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

|   | 3BOR |
|--------|------|

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

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

| COLORADO                                                       |   | 84-0467907                              |
|----------------------------------------------------------------|--------|-----------------------------------------|
| (State or other jurisdiction of incorporation or organization) |   | (I.R.S. Employer Identification Number) |

| 8515 EAST ORCHARD ROAD, GREENWOOD VILLAGE, CO 80111        |
|------------------------------------------------------------|
| (Address of principal executive offices)                   |
|                                                       |
| (303) 737-3000                                             |
| (Registrant’s telephone number, including area code) |

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

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

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

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

| 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. |
|-------|-------------------------------------------------------------------------------------------------------------------------------------------|

----

|              |                  |                                                              |                                                       |          |
|-------------------|-----------------------|-------------------------------------------------------------------|------------------------------------------------------------|---------------|
| Table of Contents |
|              |                  |                                                              |                                                       |          |
|              |                  |                                                              |                                                       |          |
|              |                  |                                                              |                                                       |          |
|              |                  |                                                              |                                                       |          |
|              |                  |                                                              |                                                       | Page          |
|              |                  |                                                              |                                                       | Number        |
|              |                  |                                                              |                                                       |          |
| Part I            | Financial Information |   3                                                     |
|              |                  |                                                              |                                                       |          |
|              | Item 1                | Interim Financial Statements                                      |   3                                              |
|              |                  |                                                              |                                                       |          |
|              |                  | Condensed Consolidated Balance Sheets at September 30, 2009       |                                                       |
|              |                  |                                                              | (Unaudited) and December 31, 2008                          |   3 |
|              |                  |                                                              |                                                       |          |
|              |                  | Condensed Consolidated Statements of Income for the Three and     |                                                       |
|              |                  |                                                              | Nine Months Ended September 30, 2009 and 2008 (Unaudited)  |   5 |
|              |                  |                                                              |                                                       |          |
|              |                  | Condensed Consolidated Statements of Stockholder's Equity for the |                                                       |
|              |                  |                                                              | Year Ended December 31, 2008 and for the Nine Months Ended |          |
|              |                  |                                                              | September 30, 2009 (Unaudited)                             |   6 |
|              |                  |                                                              |                                                       |          |
|              |                  | Condensed Consolidated Statements of Cash Flows for the Nine      |                                                       |
|              |                  |                                                              | Months Ended September 30, 2009 and 2008 (Unaudited)       |   7 |
|              |                  |                                                              |                                                       |          |
|              |                  | Notes to Condensed Consolidated Financial Statements (Unaudited)  |   9                                              |
|              |                  |                                                              |                                                       |          |
|              | Item 2                | Management's Discussion and Analysis of Financial Condition       |                                                       |
|              |                  |                                                              | and Results of Operations                                  | 39            |
|              |                  |                                                              |                                                       |          |
|              | Item 3                | Quantitative and Qualitative Disclosures About Market Risk        | 54                                                         |
|              |                  |                                                              |                                                       |          |
|              | Item 4T               | Controls and Procedures                                           | 54                                                         |
|              |                  |                                                              |                                                       |          |
| Part II           | Other Information     | 54                                                                |
|              |                  |                                                              |                                                       |          |
|              | Item 1                | Legal Proceedings                                                 | 54                                                         |
|              |                  |                                                              |                                                       |          |
|              | Item 1A               | Risk Factors                                                      | 55                                                         |
|              |                  |                                                              |                                                       |          |
|              | Item 6                | Exhibits                                                          | 55                                                         |
|              |                  |                                                              |                                                       |          |
|              |                  | Signature                                                         | 55                                                         |

----

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

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

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY                 |   |
|-----------------------------------------------------------------|--------|
| Condensed Consolidated Balance Sheets                           |   |
| September 30, 2009 (Unaudited) and December 31, 2008            |   |
| (In Thousands, Except Share Amounts)                            |   |
|                                                            |   |
|                                                            |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |
|                                                            |   | September 30, |   |   | December 31, |   |
|                                                            |   | 2009 |   |   | 2008 |   |
| Assets                                                          |   |   |   |   |   |   |
| Investments:                                                    |   |   |   |   |   |   |
| Fixed maturities, available-for-sale, at fair value (amortized  |   |   |   |   |   |   |
| cost $13,982,521 and $13,394,675)                               |   | $ | 13,684,929 |   |   | $ | 11,973,536 |   |
| Fixed maturities, held for trading, at fair value (amortized    |   |   |   |   |   |   |   |   |
| cost $130,389 and $39,803)                                      |   |   | 136,310 |   |   |   | 38,834 |   |
| Mortgage loans on real estate (net of allowances of             |   |   |   |   |   |   |   |   |
| $8,682 and $8,834)                                              |   |   | 1,462,416 |   |   |   | 1,380,101 |   |
| Equity investments, available-for-sale, at fair value           |   |   |   |   |   |   |   |   |
| (cost $18,213 and $16,330)                                      |   |   | 23,421 |   |   |   | 17,790 |   |
| Policy loans                                                    |   |   | 4,002,827 |   |   |   | 3,979,094 |   |
| Short-term investments, available-for-sale                      |   |   |   |   |   |   |   |   |
| (cost approximates fair value)                                  |   |   | 605,657 |   |   |   | 366,370 |   |
| Limited partnership and limited liability corporation interests |   |   | 265,467 |   |   |   | 293,956 |   |
| Other investments                                               |   |   | 24,990 |   |   |   | 31,992 |   |
| Total investments                                               |   |   | 20,206,017 |   |   |   | 18,081,673 |   |
|                                                            |   |   |   |   |   |   |   |   |
| Other assets:                                                   |   |   |   |   |   |   |   |   |
| Cash                                                            |   |   | 191,171 |   |   |   | 28,352 |   |
| Reinsurance receivable                                          |   |   | 568,303 |   |   |   | 546,491 |   |
| Deferred acquisition costs and value of business acquired       |   |   | 487,120 |   |   |   | 714,031 |   |
| Investment income due and accrued                               |   |   | 190,091 |   |   |   | 145,775 |   |
| Premiums in course of collection                                |   |   | 4,123 |   |   |   | 8,309 |   |
| Deferred income taxes                                           |   |   | 242,428 |   |   |   | 577,799 |   |
| Collateral under securities lending agreements                  |   |   | 60,439 |   |   |   | 43,205 |   |
| Due from parent and affiliates                                  |   |   | 113,911 |   |   |   | 41,793 |   |
| Goodwill                                                        |   |   | 105,255 |   |   |   | 105,255 |   |
| Other intangible assets                                         |   |   | 30,680 |   |   |   | 33,824 |   |
| Other assets                                                    |   |   | 547,576 |   |   |   | 603,091 |   |
| Assets of discontinued operations                               |   |   | 101,656 |   |   |   | 124,089 |   |
| Separate account assets                                         |   |   | 18,278,383 |   |   |   | 15,121,943 |   |
| Total assets                                                    |   | $ | 41,127,153 |   |   | $ | 36,175,630 |   |
|                                                            |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |
|                                                            |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements.       |   |   |   |   |   | (Continued) |   |

