755)
         Deferred ceding commission                         (29,831)     Policyholders' funds                           (3,982)
         Premiums in course of collection                   (14,873)
                                                     ------------------                                         ----------------
                                                   $       (322,886)                                            $      (322,886)
                                                     ==================                                          ================

         Effective April 1, 2005, the Company and CLAC amended the Indemnity
         Reinsurance Agreement to adjust the coinsurance and coinsurance with
         funds withheld through the transfer of $468,123 of assets from CLAC to
         the Company as follows:

         Assets                                                          Liabilities and Stockholder's Equity
         ------                                                          ------------------------------------
         Bonds                                     $        414,623                                             $          -
         Mortgages                                           49,218
         Investment income due and accrued                    4,282
         Reinsurance receivable                            (468,123)
                                                     ------------------                                         ----------------
                                                   $           -                                                $          -
                                                     ==================                                         ================
</TABLE>

         As a result of this transaction, the reinsured 80% of the life, health
         and annuity business is currently 58% coinsurance and 22% coinsurance
         with funds withheld. Under the amended agreement, the remaining funds
         withheld assets will be transferred to the Company prior to December
         31, 2007.

         On November 15, 2004, the Company issued a surplus note to GWL&A
         Financial with a face amount of $195,000 and carrying amounts of
         $194,172 and $194,164 at September 30, 2005 and December 31, 2004,
         respectively. The surplus note bears interest at the rate of 6.675% per
         annum, payable in arrears on each May 14 and November 14. The surplus
         note matures on November 14, 2034. On December 16, 2004, the Company
         used the proceeds from the issuance of the surplus note to redeem its
         $175,000 subordinated note payable to GWL&A Financial and for general
         corporate purposes.

         The Company's separate accounts include mutual funds or other
         investment options that, beginning in 2005, purchase guaranteed
         interest annuity contracts issued by the Company. During the three and
         nine months ended September 30, 2005, these purchases totaled $18,474
         and $352,888, respectively. As the general account investment contracts
         are also included in the separate account balances in the accompanying
         consolidated balance sheets, the Company has reduced the separate
         account assets and liabilities by $324,607 at September 30, 2005 to
         avoid the overstatement of assets and liabilities in its consolidated
         balance sheet at that date.

4.       IMPAIRMENT OF FIXED MATURITY AND EQUITY INVESTMENTS

         The Company classifies all of its fixed maturity and equity investments
         as available-for-sale and marks them to market recording unrealized
         gains and losses in the other comprehensive income section of
         stockholder's equity. All securities with gross unrealized losses at
         the consolidated balance sheet date are subjected to the Company's
         process for identifying other-than-temporary impairments.

         The Company writes down to fair value securities that it deems to be
         other-than-temporarily impaired in the period the securities are deemed
         to be so impaired. The Company records writedowns as investment losses
         and adjusts the cost basis of the securities accordingly. The Company
         does not change the revised cost basis for subsequent recoveries in
         value.

         The assessment of whether an other-than-temporary impairment has
         occurred is based on management's case-by-case evaluation of the
         underlying reasons for the decline in fair value. Management considers
         a wide range of factors, as described below, about the security issuer
         and uses its best judgment in evaluating the cause of the decline in
         the estimated fair value of the security and in assessing the prospects
         for near-term recovery. Inherent in management's evaluation of the
         security are assumptions and estimates about the operations of the
         issuer and its future earnings potential.

         Considerations used by the Company in the impairment evaluation process
         include, but are not limited to, the following:

          o    The fair value is significantly below cost.
          o    The decline in fair value is  attributable  to  specific  adverse
               conditions  affecting a  particular  instrument,  its issuer,  an
               industry or a geographic area.
          o    The decline in fair value has  existed for an extended  period of
               time.
          o    A debt security has been downgraded by a rating agency.
          o    The financial condition of the issuer has deteriorated.
          o    Dividends  have been  reduced/eliminated  or  scheduled  interest
               payments have not been made.

         While all available information is taken into account, it is difficult
         to predict the ultimate recoverable amount of a distressed or impaired
         security.

         The Company's portfolio of fixed maturity investments fluctuates in
         value based upon interest rates in financial markets and other economic
         factors. These fluctuations, caused by market interest rate changes,
         have little bearing on whether or not the investment will be ultimately
         recoverable. Therefore, the Company considers these declines in value
         to be temporary, even in periods exceeding one year.

         During the three months ended September 30, 2005 and 2004, the Company
         recorded other-than-temporary impairments in the fair value of its
         fixed maturity investments of $3,365 and $8,070, respectively. During
         the nine months ended September 30, 2005 and 2004, the Company recorded
         other-than-temporary impairments in the fair value of its fixed
         maturity investments of $7,797 and $11,232, respectively. No
         impairments were recorded on equity securities for any of the three or
         nine-month periods ended September 30, 2005 or 2004.

5.       REINSURANCE

         The Company enters into reinsurance transactions as both a provider and
         purchaser of reinsurance. In addition to the Indemnity Reinsurance
         Agreement entered into with CLAC (See Note 3 above), the Great-West
         Healthcare division of the Company entered into a reinsurance agreement
         during 2003 with Allianz Risk Transfer (Bermuda) Limited to cede 40% in
         2005 and 75% in 2004 of direct written group health stop-loss and
         excess loss activity.

6.       COMPONENTS OF NET PERIODIC BENEFIT COST

         The components of the cost of employee benefit plans included in
         operating expenses during the three and nine-month periods ended
         September 30, 2005 and 2004 are as follows:

<TABLE>
<CAPTION>

                                                       Three Months Ended                      Three Months Ended
                                                          September 30,                          September 30,
                                               ------------------------------------    -----------------------------------
                                                     2005                2004              2005                2004
                                               -----------------    ---------------    -------------     -----------------
                                                                                                Post-Retirement
                                                        Pension Benefits                          Medical Plan
                                               ------------------------------------    -----------------------------------
<S>                                         <C>                  <C>                <C>               <C>
        Service cost                        $        2,125       $      2,144       $         596     $          722
        Interest cost                                3,634              3,329                 606                684
        Expected return on plan
         Assets                                     (3,902)            (3,733)                  -                  -
        Amortization of transition
         obligation                                   (379)              (379)                  -                  -
        Amortization of unrecogniz-
         ed prior service cost                         158                158                (467)              (178)
        Amortization of gains from
         earlier periods                             1,009                688                 113                166
                                               ----------------     ---------------    -------------     -----------------
        Net periodic benefit cost           $        2,645       $      2,207       $         848     $        1,394
                                               ================     ===============    =============     =================

                                                        Nine Months Ended                      Nine Months Ended
                                                          September 30,                          September 30,
                                               ------------------------------------    -----------------------------------
                                                    2005                2004               2005                2004
                                               ----------------    ----------------    -------------      ----------------
                                                                                                Post-Retirement
                                                        Pension Benefits                          Medical Plan
                                               ------------------------------------    -----------------------------------
        Service cost                        $        6,399      $       6,432       $      2,000     $         2,166
        Interest cost                               10,963              9,987              1,953               2,052
        Expected return on plan
         assets                                    (11,706)           (11,199)                  -                   -
        Amortization of transition
         obligation                                 (1,137)            (1,137)                  -                   -
        Amortization of unrecogniz-
         ed prior service cost                         474                474             (1,112)               (534)
        Amortization of gains from
         earlier periods                             3,132              2,064                390                 498
                                               ---------------     ----------------    -------------      ----------------
        Net periodic benefit cost           $        8,125      $       6,621       $      3,231     $         4,182
                                               ===============     ================    =============      ================
</TABLE>

         During the three months ended September 30, 2004, the Company made a
         payment in the amount of $3,200 to fund its 2004 pension plan
         obligation. This payment completely funded the 2004 obligation. The
         Company does not expect to make contributions to its pension plan
         during the year ended December 31, 2005.



7.       BUSINESS SEGMENT INFORMATION

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

         The following table summarizes the financial results of the Company's
         Great-West Healthcare segment for the three and nine-month periods
         ended September 30, 2005 and 2004:

<TABLE>
<CAPTION>

                                                          Three Months Ended                     Nine Months Ended
                                                            September 30,                          September 30,
                                                  -----------------------------------     ---------------------------------
                                                      2005                2004                 2005               2004
                                                  --------------     ----------------     ---------------     -------------
<S>                                            <C>                <C>                 <C>                 <C>
         Premium income                        $      191,911     $       131,406     $       522,457     $      163,294
         Fee income                                   163,653             165,353             492,534            473,036
         Net investment income                         17,030               6,571              47,450             32,325
         Net realized gains on
          investments                                   1,397               5,382              22,453             11,106
                                                  --------------     ----------------     ---------------     -------------
         Total revenues                               373,991             308,712           1,084,894            679,761
         Total benefits and expenses                  313,979             260,096             887,890            521,025
         Income tax expenses                           19,950              15,892              64,691             52,541
                                                  --------------     ----------------     ---------------     -------------
         Net income                            $       40,062     $        32,724     $       132,313     $      106,195
                                                  ==============     ================     ===============     =============

         The following table summarizes the financial results of the Company's
         Financial Services segment for the three and nine-month periods ended
         September 30, 2005 and 2004:

                                                         Three Months Ended                     Nine Months Ended
                                                           September 30,                          September 30,
                                                 -----------------------------------     ---------------------------------
                                                     2005                2004                 2005              2004
                                                 --------------     ----------------     ---------------    --------------
         Premium income                       $       80,962     $       49,154      $       300,582     $      295,073
         Fee income                                   76,758             67,632              223,169            201,128
         Net investment income                       236,623            270,581              755,307            764,288
         Net realized gains (losses)
          on investments                                (649)             9,077               38,117             32,663
                                                 --------------     ----------------     ---------------    --------------
         Total revenues                              393,694            396,444            1,317,175          1,293,152
         Total benefits and expenses                 335,831            313,480            1,092,979          1,080,976
         Income tax expenses                          17,054             25,614               66,436             67,981
                                                 --------------     ----------------     ---------------    --------------
         Net income                           $       40,809     $       57,350      $       157,760     $      144,195
                                                 ==============     ================     ===============    ==============
</TABLE>

8.       COMMITMENTS AND CONTINGENCIES

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



<PAGE>


         During 2002, the Company entered into a corporate credit facility
         agreement in the amount of $50,000 for general corporate purposes. The
         agreement was extended by an amended agreement on May 26, 2005. The
         credit facility matures on May 26, 2010. Interest accrues at a rate
         dependent on various conditions and terms of borrowings. The agreement
         requires the Company to maintain a minimum adjusted net worth of
         $900,000 plus 50% of its net income, if positive (both compiled by the
         unconsolidated statutory accounting basis prescribed by the National
         Association of Insurance Commissioners), for each quarter ending after
         March 31, 2005. The Company had no borrowings under the credit facility
         at either September 30, 2005 or December 31, 2004.