----

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

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY           |   |
|-----------------------------------------------------------|--------|
| Condensed Consolidated Balance Sheets                     |   |
| September 30, 2009 (Unaudited) and December 31, 2008      |   |
| (In Thousands, Except Share Amounts)                      |   |
|                                                      |   |
|                                                      |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |
|                                                      |   | September 30, |   |   | December 31, |   |
|                                                      |   | 2009 |   |   | 2008 |   |
| Liabilities and stockholder's equity                      |   |   |   |   |   |   |
| Policy benefit liabilities:                               |   |   |   |   |   |   |
| Future policy benefits                                    |   | $ | 18,807,439 |   |   | $ | 18,105,648 |   |
| Policy and contract claims                                |   |   | 287,521 |   |   |   | 290,288 |   |
| Policyholders' funds                                      |   |   | 323,796 |   |   |   | 320,320 |   |
| Provision for policyholders' dividends                    |   |   | 70,046 |   |   |   | 70,700 |   |
| Undistributed earnings on participating business          |   |   | 3,636 |   |   |   | 1,614 |   |
| Total policy benefit liabilities                          |   |   | 19,492,438 |   |   |   | 18,788,570 |   |
|                                                      |   |   |   |   |   |   |   |   |
| General liabilities:                                      |   |   |   |   |   |   |   |   |
| Due to parent and affiliates                              |   |   | 555,260 |   |   |   | 533,870 |   |
| Repurchase agreements                                     |   |   | 612,270 |   |   |   | 202,079 |   |
| Commercial paper                                          |   |   | 98,483 |   |   |   | 97,167 |   |
| Payable under securities lending agreements               |   |   | 60,439 |   |   |   | 43,205 |   |
| Other liabilities                                         |   |   | 649,423 |   |   |   | 655,576 |   |
| Liabilities of discontinued operations                    |   |   | 101,656 |   |   |   | 124,089 |   |
| Separate account liabilities                              |   |   | 18,278,383 |   |   |   | 15,121,943 |   |
| Total liabilities                                         |   |   | 39,848,352 |   |   |   | 35,566,499 |   |
|                                                      |   |   |   |   |   |   |   |   |
| Commitments and contingencies (Note 14)                   |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
| Stockholder's equity:                                     |   |   |   |   |   |   |   |   |
| Preferred stock, $1 par value, 50,000,000 shares          |   |   |   |   |   |   |   |   |
| authorized; none issued and outstanding                   |   |   | - |   |   |   | - |   |
| Common stock, $1 par value, 50,000,000 shares             |   |   |   |   |   |   |   |   |
| authorized; 7,032,000 shares issued and outstanding       |   |   | 7,032 |   |   |   | 7,032 |   |
| Additional paid-in capital                                |   |   | 759,114 |   |   |   | 756,912 |   |
| Accumulated other comprehensive income (loss)             |   |   | (209,673 | ) |   |   | (762,673 | ) |
| Retained earnings                                         |   |   | 722,328 |   |   |   | 607,860 |   |
| Total stockholder's equity                                |   |   | 1,278,801 |   |   |   | 609,131 |   |
| Total liabilities and stockholder's equity                |   | $ | 41,127,153 |   |   | $ | 36,175,630 |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
|                                                      |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements. |   |   |   |   |   | (Concluded) |   |

----

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY                                                     |   |
|-----------------------------------------------------------------------------------------------------|--------|
| Condensed Consolidated Statements of Income                                                         |   |
| Three and Nine Months Ended September 30, 2009 and 2008                                             |   |
| (In Thousands)                                                                                      |   |
| (Unaudited)                                                                                         |   |
|                                                                                                |   |
|                                                                                                |   |
|                                                                                                |   |
|                                                                                                |   |
|                                                                                                |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |   |
|                                                                                                |   | 2009 |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
|                                                                                                |   |   |   |   | (Restated Note 1) |   |   |   |   |   | (Restated Note 1) |   |
| Revenues:                                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |
| Premium income, net of premiums ceded of $8,128, $4,974,$33,169 and $29,730                         |   | $ | 176,707 |   |   | $ | 163,391 |   |   | $ | 439,056 |   |   | $ | 416,819 |   |
| Fee income                                                                                          |   |   | 101,556 |   |   |   | 104,831 |   |   |   | 275,820 |   |   |   | 325,803 |   |
| Net investment income                                                                               |   |   | 301,424 |   |   |   | 268,878 |   |   |   | 855,806 |   |   |   | 804,954 |   |
| Realized investment gains (losses), net:                                                            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total other-than-temporary impairment losses                                                        |   |   | (4,694 | ) |   |   | (40,305 | ) |   |   | (8,106 | ) |   |   | (52,205 | ) |
| Other realized investment gains, net                                                                |   |   | 10,201 |   |   |   | 2,394 |   |   |   | 34,986 |   |   |   | 46,738 |   |
|  Total realized investment gains (losses), net                                                 |   |   | 5,507 |   |   |   | (37,911 | ) |   |   | 26,880 |   |   |   | (5,467 | ) |
| Total revenues                                                                                      |   |   | 585,194 |   |   |   | 499,189 |   |   |   | 1,597,562 |   |   |   | 1,542,109 |   |
| Benefits and expenses:                                                                              |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Life and other policy benefits, net of reinsurance recoveries of $6,605,$4,992, $37,821 and $23,801 |   |   | 125,982 |   |   |   | 153,931 |   |   |   | 442,027 |   |   |   | 452,353 |   |
| Increase (decrease) in future policy benefits                                                       |   |   | 104,090 |   |   |   | (33,326 | ) |   |   | 116,987 |   |   |   | (13,052 | ) |
| Interest paid or credited to contractholders                                                        |   |   | 144,411 |   |   |   | 130,891 |   |   |   | 412,742 |   |   |   | 384,351 |   |
| Provision (benefit) for policyholders' share of earnings on participating business (Note 3)         |   |   | 576 |   |   |   | 285 |   |   |   | 888 |   |   |   | (207,139 | ) |
| Dividends to policyholders                                                                          |   |   | 14,539 |   |   |   | 11,662 |   |   |   | 53,327 |   |   |   | 53,444 |   |
| Total benefits                                                                                      |   |   | 389,598 |   |   |   | 263,443 |   |   |   | 1,025,971 |   |   |   | 669,957 |   |
| General insurance expenses                                                                          |   |   | 105,340 |   |   |   | 94,278 |   |   |   | 311,513 |   |   |   | 308,806 |   |
| Amortization of deferred acquisition costs                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| and value of business acquired                                                                      |   |   | 15,232 |   |   |   | 11,088 |   |   |   | 51,374 |   |   |   | 63,676 |   |
| Interest expense                                                                                    |   |   | 9,365 |   |   |   | 9,896 |   |   |   | 28,164 |   |   |   | 30,039 |   |
| Total benefits and expenses, net                                                                    |   |   | 519,535 |   |   |   | 378,705 |   |   |   | 1,417,022 |   |   |   | 1,072,478 |   |
| Income from continuing operations before income taxes                                               |   |   | 65,659 |   |   |   | 120,484 |   |   |   | 180,540 |   |   |   | 469,631 |   |
| Income tax expense                                                                                  |   |   | 17,129 |   |   |   | 40,633 |   |   |   | 49,918 |   |   |   | 74,826 |   |
| Income from continuing operations                                                                   |   |   | 48,530 |   |   |   | 79,851 |   |   |   | 130,622 |   |   |   | 394,805 |   |
| Income from discontinued operations,net of income taxes of $ - , $ - , $ - ,and $386,497            |   |   | - |   |   |   | - |   |   |   | - |   |   |   | 655,370 |   |
| Net income                                                                                          |   | $ | 48,530 |   |   | $ | 79,851 |   |   | $ | 130,622 |   |   | $ | 1,050,175 |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements.                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY                                     |   |
|-------------------------------------------------------------------------------------|--------|
| Condensed Consolidated Statements of Stockholder's Equity                           |   |
| Year Ended December 31, 2008 and Nine Months Ended September 30, 2009 (Unaudited)   |   |
| (In Thousands)                                                                      |   |
|                                                                                |   |   |   |   |   |   |   | Accumulated Other |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   | Comprehensive Income (Loss) |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   | Common Stock |   |   | Additional Paid-in Capital |   |   | Unrealized Gains (Losses) on Securities |   |   | Employee Benefit Plan Adjustments |   |   | Retained Earnings |   |   | Total |   |
| Balances, January 1, 2008                                                           |   | $ | 7,032 |   |   | $ | 747,533 |   |   | $ | (5,687 | ) |   | $ | 4,169 |   |   | $ | 1,282,064 |   |   | $ | 2,035,111 |   |
| Net income                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,098,295 |   |   |   | 1,098,295 |   |
| Other comprehensive income (loss), net of income taxes:                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net change in unrealized gains (losses)                                             |   |   |   |   |   |   |   |   |   |   | (685,907 | ) |   |   |   |   |   |   |   |   |   |   | (685,907 | ) |
| Employee benefit plan adjustment                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (75,248 | ) |   |   |   |   |   |   | (75,248 | ) |
| Total comprehensive income                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 337,140 |   |
| Impact of adopting ASC section 715-20-65 "Defined Benefit                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Plans - Transition and Open Effective Date Information" measurement date provisions |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (206 | ) |   |   | (206 | ) |
| Dividends                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (1,772,293 | ) |   |   | (1,772,293 | ) |
| Capital contribution - stock-based compensation                                     |   |   |   |   |   |   | 5,123 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 5,123 |   |
| Income tax benefit on stock-based compensation                                      |   |   |   |   |   |   | 4,256 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 4,256 |   |
| Balances, December 31, 2008                                                         |   |   | 7,032 |   |   |   | 756,912 |   |   |   | (691,594 | ) |   |   | (71,079 | ) |   |   | 607,860 |   |   |   | 609,131 |   |
| Net income                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 130,622 |   |   |   | 130,622 |   |
| Other comprehensive income (loss), net of income taxes:                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-credit component of impairment losses on fixed maturities, available-for-sale   |   |   |   |   |   |   |   |   |   |   | 1,341 |   |   |   |   |   |   |   |   |   |   |   | 1,341 |   |
| Net change in unrealized gains (losses)                                             |   |   |   |   |   |   |   |   |   |   | 563,412 |   |   |   |   |   |   |   |   |   |   |   | 563,412 |   |
| Employee benefit plan adjustment                                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (3,225 | ) |   |   |   |   |   |   | (3,225 | ) |
| Total comprehensive income                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 692,150 |   |
| Impact of adopting ASC section 320-10-65 "Investments -                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Debt and Equity Securities - Transition and Open                                    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Effective Date Information" on available-for-sale securities                        |   |   |   |   |   |   |   |   |   |   | (8,528 | ) |   |   |   |   |   |   | 8,528 |   |   |   | - |   |
| Dividends                                                                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | (24,682 | ) |   |   | (24,682 | ) |
| Capital contribution - stock-based compensation                                     |   |   |   |   |   |   | 1,940 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 1,940 |   |
| Income tax benefit on stock-based compensation                                      |   |   |   |   |   |   | 262 |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 262 |   |
| Balances, September 30, 2009                                                        |   | $ | 7,032 |   |   | $ | 759,114 |   |   | $ | (135,369 | ) |   | $ | (74,304 | ) |   | $ | 722,328 |   |   | $ | 1,278,801 |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements.                           |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |