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

         GENERAL

         This Form 10-Q contains forward-looking statements. Forward-looking
         statements are statements not based on historical information and that
         relate to future operations, strategies, financial results or other
         developments. In particular, statements using verbs such as "expect,"
         "anticipate," "believe," or words of similar import generally involve
         forward-looking statements. Without limiting the foregoing,
         forward-looking statements include statements which represent the
         Company's beliefs concerning future or projected levels of sales of its
         products, investment spreads or yields or the earnings or profitability
         of its activities. Forward-looking statements are necessarily based
         upon estimates and assumptions that are inherently subject to
         significant business, economic and competitive uncertainties and
         contingencies, many of which are beyond the Company's control and many
         of which, with respect to future business decisions, are subject to
         change. These uncertainties and contingencies can affect actual results
         and could cause actual results to differ materially from those
         expressed in any forward-looking statements made by, or on behalf of,
         the Company. Whether or not actual results differ materially from
         forward-looking statements may depend on numerous foreseeable and
         unforeseeable events or developments, some of which may be national in
         scope, such as general economic conditions and interest rates, some of
         which may be related to the insurance industry generally, such as
         pricing competition, regulatory developments and industry
         consolidation, and others of which may relate to the Company
         specifically, such as credit, volatility and other risks associated
         with its investment portfolio and other factors. Readers are also
         directed to consider other risks and uncertainties discussed in
         documents filed by the Company and certain of its subsidiaries with the
         Securities and Exchange Commission.

         The following discussion addresses the financial condition of the
         Company as of September 30, 2005 compared with December 31, 2004 and
         its results of operations for the three and nine-month periods ended
         September 30, 2005 compared with the same periods of the preceding
         year. The discussion should be read in conjunction with the
         Management's Discussion and Analysis of Financial Condition and Results
         of Operations section included in the Company's report on Form 10-K for
         the year ended December 31, 2004, to which the reader is directed for
         additional information.


<TABLE>
<CAPTION>

                                                          Three Months Ended                    Nine Months Ended
                Results of Operations                       September 30,                         September 30,
                                                  -----------------------------------    ---------------------------------
                    (In millions)                     2005                2004               2005               2004
         ------------------------------------     --------------    -----------------    --------------    ---------------
<S>                                           <C>                <C>                  <C>               <C>
         Premium income                       $         273      $         181        $        823      $        458
         Fee income                                     240                233                 716               674
         Net investment income                          254                277                 803               797
         Net realized investment gains                    1                 14                  60                44
                                                  --------------    -----------------    --------------    ---------------
         Total revenues                                 768                705               2,402             1,973
         Total benefits and expenses                    650                573               1,981             1,602
         Income tax expenses                             37                 42                 131               121
                                                  --------------    -----------------    --------------    ---------------
         Net income                           $          81      $          90        $        290      $        250
                                                  ==============    =================    ==============    ===============

         Deposits for investment-
          type contracts (1)                  $         197      $         191        $        988      $        535
         Deposits to separate accounts                  534                475               1,616             1,467
         Self-funded premium equivalents              1,162              1,194               3,469             3,519
</TABLE>

         (1) Includes $19 and $0 during the three months ended September 30,
         2005 and 2004, respectively, and $353 and $0 during the nine months
         ended September 30, 2005 and 2004, respectively, of the Company's
         guaranteed interest annuity contracts purchased by affiliated funds or
         other separate account investment options as discussed in Note 3 to the
         accompanying consolidated financial statements.


<TABLE>
<CAPTION>

                              Balance Sheet
                              (In millions)                             September 30, 2005          December 31, 2004
         --------------------------------------------------------    ------------------------    -------------------------
<S>                                                               <C>                         <C>
         Investment assets                                        $         20,508            $            19,653
         Separate account assets                                            14,292                         14,155
         Total assets                                                       37,373                         37,066
         Total policy benefit liabilities                                   19,155                         18,942
         Due to The Great-West Life Assurance Company                           37                             27
         Due to GWL&A Financial Inc.                                           199                            194
         Total stockholder's equity                                          2,019                          2,044
</TABLE>

         CONSOLIDATED RESULTS

         Three months ended September 30, 2005 compared with the three months
         ended September    30, 2004

         The Company's consolidated net income decreased by $9 million, or 10%,
         to $81 million during the three months ended September 30, 2005 when
         compared to the same period in 2004. The decrease was due in part to a
         $13 million change in the marking to market of the embedded derivative
         associated with the CLAC funds withheld reinsurance agreement, net of
         policyholder related amounts and deferred taxes.

         Total revenues increased by $63 million, or 9%, to $768 million during
         the three months ended September 30, 2005 when compared to the same
         period in 2004. The increase is largely due to a decrease in the
         contractual reinsurance cession percentages, from 75% in 2004 to 40% in
         2005, with Allianz Risk Transfer (Bermuda) Limited ("Allianz"). This
         ceding percentage decrease caused ceded premiums to decrease by $40
         million during 2005 when compared to 2004. Premium revenue was also
         favorably impacted by improved renewal pricing in the Great-West
         Healthcare segment and by transfers by participants from investment
         options for which the Company provides administrative and
         record-keeping services to the Company's investment options, which are
         offered in connection with its general and separate accounts in the
         Financial Services segment. These increases were partially offset by a
         $42 million reduction in net investment income resulting from the
         marking to market of the embedded derivative on the funds withheld
         reinsurance agreement.

         Benefits and expenses increased by $77 million, or 13%, to $650 million
         during the three months ended September 30, 2005 when compared to the
         same period of 2004. Benefits and expenses increased by $54 million in
         the Healthcare segment primarily due to a $40 million decrease in
         benefits ceded to Allianz during 2005 when compared to 2004 as a result
         of the lower contractual cession percentages on the contract. Operating
         expenses, including commission expenses and premium taxes, remained
         relatively constant during each of the three month periods ended
         September 30, 2005 and 2004. Income tax expense decreased by $4 million
         principally as a result of lower income during the three months ended
         September 30, 2005 when compared to the same period of 2004.

         In evaluating its results of operations, the Company also considers net
         changes in deposits received for investment-type contracts, deposits to
         separate accounts and self-funded premium equivalents. Self-funded
         premium equivalents represent paid claims under minimum premium and
         administrative services only contracts. These amounts approximate the
         additional premiums, which would have been earned under such contracts
         if they had been written as traditional indemnity or HMO programs.