----

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY                                                             |   |
|-------------------------------------------------------------------------------------------------------------|--------|
| Condensed Consolidated Statements of Cash Flows                                                             |   |
| Nine Months Ended September 30, 2009 and 2008                                                               |   |
| (In Thousands)                                                                                              |   |
| (Unaudited)                                                                                                 |   |
|                                                                                                        |   |
|                                                                                                        |   |
|                                                                                                        |   | Nine Months Ended September 30, |   |
|                                                                                                        |   | 2009 |   |   | 2008 |   |
|                                                                                                        |   |   |   |   | (Restated Note 1) |   |
| Cash flows from operating activities:                                                                       |   |   |   |   |   |   |
| Net income                                                                                                  |   | $ | 130,622 |   |   | $ | 1,050,175 |   |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities:                 |   |   |   |   |   |   |   |   |
| Earnings allocated to participating policyholders                                                           |   |   | 888 |   |   |   | (207,139 | ) |
| Amortization of premiums / (accretion) of discounts on investments, net                                     |   |   | (47,122 | ) |   |   | (41,053 | ) |
| Net realized (gains) losses on investments                                                                  |   |   | (26,880 | ) |   |   | 12,152 |   |
| Net purchases of trading securities                                                                         |   |   | (92,377 | ) |   |   | 881 |   |
| Interest credited to contractholders                                                                        |   |   | 407,580 |   |   |   | 381,075 |   |
| Depreciation and amortization                                                                               |   |   | 65,153 |   |   |   | 80,527 |   |
| Deferral of acquisition costs                                                                               |   |   | (51,261 | ) |   |   | (49,569 | ) |
| Deferred income taxes                                                                                       |   |   | 51,954 |   |   |   | (10,609 | ) |
| Income from discontinued operations                                                                         |   |   | - |   |   |   | (620,366 | ) |
| Changes in assets and liabilities:                                                                          |   |   |   |   |   |   |   |   |
| Policy benefit liabilities                                                                                  |   |   | 30,040 |   |   |   | (137,070 | ) |
| Reinsurance receivable                                                                                      |   |   | 621 |   |   |   | (168,984 | ) |
| Accrued interest and other receivables                                                                      |   |   | (40,130 | ) |   |   | (1,163 | ) |
| Other, net                                                                                                  |   |   | (148,688 | ) |   |   | (188,688 | ) |
| Net cash provided by operating activities                                                                   |   |   | 280,400 |   |   |   | 100,169 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                        |   |   |   |   |   |   |   |   |
| Cash flows from investing activities:                                                                       |   |   |   |   |   |   |   |   |
| Proceeds from sales, maturities and redemptions of investments:                                             |   |   |   |   |   |   |   |   |
| Fixed maturities available-for-sale                                                                         |   |   | 2,954,686 |   |   |   | 3,037,820 |   |
| Mortgage loans on real estate                                                                               |   |   | 70,913 |   |   |   | 89,731 |   |
| Equity investments and other limited partnership interests                                                  |   |   | 38,304 |   |   |   | 35,302 |   |
| Purchases of investments:                                                                                   |   |   |   |   |   |   |   |   |
| Fixed maturities available-for-sale                                                                         |   |   | (3,035,029 | ) |   |   | (2,626,158 | ) |
| Mortgage loans on real estate                                                                               |   |   | (157,345 | ) |   |   | (168,215 | ) |
| Equity investments and other limited partnership interests                                                  |   |   | (11,691 | ) |   |   | (9,069 | ) |
| Net change in short-term investments                                                                        |   |   | (645,231 | ) |   |   | (205,865 | ) |
| Net change in repurchase agreements                                                                         |   |   | 410,191 |   |   |   | 189,772 |   |
| Other, net                                                                                                  |   |   | 98,961 |   |   |   | 11,333 |   |
| Proceeds from the disposition of Healthcare segment, net of cash disposed, direct expenses and income taxes |   |   | - |   |   |   | 1,323,972 |   |
| Net cash provided by (used in) investing activities                                                         |   |   | (276,241 | ) |   |   | 1,678,623 |   |
|                                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                        |   |   |   |   |   |   |   |   |
|                                                                                                        |   |   |   |   |   |   |   |   |
| See notes to condensed consolidated financial statements.                                                   |   |   |   |   |   | (Continued) |   |