         Deposits for investment-type contracts remained relatively constant
         during each of the three-month periods ended September 30, 2005 and
         2004.

         Deposits to the separate accounts increased by $59 million, or 12%, to
         $534 million during the three month period ended September 30, 2005
         when compared to the same period of 2004. The increase reflects higher
         transfers by participants in the Financial Services segment from
         unaffiliated retail investment options to those options provided by the
         Company.

         Self-funded premium equivalents decreased by $32 million, or 3%, to
         $1,162 million at September 30, 2005 when compared to September 30,
         2004.

         Nine months ended September 30, 2005 compared with the nine months
         ended September 30, 2004

         The Company's consolidated net income increased by $40 million, or 16%,
         to $290 million during the first nine months of 2005 when compared to
         the same period in 2004. The net income increase reflects a $26 million
         increase in the Great-West Healthcare segment and a $14 million
         increase in the Financial Services segment. The increase was primarily
         the result of increased fee income of $42 million and net realized
         investment gains of $16 million in both segments.

         Total revenues increased by $429 million, or 22%, to $2,402 million
         during the first nine months of 2005 when compared to the same period
         in 2004. The increase is primarily the result of the February 2004,
         CLAC recapture of certain group life and health business from the
         Company associated with the original Indemnity Reinsurance Agreement,
         as discussed in Note 3 to the accompanying consolidated financial
         statements. During the first quarter of 2004, the Company recorded an
         income statement impact of $256 million of negative premium income and
         change in reserves associated with these recaptured policies. In
         addition, premiums ceded to Allianz decreased by $99 million during
         2005 when compared to 2004 as a result of the lower contractual cession
         percentages on the contract. Fee income increased by $42 million during
         the nine-month period ended September 30, 2005. The increase resulted
         from approximately equal favorable results from the Great-West
         Healthcare segment attributed to increased pharmacy benefits management
         contract revenue and from improved renewal pricing and the Financial
         Services segment attributed to higher fees for providing administrative
         services to institutional clients.

         Benefits and expenses increased by $379 million, or 24%, to $1,981
         million during the first nine months of 2005 when compared to the first
         nine months in 2004. The increase in benefits and expenses is primarily
         due to the aforementioned decrease in reinsurance in the amount of $256
         million during 2004. In addition, benefits ceded to Allianz decreased
         by $99 million during 2005 when compared to 2004 as a result of the
         lower contractual cession percentages on the contract. Operating
         expenses, including commission expense, premium taxes and other
         operating expenses decreased by $27 million, or 4%, to $724 million
         during the nine months ended September 30, 2005.

         Deposits for investment-type contracts and deposits to the separate
         accounts increased by $602 million, or 30%, to $2,604 million during
         the nine months ended September 30, 2005 when compared to the same
         period in 2004. The increase is due to an increase in transfers by
         participants from unaffiliated retail investment options to the
         company's investment options for which it provides plan and participant
         record keeping services.

         Self-funded premium equivalents decreased by $50 million, or 1%, to
         $3,469 million during the nine months ended September 30, 2005 when
         compared to the same period in 2004.


         SEGMENT RESULTS

         Great-West Healthcare Segment

         The following is a summary of certain financial data of the Great-West
         Healthcare segment for the three and nine-month periods ended September
         30, 2005 and 2004:

<TABLE>
<CAPTION>

                                                          Three Months Ended                    Nine Months Ended
                  Operating Summary                         September 30,                         September 30,
                                                  -----------------------------------    ---------------------------------
                    (In millions)                     2005                2004               2005               2004
         ------------------------------------     --------------    -----------------    --------------    ---------------
<S>                                           <C>                <C>                  <C>               <C>
         Premium income                       $         192      $         132        $        522      $        163
         Fee income                                     163                165                 493               473
         Net investment income                           17                  7                  48                33
         Net realized gains on
          investments                                     2                  5                  22                11
                                                  --------------    -----------------    --------------    ---------------
         Total revenues                                 374                309               1,085               680
         Total benefits and expenses                    314                260                 888               521
         Income tax expenses                             20                 16                  65                53
                                                  --------------    -----------------    --------------    ---------------
         Net income                           $          40      $          33        $        132      $        106
                                                  ==============    =================    ==============    ===============
         Self-funded premium
          equivalents                         $       1,162      $       1,194        $      3,469      $      3,519
</TABLE>


         The following is a summary of the Great-West Healthcare segment
         membership at September 30, 2005 and 2004:

<TABLE>
<CAPTION>

                         Membership                               September 30,
                                                     -----------------------------------------
                       (In millions)                         2005                 2004                    Change
         ------------------------------------------- -------------------    ------------------    ------------------------
<S>                                                             <C>                     <C>                     <C>
         Select and Mid Market Groups                           1.285                   1.349                   (4.7%)
         National and Specialty Risk Groups                      .680                    .599                   13.5%
                                                     -------------------    ------------------    ------------------------
         Total Membership                                       1.965                   1.948                     .8%
                                                     ===================    ==================    ========================
</TABLE>

         Three months ended September 30, 2005 compared with the three months
         ended September 30, 2004

         Net income for the Great-West Healthcare segment increased by $7
         million, or 21%, to $40 million for the three months ended September
         30, 2005 when compared to the same period of 2004. This increase is
         primarily due to improved net investment income margins and lower
         mortgage write-downs partially offset by a slight deterioration in loss
         ratios.

         Premium revenue increased by $60 million, or 45%, to $192 million
         during the three months ended September 30, 2005 when compared to the
         same period of 2004. The increase is largely due to a decrease in the
         contractual reinsurance cession percentages, from 75% in 2004 to 40% in
         2005, with Allianz. This ceding percentage decrease caused ceded
         premiums to decrease by $40 million during 2005 when compared to 2004.
         Premium revenue was also impacted by improved renewal pricing.

         Fee income during the quarter ended September 30, 2005 was relatively
         flat when compared to the same period of 2004.

         The Great-West Healthcare segment experienced a 4% increase in total
         health care membership from 1.892 million members at June 30, 2005, to
         1.965 million members at September 30, 2005. The increase in membership
         is the result of improved sales during the current quarter, primarily
         in the National and Specialty Risk markets, improved in quarter
         persistency and the acquisition of a third party administrator in the
         Specialty Risk Market during the third quarter of 2005.

         Total benefits and expenses increased by $54 million, or 21%, to $314
         million during the three months ended September 30, 2005 compared to
         the same period of 2004. The increase is primarily due to a $40 million
         decrease in benefits ceded to Allianz during 2005 when compared to 2004
         as a result of the lower contractual cession percentages on the
         contract. The remaining increase is the result of higher health claims
         related to specific stop loss coverage.

         Self-funded premium equivalents decreased by $32 million, or 3%, to
         $1,162 million for the three months ended September 30, 2005 when
         compared to the same period of 2004.

         Nine months ended September 30, 2005 compared with the nine months
         ended September 30, 2004

         Net income for the Great-West Healthcare segment increased by $26
         million, or 25%, to $132 million for the nine months ended September
         30, 2005 when compared to the same period of 2004. This increase is
         primarily due to higher realized gains on sales of equity investments
         during the period. Earnings were also impacted by an increase in
         pharmacy benefits management revenue and lower aggregate loss ratios,
         which offset higher specific loss ratios and the impact of lower
         membership.

         Premium revenue increased by $359 million, or 220%, to $523 million
         during the nine months ended September 30, 2005 when compared to the
         same period of 2004. The increase is attributable to the inclusion of
         negative premium in the amount of $207 million in 2004 as a result of
         the February 2004 recapture discussed in Note 3 in the accompanying
         consolidated financial statements, comprised of $256 million of
         negative premiums offset by $49 million of normal CLAC reinsurance
         activity recorded before the recapture. In addition, premiums ceded to
         Allianz decreased by $99 million during 2005 when compared to 2004 as a
         result of the lower contractual cession percentages on the contract.
         The remaining increase is the result of improved renewal pricing.

         Fee income during the nine months ended September 30, 2005 increased by
         $20 million, or 4%, to $493 million when compared to the same period of
         2004. The increase is primarily due to the increased pharmacy benefits
         management contract revenue and improved renewal pricing, partially
         offset by the impact of lower membership.

         The Great-West Healthcare segment experienced a 3% decrease in total
         health care membership from 2.021 million members at December 31, 2004,
         to 1.965 million members at September 30, 2005. There was a 1% increase
         in total health care membership from 1.948 million at September 30,
         2004 to 1.965 million at September 30, 2005. This increase is primarily
         driven by increased membership in the Specialty Risk market, partially
         offset by higher contract terminations and lower sales of new business
         in all other markets.

         Total benefits and expenses increased by $367 million, or 70%, to $888
         million during the nine months ended September 30, 2005 when compared
         to the same period of 2004. The increase is primarily due to a
         reduction in net Canada Life benefits in the amount of $250 million
         associated with the February 2004 reinsurance recapture discussed
         above, which was comprised of $256 million of negative change in
         reserves offset by $6 million of normal CLAC reinsurance activity
         recorded before the recapture. In addition, benefits ceded to Allianz
         decreased by $99 million during 2005 when compared to 2004 as a result
         of the lower contractual cession percentages on the contract. The
         remaining increase is the result of higher health claims related to
         specific stop loss coverage.

         Self-funded premium equivalents decreased by $50 million, or 1%, to
         $3,469 million for the nine month period ended September 30, 2005 when
         compared to the same periods of 2004 primarily due to a decline in
         membership.

         Financial Services Segment

         The following is a summary of certain financial data of the Financial
         Services segment for the three and nine-month periods ended September
         30, 2005 and 2004:

<TABLE>
<CAPTION>

                                                          Three Months Ended                     Nine Months Ended
                  Operating Summary                          September 30,                         September 30,
                                                  ------------------------------------    ---------------------------------
                    (In millions)                      2005                2004               2005               2004
         -------------------------------------    ---------------    -----------------    --------------    ---------------
<S>                                            <C>                <C>                  <C>               <C>
         Premium income                        $         81       $          49        $        301      $        295
         Fee income                                      77                  68                 223               201
         Net investment income                          237                 270                 755               764
         Net realized gains (losses)
          on investments                                 (1)                  9                  38                33
                                                  ---------------    -----------------    --------------    ---------------
         Total revenues                                 394                 396               1,317             1,293
         Total benefits and expenses                    336                 313               1,093             1,081
         Income tax expenses                             17                  26                  66                68
                                                  ---------------    -----------------    --------------    ---------------
         Net income                            $         41       $          57        $        158      $        144
                                                  ===============    =================    ==============    ===============

         Deposits for investment
          type contracts                       $        197       $         191        $        988      $        535
         Deposits to separate accounts                  534                 475               1,616             1,467
</TABLE>

         Three months ended September 30, 2005 compared with the three months
         ended September 30, 2004

         Net income for the Financial Services segment decreased by $16 million,
         or 28%, to $41 million during the three months ended September 30, 2005
         when compared to the same period of 2004. The decrease was due in part
         to a $13 million change in the marking to market of the embedded
         derivative associated with the CLAC funds withheld reinsurance
         agreement, net of policyholder related amounts and deferred taxes.