----

| GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY |
|-------------------------------------------------|
| Condensed Consolidated Statements of Cash Flows |
| Nine Months Ended September 30, 2009 and 2008   |
| (In Thousands)                                  |
| (Unaudited)                                     |
|                                            |
|                                            |
|                                            |
|                                            |

|                                                                      |   | Nine Months Ended September 30, |       |
|---------------------------------------------------------------------------|--------|--------------------------------------|------------|
|                                                                      |   | 2009                                 |       |   | 2008 |   |
|                                                                      |   |                                 |       |   | (Restated Note 1) |   |
| Cash flows from financing activities:                                     |   |                                 |       |   |   |   |
| Contract deposits                                                         |   | $                                    | 1,425,316  |   |   | $ | 1,318,891 |   |
| Contract withdrawals                                                      |   |                                 | (1,209,724 | ) |   |   | (1,011,097 | ) |
| Change in due to parent and affiliates                                    |   |                                 | (50,728    | ) |   |   | (221,901 | ) |
| Dividends paid                                                            |   |                                 | (24,682    | ) |   |   | (1,738,751 | ) |
| Net commercial paper borrowings (repayments)                              |   |                                 | 1,316      |   |   |   | (28,399 | ) |
| Change in bank overdrafts                                                 |   |                                 | 16,900     |   |   |   | (110,883 | ) |
| Income tax benefit of stock option exercises                              |   |                                 | 262        |   |   |   | 671 |   |
| Net cash provided by (used in) financing activities                       |   |                                 | 158,660    |   |   |   | (1,791,469 | ) |
|                                                                      |   |                                 |       |   |   |   |   |   |
| Net increase (decrease) in cash                                           |   |                                 | 162,819    |   |   |   | (12,677 | ) |
| Cash, continuing and discontinued operations, beginning of period         |   |                                 | 28,352     |   |   |   | 65,436 |   |
| Cash, end of period                                                       |   | $                                    | 191,171    |   |   | $ | 52,759 |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
| Supplemental disclosures of cash flow information:                        |   |                                 |       |   |   |   |   |   |
| Net cash paid during the periods for:                                     |   |                                 |       |   |   |   |   |   |
| Income taxes                                                              |   | $                                    | 1,871      |   |   | $ | 294,540 |   |
| Income tax payments withheld and remitted to taxing authorities           |   |                                 | 43,217     |   |   |   | 43,452 |   |
| Interest                                                                  |   |                                 | 18,907     |   |   |   | 20,780 |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
| Non-cash investing and financing transactions during the periods:         |   |                                 |       |   |   |   |   |   |
| Share-based compensation expense                                          |   | $                                    | 1,940      |   |   | $ | 3,982 |   |
| Fair value of assets acquired in settlement of fixed maturity investments |   |                                 | -          |   |   |   | 5,958 |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
|                                                                      |   |                                 |       |   |   |   |   |   |
| See notes to condensed consolidated financial statements.                 |   |                                 |       |   |   | (Concluded) |   |

----

----

----

----

----

| Assets                     |   | September 30, 2009 |    |   | December 31, 2008 |   |
|----------------------------|--------|-------------------------|---------|--------|------------------------|--------|
| Reinsurance receivable     |   | $                       | 101,656 |   |                   | $      | 124,089 |   |
| Total assets               |   | $                       | 101,656 |   |                   | $      | 124,089 |   |
|                       |   |                    |    |   |                   |   |   |   |
| Liabilities                |   |                    |    |   |                   |   |   |   |
| Future policy benefits     |   | $                       | 57,335  |   |                   | $      | 39,776 |   |
| Policy and contract claims |   |                    | 44,321  |   |                   |   | 84,313 |   |
| Total liabilities          |   | $                       | 101,656 |   |                   | $      | 124,089 |   |

----

|                                                                                                         |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |   |
|--------------------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|--------|--------------------------------------|--------|
|                                                                                                         |   | 2009                                  |   |   | 2008                                 |   |   | 2009 |   |   | 2008 |   |
| Revenues from discontinued operations                                                                        |   | $                                     | -      |   |                                 | $      | - |   |   | $ | - |   |   | $ | 314,431 |   |
| Benefits and expenses from discontinued operations                                                           |   |                                  | -      |   |                                 |   | - |   |   |   | - |   |   |   | 343,166 |   |
| Income (loss) from discontinued operations,net of income tax expense (benefit) $ - , $ - , $ - and ($19,256) |   |                                  | -      |   |                                 |   | - |   |   |   | - |   |   |   | (28,735 | ) |
| Gain on sale of discontinued operations,net of income taxes of $ - , $ - , $ - and $405,753                  |   |                                  | -      |   |                                 |   | - |   |   |   | - |   |   |   | 684,105 |   |
| Income from discontinued operations                                                                          |   | $                                     | -      |   |                                 | $      | - |   |   | $ | - |   |   | $ | 655,370 |   |

|                                   |   | Severance, retention |    |
|----------------------------------------|--------|----------------------|---------|
|                                   |   | and other employee   |    |
|                                   |   | related costs        |    |
| Balance, April 1, 2008                 |   | $                    | -       |   |
| Amount incurred                        |   |                 | 49,202  |   |
| Adjustments to original estimates, net |   |                 | (6,268  | ) |
| Cash payments and other settlements    |   |                 | (30,222 | ) |
| Balance, December 31, 2008             |   |                 | 12,712  |   |
| Cash payments and other settlements    |   |                 | (11,583 | ) |
| Other adjustments                      |   |                 | 529     |   |
| Balance, September 30, 2009            |   | $                    | 1,658   |   |

|                   |   | September 30, 2009 |      |   | December 31, 2008 |   |
|------------------------|--------|--------------------|-----------|--------|-------------------|--------|
| Reinsurance receivable |   | $                  | 449,230   |   |              | $      | 425,369 |   |
| Future policy benefits |   |               | 2,339,646 |   |              |   | 2,393,013 |   |

----

|                                                                                             |   | Three Months Ended September 30, |   |   | Nine Months Ended September 30, |   |
|--------------------------------------------------------------------------------------------------|--------|---------------------------------------|--------|--------|--------------------------------------|--------|
|                                                                                             |   | 2009                                  |   |   | 2008                                 |   |   | 2009 |   |   | 2008 |   |
| Premium income, net of related party premiums ceded of $178, $197, $3,138 and $3,599             |   | $                                     | 36,799 |   |                                 | $      | 39,377 |   |   | $ | 106,653 |   |   | $ | 115,782 |   |
| Life and other policy benefits, net of reinsurance recoveries of $289, $3,052, $6,961 and $6,335 |   |                                  | 34,451 |   |                                 |   | 29,703 |   |   |   | 88,200 |   |   |   | 86,068 |   |
| Increase (decrease) in future policy benefits                                                    |   |                                  | 3,547  |   |                                 |   | (26,552 | ) |   |   | (7,868 | ) |   |   | (33,947 | ) |