         Total premiums and deposits to investment-type contracts and deposits
         to separate accounts increased by $97 million, or 14%, to $812 million
         for the three months ended September 30, 2005 when compared to the same
         period of 2004 due to an increase in transfers by participants from
         unaffiliated retail investment options to the Company's investment
         options (general and separate accounts) for which the Company provides
         plan and participant record-keeping services.

         Fee income increased by $9 million, or 13%, to $77 million during the
         three months ended September 30, 2005 when compared to the same period
         of 2004. Fee income includes variable asset-based fees for retirement
         products and fees earned for providing administrative record keeping
         services for institutional accounts. Variable asset-based fees
         fluctuate with changes in participant account values. Account values
         change due to cash flow and unrealized market gains and losses
         associated with fluctuations in equity markets.

         Net investment income and net realized gains and losses on the sales of
         investments decreased by $43 million, or 15%, to $236 million during
         the three months ended September 30, 2005 when compared to the same
         period of 2004. The decrease was primarily due to a $42 million change
         in the marking to market of the embedded derivative through net
         investment income.

         Total benefits and expenses increased by $23 million, or 7% to $336
         million during the three months ended September 30, 2005 when compared
         to the same period of 2004. This is primarily due to an increase in
         reserves related to the individual term life insurance business and the
         marking to market of the embedded derivative.

         Nine months ended September 30, 2005 compared with the nine months
         ended September 30, 2004

         Net income for the Financial Services segment increased by $14 million,
         or 10%, to $158 million during the nine months ended September 30, 2005
         when compared to the same period of 2004. The increase in net income
         was primarily attributed to higher fee income during 2005 as the result
         of new sales in the administrative record keeping area and improved
         mortality in the Individual Markets line of business.

         Total premiums and deposits to investment-type contracts and deposits
         to separate accounts increased by $607 million, or 26%, to $2,904
         million during the nine-month period ended September 30, 2005 when
         compared to the same period of 2004. The increase is primarily within
         the Retirement Services business area. Premium revenue was favorably
         impacted by transfers by participants from investment options for which
         the Company provides administrative and record-keeping services to the
         Company's investment options, which are offered in connection with its
         general and separate accounts. The increase is due to an increase in
         transfers by participants from unaffiliated retail investment options
         to the company's investment options for which it provides plan and
         participant record keeping services. As discussed in Note 3 in the
         accompanying consolidated financial statements, the Company's separate
         accounts offer mutual funds or other investment options that, beginning
         in 2005, purchased guaranteed interest annuity contracts issued by the
         Company in the amount of $353 million, which is included in deposits
         for investment-type contracts.

         Fee income has increased by $22 million, or 11%, to $223 million during
         the nine months ended September 30, 2005 when compared to the same
         period of 2004. The increase during 2005 is primarily associated with
         higher fee income from providing administrative services to
         institutional clients for the retirement plans they administer.
         Retirement participant accounts, including third-party administration
         and institutional accounts, increased by 12% during 2005 from 2.412
         million at September 30, 2004 to 2.697 million at September 30, 2005.

         Net investment income and net realized gains and losses from the sale
         of investments remained relatively unchanged during the nine-month
         period ended September 30, 2005 compared to the same period of 2004.

         Total benefits and expenses increased by $12 million, or 1%, to $1,093
         million during the first nine months of 2005 when compared to the same
         period of 2004.

         GENERAL ACCOUNT INVESTMENTS

         The Company's primary investment objective is to acquire assets with
         duration and cash flow characteristics reflective of its liabilities,
         while meeting industry, size, issuer and geographic diversification
         standards. Formal liquidity and credit quality parameters have also
         been established.

         The Company follows rigorous procedures to control interest rate risk
         and observes strict asset and liability matching guidelines. These
         guidelines ensure that even under changing market conditions, the
         Company's assets will meet the cash flow and income requirements of its
         liabilities. Using dynamic modeling to analyze the effects of a range
         of possible market changes upon investments and policyholder benefits,
         the Company works to ensure that its investment portfolio is
         appropriately structured to fulfill financial obligations to its
         policyholders.

         Fixed Maturities

         Fixed maturity investments include public and privately placed
         corporate bonds, government bonds, and mortgage-backed and asset-backed
         securities. The Company's strategy related to mortgage-backed and
         asset-backed securities is to focus on those investments with low
         prepayment risk and minimal credit risk. The Company does not invest in
         higher-risk collateralized mortgage obligations such as interest-only
         and principal-only strips, and currently has no plans to invest in such
         securities.

         Private placement investments are generally less marketable than
         publicly traded assets, yet they typically offer enhanced covenant
         protection that allows the Company, if necessary, to take appropriate
         action to protect its investment. The Company believes that the cost of
         the additional monitoring and analysis required by private placements
         is more than offset by their enhanced yield.

         During the nine months ended September 30, 2005, net unrealized losses
         on fixed maturities included in the other comprehensive section of
         stockholder's equity, which is net of policyholder-related amounts and
         deferred income taxes, decreased stockholder's equity by $95 million.

         One of the Company's primary objectives is to ensure that its fixed
         maturity portfolio is maintained at a high average quality so as to
         limit credit risk. The following table contains the rating distribution
         of the Company's fixed maturity portfolio.

<TABLE>
<CAPTION>

         Rating                                                        September 30, 2005            December 31, 2004
         ------                                                     -------------------------     ------------------------
<S>                                                                            <C>                          <C>
         AAA                                                                   58.3      %                  56.9     %
         AA                                                                     7.5      %                   8.2     %
         A                                                                     15.2      %                  15.6     %
         BBB                                                                   16.5      %                  16.7     %
         BB and below (non-investment grade)                                    2.5      %                   2.6     %
                                                                    -------------------------     ------------------------
         TOTAL                                                                100.0      %                 100.0     %
                                                                    =========================     ========================
</TABLE>

         Impairment of Securities

         The Company classifies all of its fixed maturity and equity investments
         as available-for-sale and marks them to market recording unrealized
         gains and losses in the other comprehensive income section of
         stockholder's equity. All securities with gross unrealized losses at
         the consolidated balance sheet date are subjected to the Company's
         process for identifying other-than-temporary impairments.

         The Company writes down to fair value securities that it deems to be
         other-than-temporarily impaired in the period the securities are deemed
         to be so impaired. The Company records write-downs as investment losses
         and adjusts the cost basis of the securities accordingly. The Company
         does not change the revised cost basis for subsequent recoveries in
         value.

         The assessment of whether an other-than-temporary impairment has
         occurred is based on management's case-by-case evaluation of the
         underlying reasons for the decline in fair value. Management considers
         a wide range of factors, as described below, about the security issuer
         and uses its best judgment in evaluating the cause of the decline in
         the estimated fair value of the security and in assessing the prospects
         for near-term recovery. Inherent in management's evaluation of the
         security are assumptions and estimates about the operations of the
         issuer and its future earnings potential.

         Considerations used by the Company in the impairment evaluation process
         include, but are not limited to, the following:

          o    The fair value is significantly below cost.
          o    The decline in fair value is  attributable  to  specific  adverse
               conditions  affecting a  particular  instrument,  its issuer,  an
               industry or a geographic area.
          o    The decline in fair value has  existed for an extended  period of
               time. o A debt security has been downgraded by a rating agency.
          o    The financial condition of the issuer has deteriorated.
          o    Dividends  have been  reduced/eliminated  or  scheduled  interest
               payments have not been made.

         While all available information is taken into account, it is difficult
         to predict the ultimate recoverable amount of a distressed or impaired
         security.

         The Company's portfolio of fixed maturities fluctuates in value based
         upon interest rates in financial markets and other economic factors.
         These fluctuations, caused by market interest rate changes, have little
         bearing on whether or not the investment will be ultimately
         recoverable. Therefore, the Company considers these declines in value
         as temporary, even in periods exceeding one year. At September 30,
         2005, the Company's unrealized losses were $148 million compared to $81
         million at December 31, 2004. Investments in a loss position for less
         than twelve months totaled $100 million at September 30, 2005 which,
         was an increase of $67 million over those losses at December 31, 2004.
         The increase was generally attributable to the rise in interest rates
         during the first nine months of the year. Investments in a loss
         position greater than twelve months did not experience a significant
         change."

         During the three months ended September 30, 2005 and 2004, the Company
         recorded other-than-temporary impairments in the fair value of its
         fixed maturity investments of $3.4 million and $8.1 million,
         respectively. During the nine months ended September 30, 2005 and 2004,
         the Company recorded other-than-temporary impairments in the fair value
         of its fixed maturity investments of $7.8 million and $11.2 million,
         respectively. During the three months ended September 30, 2005, the
         other-than-temporary impairments relate primarily to the airline and
         automobile industries. At September 30, 2005, the market value of all
         fixed maturities in the airline and automobile industries was less than
         1.5% of total fixed maturities.

         No impairments were recorded on equity securities for any of the three
         or nine-month periods ended September 30, 2005 or 2004.

         CRITICAL ACCOUNTING POLICIES

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

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

         Policy Reserves

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

         Reinsurance - Policy reserves ceded to other insurance companies are
         carried as a reinsurance receivable on the balance sheet. The cost of
         reinsurance related to long-duration contracts is accounted for over
         the life of the underlying reinsured policies using assumptions
         consistent with those used to account for the underlying policies.
         Reinsurance contracts do not relieve the Company from its obligations
         to policyholders. Failure of reinsurers to honor their obligations
         could result in losses to the Company. The Company evaluates the
         financial condition of its reinsurers and monitors concentrations of
         credit risk arising from similar geographic regions, activities, or
         economic characteristics of the reinsurers to minimize its exposure to
         significant losses from reinsurer insolvencies. In the normal course of
         business, the Company seeks to limit its exposure to loss on any single
         insured and to recover a portion of benefits paid by ceding risks to
         other insurance enterprises under excess coverage and co-insurance
         contracts. The Company retains a maximum of $3.5 million of coverage
         per individual life.

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

         Allowance For Credit Losses

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

         Deferred Policy Acquisition Costs

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

         Valuation Of Privately Placed Fixed Maturities

         A large portion of the Company's invested assets is stated at fair
         value in its consolidated balance sheets based on quoted market prices.
         However, when such information is not available, fair value is
         estimated. The estimated fair values of financial instruments have been
         determined using available information and established valuation
         methodologies. However, considerable judgment is required to interpret
         market data to develop estimates of fair value. Accordingly, the
         estimates presented are not necessarily indicative of the amounts the
         Company could realize in a current market exchange. The use of
         different market assumptions and/or estimation methodologies may have a
         material effect on the estimated fair value amounts. The fair value of
         approximately 39% of the Company's fixed maturity investments at
         September 30, 2005 are valued using these type estimates.

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

         NEW ACCOUNTING PRONOUNCEMENTS

         See Note 2 to the accompanying consolidated financial statements for a
         discussion of new accounting pronouncements that the Company has
         recently adopted or will be adopting in the future.

         LIQUIDITY AND CAPITAL RESOURCES

         Liquidity refers to a company's ability to generate sufficient cash
         flows to meet the needs of its operations. The Company manages its
         operations to ensure stable, reliable and cost-effective sources of
         cash flows to meet all of its obligations.

         The principal sources of the Company's liquidity are premium and
         annuity considerations, investment and fee income and investment
         maturities and sales. The principal uses of the Company's liquidity
         relate to benefit payments, claim payments, payments to policy and
         contract holders in connection with surrenders and withdrawals,
         purchase of investments, commissions and general and administrative
         expenses.