----

|                                                 |   | September 30, 2009 |       |
|------------------------------------------------------|--------|--------------------|------------|
|                                                 |   |               |       |   | Gross |   |   | Gross |   |   | Estimated |   |   |   |   |
|                                                 |   | Amortized          |       |   | unrealized |   |   | unrealized |   |   | fair value and |   |   | OTTI included |   |
| Fixed maturities:                                    |   | cost               |       |   | gains |   |   | losses |   |   | carrying value |   |   | in AOCI |   |
|                                                 |   |               |       |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government direct obligations and U.S. agencies |   | $                  | 2,059,937  |   |   | $ | 91,294 |   |   | $ | 3,584 |   |   | $ | 2,147,647 |   |   | $ | - |   |
| Obligations of U.S. states and their subdivisions    |   |               | 1,192,414  |   |   |   | 124,825 |   |   |   | 80 |   |   |   | 1,317,159 |   |   |   | - |   |
|   Foreign governments                           |   |               | 466        |   |   |   | 5 |   |   |   | - |   |   |   | 471 |   |   |   | - |   |
|   Corporate debt securities                     |   |               | 6,690,144  |   |   |   | 337,744 |   |   |   | 244,131 |   |   |   | 6,783,757 |   |   |   | 11,056 |   |
|   Asset-backed securities                       |   |               | 2,393,432  |   |   |   | 2,823 |   |   |   | 502,297 |   |   |   | 1,893,958 |   |   |   | - |   |
| Residential mortgage-backed securities               |   |               | 866,559    |   |   |   | 4,859 |   |   |   | 74,518 |   |   |   | 796,900 |   |   |   | - |   |
| Commercial mortgage-backed securities                |   |               | 720,085    |   |   |   | 8,118 |   |   |   | 39,175 |   |   |   | 689,028 |   |   |   | - |   |
|   Collateralized debt obligations               |   |               | 59,484     |   |   |   | 30 |   |   |   | 3,505 |   |   |   | 56,009 |   |   |   | - |   |
|   Total fixed maturities                        |   | $                  | 13,982,521 |   |   | $ | 569,698 |   |   | $ | 867,290 |   |   | $ | 13,684,929 |   |   | $ | 11,056 |   |

|   Equity investments:      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|   Consumer products        |   | $      | 4      |   |   | $      | 54     |   |   | $      | 2      |   |   | $      | 56     |   |   | $ | - |   |
|   Equity mutual funds      |   |   | 15,062 |   |   |   | 5,065  |   |   |   | 496    |   |   |   | 19,631 |   |   |   | - |   |
|   Airline industry         |   |   | 3,147  |   |   |   | 838    |   |   |   | 251    |   |   |   | 3,734  |   |   |   | - |   |
|   Total equity investments |   | $      | 18,213 |   |   | $      | 5,957  |   |   | $      | 749    |   |   | $      | 23,421 |   |   | $ | - |   |

----

|                                                 |   | December 31, 2008 |       |
|------------------------------------------------------|--------|-------------------|------------|
|                                                 |   |              |       |   | Gross |   |   | Gross |   |   | Estimated |   |
|                                                 |   | Amortized         |       |   | unrealized |   |   | unrealized |   |   | fair value and |   |
| Fixed Maturities:                                    |   | cost              |       |   | gains |   |   | losses |   |   | carrying value |   |
|                                                 |   |              |       |   |   |   |   |   |   |   |
| U.S. government direct obligations and U.S. agencies |   | $                 | 2,356,143  |   |   | $ | 81,084 |   |   | $ | 6,601 |   |   | $ | 2,430,626 |   |
| Obligations of U.S. states and their subdivisions    |   |              | 1,173,185  |   |   |   | 10,026 |   |   |   | 34,443 |   |   |   | 1,148,768 |   |
|   Foreign governments                           |   |              | 1,140      |   |   |   | 12 |   |   |   | - |   |   |   | 1,152 |   |
|   Corporate debt securities                     |   |              | 5,589,524  |   |   |   | 51,728 |   |   |   | 615,647 |   |   |   | 5,025,605 |   |
|   Asset-backed securities                       |   |              | 2,521,704  |   |   |   | 960 |   |   |   | 667,006 |   |   |   | 1,855,658 |   |
| Residential mortgage-backed securities               |   |              | 883,250    |   |   |   | 5,114 |   |   |   | 127,042 |   |   |   | 761,322 |   |
| Commercial mortgage-backed securities                |   |              | 792,083    |   |   |   | 109 |   |   |   | 110,919 |   |   |   | 681,273 |   |
|   Collateralized debt obligations               |   |              | 77,646     |   |   |   | - |   |   |   | 8,514 |   |   |   | 69,132 |   |
|   Total fixed maturities                        |   | $                 | 13,394,675 |   |   | $ | 149,033 |   |   | $ | 1,570,172 |   |   | $ | 11,973,536 |   |

| Equity investments:             |   |   |   |   |   |   |   |   |   |   |   |   |
|---------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|
|   Consumer products        |   | $      | 4      |   |   | $      | 52     |   |   | $      | 2      |   |   | $ | 54 |   |
|   Equity mutual funds      |   |   | 14,563 |   |   |   | 2,161  |   |   |   | 962    |   |   |   | 15,762 |   |
|   Airline industry         |   |   | 1,763  |   |   |   | 211    |   |   |   | -      |   |   |   | 1,974 |   |
|   Total equity investments |   | $      | 16,330 |   |   | $      | 2,424  |   |   | $      | 964    |   |   | $ | 17,790 |   |

|                                        |   | September 30, 2009 |       |
|---------------------------------------------|--------|--------------------|------------|
|                                        |   | Amortized cost     |       |   | Estimated fair value |   |
| Maturing in one year or less                |   | $                  | 641,396    |   |   | $ | 664,979 |   |
| Maturing after one year through five years  |   |               | 2,735,814  |   |   |   | 2,877,632 |   |
| Maturing after five years through ten years |   |               | 2,675,563  |   |   |   | 2,863,172 |   |
| Maturing after ten years                    |   |               | 1,986,206  |   |   |   | 1,856,343 |   |
| Mortgage-backed and asset-backed securities |   |               | 5,943,542  |   |   |   | 5,422,803 |   |
|                                        |   | $                  | 13,982,521 |   |   | $ | 13,684,929 |   |

----

|                             |   | Three Months Ended September 30, |    |   | Nine Months Ended September 30, |   |
|----------------------------------|--------|---------------------------------------|---------|--------|--------------------------------------|--------|
|                             |   | 2009                                  |    |   | 2008                                 |   |   | 2009 |   |   | 2008 |   |
| Proceeds from sales              |   | $                                     | 644,773 |   |                                 | $      | 449,208 |   |   | $ | 1,900,142 |   |   | $ | 1,938,919 |   |
| Gross realized gains from sales  |   |                                  | 16,048  |   |                                 |   | 4,674 |   |   |   | 34,757 |   |   |   | 40,739 |   |
| Gross realized losses from sales |   |                                  | 215     |   |                                 |   | 1,348 |   |   |   | 478 |   |   |   | 1,456 |   |

| Derivative financial instruments |
|----------------------------------|

----

|                             |   | September 30, 2009 |
|----------------------------------|--------|--------------------|
|                             |   | Notional amount    |   |   | Number of Contacts |   |   | Strike/Swap rate |   | Maturity |
| Interest rate swaps              |   | $                  | 217,500 |   |   |   | 18 |   |   |   | 0.16%-0.63 | % | February 2012-February 2045 |
| Foreign currency contracts       |   |               | 30,000 |   |   |   | 1 |   |   |   | N/A |   | December 2016 |
| Futures:                         |   |               |   |   |   |   |   |   |   |   |   |   |   |
|  Thirty year U.S. Treasury: |   |               |   |   |   |   |   |   |   |   |   |   |   |
|  Short position             |   |               | 118,500 |   |   |   | 1,185 |   |   |   | N/A |   | December 2009 |
| Ten year U.S. Treasury:          |   |               |   |   |   |   |   |   |   |   |   |   |   |
|  Short position             |   |               | 69,000 |   |   |   | 690 |   |   |   | N/A |   | December 2009 |
| Five year U.S. Treasury:         |   |               |   |   |   |   |   |   |   |   |   |   |   |
|  Short position             |   |               | 28,700 |   |   |   | 287 |   |   |   | N/A |   | December 2009 |

|                                 |   | Gain (loss) recognized in AOCI on derivatives (Effective portion) |   |   | Gain (loss) reclassified from AOCI into income (effective portion) |   | Gain (loss) recognized in income on derivatives (Ineffective portion and amount excluded from effectiveness testing) |
|--------------------------------------|--------|-------------------------------------------------------------------|--------|--------|--------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|
|                                 |   | Three months ended September 30, 2009                             |   |   | Three months endedSeptember 30, 2009                               |   | Income statementlocation                                                                                             |   | Three months endedSeptember 30, 2009 |   | Incomestatementlocation |
| Cash flow hedges:                    |   |                                                              |   |   |                                                               |   |                                                                                                                 |   |   |   |   |
| Interest rate swaps                  |   | $                                                                 | 8,658  |   |                                                               | $      | 136                                                                                                                  |   | (A) |   | $ | 19 |   | (A) |
| Foreign exchange contracts           |   |                                                              | (536   | )      |                                                               |   | -                                                                                                                    |   |   |   |   | - |   |   |
| Interest rate futures                |   |                                                              | (498   | )      |                                                               |   | 13                                                                                                                   |   | (A) |   |   | - |   |   |
| Total                                |   | $                                                                 | 7,624  |   |                                                               | $      | 149                                                                                                                  |   |   |   | $ | 19 |   |   |
|                                 |   |                                                              |   |   |                                                               |   |                                                                                                                 |   |   |   |   |   |   |   |
| (A)  Net investment income |   |                                                              |   |   |                                                               |   |                                                                                                                 |   |   |   |   |   |   |   |

----

|                                 |   | Gain (loss) recognized in AOCI on derivatives (Effective portion) |    |   | Gain (loss) reclassified from AOCI into income (effective portion) |   | Gain (loss) recognized in income on derivatives (Ineffective portion and amount excluded from effectiveness testing) |
|--------------------------------------|--------|-------------------------------------------------------------------|---------|--------|--------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------|
|                                 |   |                                                              |    |   |                                                               |   |                                                                                                                 |   |   |   |   |
|                                 |   | Nine months ended September 30, 2009                              |    |   | Nine months ended September 30, 2009                               |   | Income statement location                                                                                            |   | Nine months ended September 30, 2009 |   | Income statement location |
| Cash flow hedges:                    |   |                                                              |    |   |                                                               |   |                                                                                                                 |   |   |   |   |
| Interest rate swaps                  |   | $                                                                 | (40,570 | )      |                                                               | $      | 340                                                                                                                  |   | (A) |   | $ | 43 |   | (A) |
| Foreign exchange contracts           |   |                                                              | (6,230  | )      |                                                               |   | -                                                                                                                    |   |   |   |   | - |   |   |
| Interest rate futures                |   |                                                              | (498    | )      |                                                               |   | 40                                                                                                                   |   | (A) |   |   | - |   |   |
| Total                                |   | $                                                                 | (47,298 | )      |                                                               | $      | 380                                                                                                                  |   |   |   | $ | 43 |   |   |
|                                 |   |                                                              |    |   |                                                               |   |                                                                                                                 |   |   |   |   |   |   |   |
| (A)  Net investment income |   |                                                              |    |   |                                                               |   |                                                                                                                 |   |   |   |   |   |   |   |

|                                                   |   | Gain (loss) recognized in net income on derivatives |   | Gain (loss) recognized in net income on hedged assets |
|--------------------------------------------------------|--------|-----------------------------------------------------|--------|-------------------------------------------------------|
|                                                   |   |                                                |   |                                                  |   |   |   |   |
|                                                   |   | Three months ended September 30, 2009               |   | Income statement location                             |   | Three months ended September 30, 2009 |   | Income statement location |
| Fair value hedges:                                     |   |                                                |   |                                                  |   |   |   |   |
| Interest rate futures                                  |   | $                                                   | (418   | )                                                     | (A) |   | $ | - |   |   |
| Interest rate futures                                  |   |                                                | (1,246 | )                                                     | (B) |   |   | - |   |   |
| Items hedged in interest rate futures                  |   |                                                | -      |                                                  |   |   |   | 1,946 |   | (A) |
| Total                                                  |   | $                                                   | (1,664 | )                                                     |   |   | $ | 1,946 |   |   |
|                                                   |   |                                                |   |                                                  |   |   |   |   |   |   |
| (A)  Net investment income                   |   |                                                |   |                                                  |   |   |   |   |   |   |
| (B)  Realized investment gains (losses), net |   |                                                |   |                                                  |   |   |   |   |   |   |

|                                                   |   | Gain (loss) recognized in net income on derivatives |   | Gain (loss) recognized in net income on hedged assets |
|--------------------------------------------------------|--------|-----------------------------------------------------|--------|-------------------------------------------------------|
|                                                   |   | Nine months ended September 30, 2009                |   | Income statement location                             |   | Nine months ended September 30, 2009 |   | Income statement location |
| Fair value hedges:                                     |   |                                                |   |                                                  |   |   |   |   |
| Interest rate futures                                  |   | $                                                   | 3,769  |                                                  | (A) |   | $ | - |   |   |
| Interest rate futures                                  |   |                                                | (282   | )                                                     | (B) |   |   | - |   |   |
| Items hedged in interest rate futures                  |   |                                                | -      |                                                  |   |   |   | (3,339 | ) | (A) |
| Total                                                  |   | $                                                   | 3,487  |                                                  |   |   | $ | (3,339 | ) |   |
|                                                   |   |                                                |   |                                                  |   |   |   |   |   |   |
| (A)  Net investment income                   |   |                                                |   |                                                  |   |   |   |   |   |   |
| (B)  Realized investment gains (losses), net |   |                                                |   |                                                  |   |   |   |   |   |   |

|                                                   |   | Gain (loss) recognized in net income on derivatives |   | Gain (loss) recognized in net income on hedged assets |
|--------------------------------------------------------|--------|-----------------------------------------------------|--------|-------------------------------------------------------|
|                                                   |   | Three months ended September 30, 2009               |   | Income statement location                             |   | Three months ended September 30, 2009 |   | Income statement location |
| Derivatives not designated as hedging                  |   |                                                |   |                                                  |   |   |   |   |
| instruments:                                           |   |                                                |   |                                                  |   |   |   |   |
| Interest rate futures                                  |   | $                                                   | (1,459 | )                                                     | (A) |   | $ | - |   |   |
| Interest rate futures                                  |   |                                                | (4,913 | )                                                     | (B) |   |   | - |   |   |
| Total                                                  |   | $                                                   | (6,372 | )                                                     |   |   | $ | - |   |   |
|                                                   |   |                                                |   |                                                  |   |   |   |   |   |   |
| (A)  Net investment income                   |   |                                                |   |                                                  |   |   |   |   |   |   |
| (B)  Realized investment gains (losses), net |   |                                                |   |                                                  |   |   |   |   |   |   |