         The Company's operations have liquidity requirements that vary among
         its principal product lines. Life insurance and pension plan reserves
         are primarily long-term liabilities. Accident and health reserves,
         including long-term disability, consist of both short-term and
         long-term liabilities. Life insurance and pension plan reserve
         requirements are usually stable and predictable, and are supported
         primarily by long-term, fixed income investments. Accident and health
         claim demands are stable and predictable but generally shorter term,
         requiring greater liquidity.

         Generally, the Company has met its operating requirements by
         maintaining appropriate levels of liquidity in its investment portfolio
         and utilizing cash flows from operations. Liquidity for the Company has
         remained strong, as evidenced by significant amounts of short-term
         investments and cash that totaled $909.4 million and $819.3 million as
         of September 30, 2005 and December 31, 2004, respectively. In addition,
         as of both September 30, 2005 and December 31, 2004, 97.5% of the
         Company's bond portfolio carried an investment grade rating, thereby
         providing significant liquidity to its overall investment portfolio.

         Funds provided by premiums and fees, investment income and maturities
         of investment assets are reasonably predictable and normally exceed
         liquidity requirements for payment of claims, benefits and expenses.
         However, since the timing of available funds cannot always be matched
         precisely to commitments, imbalances may arise when demands for funds
         exceed those on hand. Also, a demand for funds may arise as a result of
         the Company taking advantage of current investment opportunities. The
         sources of the funds that may be required in such situations include
         the issuance of commercial paper and equity securities. Management
         believes that the liquidity profile of its assets is sufficient to
         satisfy the liquidity requirements of reasonably foreseeable scenarios.

         The Company's financial strength provides the capacity and flexibility
         to enable it to raise funds in the capital markets through the issuance
         of commercial paper. The Company continues to be well capitalized, with
         sufficient borrowing capacity to meet the anticipated needs of its
         business. The Company had $94.3 million and $95.0 million of commercial
         paper outstanding at September 30, 2005 and December 31, 2004,
         respectively. The commercial paper has been given a rating of A-1+ by
         Standard & Poor's Ratings Services and a rating of P-1 by Moody's
         Investors Service, each being the highest rating available.

         Capital resources provide protection for policyholders and financial
         strength to support the underwriting of insurance risks and allow for
         continued business growth. The amount of capital resources that may be
         needed is determined by the Company's senior management and Board of
         Directors, as well as by regulatory requirements. The allocation of
         resources to new long-term business commitments is designed to achieve
         an attractive return, tempered by considerations of risk and the need
         to support the Company's existing business.

         OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

         There have been no material changes to the Company's off-balance sheet
         arrangements and contractual obligations since the filing of its Annual
         Report on Form 10-K for the year ended December 31, 2004.

ITEM 3.  QUANTITATIVE AND QUALITIVE DISCLOSURES ABOUT MARKET RISK

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

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

         The Company also manages risk from time to time with interest rate
         derivatives such as interest rate caps that would pay it investment
         income if interest rates rise above the level specified in the cap.
         These derivatives are only used to reduce risk and are not used for
         speculative purposes. At September 30, 2005, the Company did not have
         any interest rate caps.

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

         As a result of the coinsurance with funds withheld element of the
         Company's reinsurance of business of CLAC's US branch, it has recorded
         a derivative financial instrument to account for the different credit
         risks and other characteristics of the reinsurance receivable and the
         investment assets of CLAC that underlie that receivable. This
         derivative is carried at fair value and changes in fair value are
         included in net investment income as a non-cash charge or credit.
         Therefore, the Company's operating results are exposed to volatility,
         reflecting changes in the fair value of the underlying investment
         portfolio, which is exposed to interest rate, market and credit risk.
         As a result of this derivative, losses in the amounts of $8.5 million
         and $7.2 million, net of policyholder related amounts and deferred
         taxes, were included in net income for the three and nine-month periods
         ended September 30, 2005, respectively.

ITEM 4.  CONTROLS AND PROCEDURES

         Based on their evaluation as of September 30, 2005, the Chief Executive
         Officer and Chief Financial Officer have concluded that the Company's
         disclosure controls and procedures are effective at the reasonable
         assurance level in ensuring that information relating to the Company
         and its subsidiaries which is required to be disclosed in reports filed
         under the Securities Exchange Act of 1934 is (i) recorded, processed,
         summarized and reported in a timely manner; and is (ii) accumulated and
         communicated to the Company's senior management, including the
         President and Chief Executive Officer and the Executive Vice President
         and Chief Financial Officer, so that timely decisions may be made
         regarding disclosure.

         The Chief Executive Officer and Chief Financial Officer hereby confirm
         that no significant changes in the Company's internal control over
         financial reporting occurred during its most recent fiscal quarter that
         have materially affected, or are reasonably likely to materially
         affect, the registrant's internal control over financial reporting.

PART II - OTHER INFORMATION

ITEM 1.  LEGAL PROCEEDINGS

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


ITEM 6. EXHIBITS

         Index to Exhibits

<TABLE>
<CAPTION>

                 Exhibit Number           Title                                                                Page
                 ---------------------    ----------------------------------------------------------------     ---------
<S>                      <C>                   <C>                                                                <C>
                         31.1             Rule 13a-14(a)/15d-14(a) Certification                                  27
                         31.2             Rule 13a-14(a)/15d-14(a) Certification                                  28
                         32               18 U.S.C. 1350 Certification                                            29
</TABLE>

SIGNATURE

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

<TABLE>
<CAPTION>

         GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
<S>                                                                                                    <C> <C>
     By:     /s/Glen R. Derback                                                      Date:    November 10, 2005
             ----------------------------------------------------------------------           ---------------------------
             Glen R. Derback, Senior Vice President and Controller
             (Duly authorized Officer and Chief Accounting Officer)
</TABLE>