----

|                                                   |   | Gain (loss) recognized in net income on derivatives |   | Gain (loss) recognized in net income on hedged assets |
|--------------------------------------------------------|--------|-----------------------------------------------------|--------|-------------------------------------------------------|
|                                                   |   | Nine months ended September 30, 2009                |   | Income statement location                             |   | Nine months ended September 30, 2009 |   | Income statemenlocation |
| Derivatives not designated as hedging instruments:     |   |                                                |   |                                                  |   |   |   |   |
| Interest rate futures                                  |   | $                                                   | (3,615 | )                                                     | (A) |   | $ | - |   |   |
| Interest rate futures                                  |   |                                                | 612    |                                                  | (B) |   |   | - |   |   |
| Total                                                  |   | $                                                   | (3,003 | )                                                     |   |   | $ | - |   |   |
|                                                   |   |                                                |   |                                                  |   |   |   |   |   |   |
| (A)  Net investment income                   |   |                                                |   |                                                  |   |   |   |   |   |   |
| (B)  Realized investment gains (losses), net |   |                                                |   |                                                  |   |   |   |   |   |   |

|                                           |   | Asset derivatives  |   | Liability derivatives |
|------------------------------------------------|--------|--------------------|--------|-----------------------|
|                                           |   | September 30, 2009 |   | September 30, 2009    |
|                                           |   |               |   | Balance sheet         |   |   |   | Balance sheet |
|                                           |   | Fair value         |   | location              |   | Fair value |   | location |
| Derivatives designated as hedging instruments: |   |               |   |                  |   |   |   |   |
| Interest rate swaps                            |   | $                  | 33,278 |                  | (A) |   | $ | - |   |   |
| Foreign exchange contracts                     |   |               | -      |                  |   |   |   | 4,213 |   | (B) |
| Total                                          |   | $                  | 33,278 |                  |   |   | $ | 4,213 |   |   |
|                                           |   |               |   |                  |   |   |   |   |   |   |
| (A)  Other assets                    |   |               |   |                  |   |   |   |   |   |   |
| (B)  Other liabilities               |   |               |   |                  |   |   |   |   |   |   |

----

----

|                                                      |   | September 30, 2009      |    |
|-----------------------------------------------------------|--------|-------------------------|---------|
|                                                      |   | Less than twelve months |    |   | Twelve months or longer |   |   | Total |   |
|                                                      |   | Estimated               |    |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |
| Fixed maturities:                                         |   | fair value              |    |   | loss and OTTI |   |   | fair value |   |   | loss and OTTI |   |   | fair value |   |   | loss and OTTI |   |
|                                                      |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government direct obligations and U.S. agencies      |   | $                       | 44,416  |   |   | $ | 3,302 |   |   | $ | 28,665 |   |   | $ | 282 |   |   | $ | 73,081 |   |   | $ | 3,584 |   |
| Obligations of U.S. states and their subdivisions         |   |                    | 8,703   |   |   |   | 78 |   |   |   | 608 |   |   |   | 2 |   |   |   | 9,311 |   |   |   | 80 |   |
|  Corporate debt securities                           |   |                    | 288,948 |   |   |   | 44,117 |   |   |   | 1,134,845 |   |   |   | 200,014 |   |   |   | 1,423,793 |   |   |   | 244,131 |   |
|  Asset-backed securities                             |   |                    | 150,848 |   |   |   | 75,001 |   |   |   | 1,559,562 |   |   |   | 427,296 |   |   |   | 1,710,410 |   |   |   | 502,297 |   |
| Residential mortgage-backed securities                    |   |                    | 52,306  |   |   |   | 1,991 |   |   |   | 596,919 |   |   |   | 72,527 |   |   |   | 649,225 |   |   |   | 74,518 |   |
| Commercial mortgage-backed securities                     |   |                    | -       |   |   |   | - |   |   |   | 322,787 |   |   |   | 39,175 |   |   |   | 322,787 |   |   |   | 39,175 |   |
|  Collateralized debt obligations                     |   |                    | 2,829   |   |   |   | 663 |   |   |   | 51,250 |   |   |   | 2,842 |   |   |   | 54,079 |   |   |   | 3,505 |   |
|  Total fixed maturities                              |   | $                       | 548,050 |   |   | $ | 125,152 |   |   | $ | 3,694,636 |   |   | $ | 742,138 |   |   | $ | 4,242,686 |   |   | $ | 867,290 |   |
|                                                      |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Equity investments:                                 |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Consumer products                                   |   | $                       | -       |   |   | $ | - |   |   | $ | 2 |   |   | $ | 2 |   |   | $ | 2 |   |   | $ | 2 |   |
|  Equity mutual funds                                 |   |                    | -       |   |   |   | - |   |   |   | 2,327 |   |   |   | 496 |   |   |   | 2,327 |   |   |   | 496 |   |
|  Airline industry                                    |   |                    | 1,054   |   |   |   | 251 |   |   |   | - |   |   |   | - |   |   |   | 1,054 |   |   |   | 251 |   |
|  Total equity investments                            |   | $                       | 1,054   |   |   | $ | 251 |   |   | $ | 2,329 |   |   | $ | 498 |   |   | $ | 3,383 |   |   | $ | 749 |   |
|                                                      |   |                    |    |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total number of securities in an unrealized loss position |   |                    |    |   |   |   | 106 |   |   |   |   |   |   |   | 375 |   |   |   |   |   |   |   | 481 |   |

|                                                      |   | December 31, 2008       |      |
|-----------------------------------------------------------|--------|-------------------------|-----------|
|                                                      |   | Less than twelve months |      |   | Twelve months or longer |   |   | Total |   |
|                                                      |   | Estimated               |      |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |   | Estimated |   |   | Unrealized |   |
| Fixed maturities:                                         |   | fair value              |      |   | loss |   |   | fair value |   |   | loss |   |   | fair value |   |   | loss |   |
|                                                      |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government direct obligations and U.S. agencies      |   | $                       | 41,965    |   |   | $ | 2,042 |   |   | $ | 157,062 |   |   | $ | 4,559 |   |   | $ | 199,027 |   |   | $ | 6,601 |   |
| Obligations of U.S. states and their subdivisions         |   |                    | 662,723   |   |   |   | 28,728 |   |   |   | 65,697 |   |   |   | 5,715 |   |   |   | 728,420 |   |   |   | 34,443 |   |
|  Corporate debt securities                           |   |                    | 2,271,214 |   |   |   | 213,400 |   |   |   | 1,556,161 |   |   |   | 402,247 |   |   |   | 3,827,375 |   |   |   | 615,647 |   |
|  Asset-backed securities                             |   |                    | 500,923   |   |   |   | 116,651 |   |   |   | 1,317,953 |   |   |   | 550,355 |   |   |   | 1,818,876 |   |   |   | 667,006 |   |
| Residential mortgage-backed securities                    |   |                    | 309,373   |   |   |   | 48,668 |   |   |   | 334,562 |   |   |   | 78,374 |   |   |   | 643,935 |   |   |   | 127,042 |   |
| Commercial mortgage-backed securities                     |   |                    | 300,880   |   |   |   | 35,332 |   |   |   | 349,646 |   |   |   | 75,587 |   |   |   | 650,526 |   |   |   | 110,919 |   |
|  Collateralized debt obligations                     |   |                    | 32,234    |   |   |   | 4,964 |   |   |   | 36,686 |   |   |   | 3,550 |   |   |   | 68,920 |   |   |   | 8,514 |   |
|  Total fixed maturities                              |   | $                       | 4,119,312 |   |   | $ | 449,785 |   |   | $ | 3,817,767 |   |   | $ | 1,120,387 |   |   | $ | 7,937,079 |   |   | $ | 1,570,172 |   |
|                                                      |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Equity investments:                                 |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
|  Consumer products                                   |   | $                       | 2         |   |   | $ | 2 |   |   | $ | - |   |   | $ | - |   |   | $ | 2 |   |   | $ | 2 |   |
|  Equity mutual funds                                 |   |                    | 2,449     |   |   |   | 962 |   |   |   | - |   |   |   | - |   |   |   | 2,449 |   |   |   | 962 |   |
|  Total equity investments                            |   | $                       | 2,451     |   |   | $ | 964 |   |   | $ | - |   |   | $ | - |   |   | $ | 2,451 |   |   | $ | 964 |   |
|                                                      |   |                    |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total number of securities in an unrealized loss position |   |                    |      |   |   |   | 1,956 |   |   |   |   |   |   |   | 571 |   |   |   |   |   |   |   | 2,527 |   |

----

| Sector            |   | September 30, 2009 |   | December 31, 2008 |
|-------------------|--------|--------------------|--------|-------------------|
| Finance           |   | 82%                |   | 51%               |
| Utility           |   | 7%                 |   | 20%               |
| Natural resources |   | 4%                 |   | 9%                |
| Consumer          |   | 3%                 |   | 8%                |
| Transportation    |   | 2%                 |   | 4%                |
| Other             |   | 2%                 |   | 8%                |
|              |   | 100%               |   | 100%              |

----

| Increase in amortized cost of fixed maturity available-for-sale securities |   | $      | 16,680 |   |
|----------------------------------------------------------------------------|--------|--------|--------|--------|
| Change in deferred acquisition costs and value of business acquired        |   |   | (3,560 | )      |
| Income tax                                                                 |   |   | (4,592 | )      |
| Net cumulative effect                                                      |   | $      | 8,528  |   |

| Bifurcated credit loss balance, April 1, 2009                         |   | $      | 43,871  |   |
|-----------------------------------------------------------------------|--------|--------|---------|--------|
| Non-credit losses reclassified out of retained earnings into AOCI (A) |   |   | (16,680 | )      |
| Bifurcated credit loss balance, September 30, 2009                    |   | $      | 27,191  |   |
|                                                                  |   |   |    |   |
| (A) Related to the adoption of ASC section 320-10-65                  |   |   |    |   |

----

|                                           |   | September 30, 2009 |       |   | December 31, 2008 |   |
|------------------------------------------------|--------|--------------------|------------|--------|-------------------|--------|
|                                           |   | Carrying           |       |   | Estimated         |   |   | Carrying |   |   | Estimated |   |
| Assets                                         |   | amount             |       |   | fair value        |   |   | amount |   |   | fair value |   |
| Fixed maturities and short-term investments    |   | $                  | 14,426,896 |   |              | $      | 14,426,896 |   |   | $ | 12,378,740 |   |   | $ | 12,378,740 |   |
|  Mortgage loans on real estate            |   |               | 1,462,416  |   |              |   | 1,443,289 |   |   |   | 1,380,101 |   |   |   | 1,373,015 |   |
|  Equity investments                       |   |               | 23,421     |   |              |   | 23,421 |   |   |   | 17,790 |   |   |   | 17,790 |   |
|  Policy loans                             |   |               | 4,002,827  |   |              |   | 4,002,827 |   |   |   | 3,979,094 |   |   |   | 3,979,094 |   |
|  Other investments                        |   |               | 24,990     |   |              |   | 50,495 |   |   |   | 31,992 |   |   |   | 58,600 |   |
|  Derivative instruments                   |   |               | 33,278     |   |              |   | 33,278 |   |   |   | 92,713 |   |   |   | 92,713 |   |
| Collateral under securities lending agreements |   |               | 60,439     |   |              |   | 60,439 |   |   |   | 43,205 |   |   |   | 43,205 |   |
|  Reinsurance receivable                   |   |               | 7,318      |   |              |   | 7,318 |   |   |   | 8,144 |   |   |   | 8,144 |   |
|  Separate account assets                  |   |               | 18,278,383 |   |              |   | 18,278,383 |   |   |   | 15,121,943 |   |   |   | 15,121,943 |   |

|                                                 |   | September 30, 2009 |       |   | December 31, 2008 |   |
|------------------------------------------------------|--------|--------------------|------------|--------|-------------------|--------|
|                                                 |   | Carrying           |       |   | Estimated         |   |   | Carrying |   |   | Estimated |   |
| Liabilities                                          |   | amount             |       |   | fair value        |   |   | amount |   |   | fair value |   |
| Annuity contract reserves without life contingencies |   | $                  | 7,119,138  |   |              | $      | 7,165,558 |   |   | $ | 6,736,101 |   |   | $ | 6,176,405 |   |
|  Policyholders' funds                           |   |               | 323,796    |   |              |   | 323,796 |   |   |   | 320,320 |   |   |   | 320,320 |   |
|  Repurchase agreements                          |   |               | 612,270    |   |              |   | 612,270 |   |   |   | 202,079 |   |   |   | 202,079 |   |
|  Commercial paper                               |   |               | 98,483     |   |              |   | 98,483 |   |   |   | 97,167 |   |   |   | 97,167 |   |
| Payable under securities lending agreements          |   |               | 60,439     |   |              |   | 60,439 |   |   |   | 43,205 |   |   |   | 43,205 |   |
|  Derivative instruments                         |   |               | 4,213      |   |              |   | 4,213 |   |   |   | - |   |   |   | - |   |
|  Notes payable                                  |   |               | 541,573    |   |              |   | 541,573 |   |   |   | 532,307 |   |   |   | 532,307 |   |
|  Separate account liabilities                   |   |               | 18,278,383 |   |              |   | 18,278,383 |   |   |   | 15,121,943 |   |   |   | 15,121,943 |   |

----

----

----

|                                                                                                             |   | Assets and Liabilities Measured at Fair Value on a Recurring Basis |       |
|------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------|------------|
|                                                                                                             |   | September 30, 2009                                                 |       |
|                                                                                                             |   | Quoted prices                                                      |       |   | Significant |   |   |   |   |   |   |   |
|                                                                                                             |   | in active                                                          |       |   | other |   |   | Significant |   |   |   |   |
|                                                                                                             |   | markets for                                                        |       |   | observable |   |   | unobservable |   |   |   |   |
|                                                                                                             |   | identical assets                                                   |       |   | inputs |   |   | inputs |   |   |   |   |
| Assets                                                                                                           |   | (Level 1)                                                          |       |   | (Level 2) |   |   | (Level 3) |   |   | Total |   |
| Fixed maturities, available-for-sale:                                                                            |   |                                                               |       |   |   |   |   |   |   |   |   |   |
| U.S. government direct obligations and U.S. agencies                                                             |   | $                                                                  | -          |   |   | $ | 2,146,263 |   |   | $ | 1,384 |   |   | $ | 2,147,647 |   |
| Obligations of U.S. states and their subdivisions                                                                |   |                                                               | -          |   |   |   | 1,317,159 |   |   |   | - |   |   |   | 1,317,159 |   |
| Foreign governments                                                                                              |   |                                                               | -          |   |   |   | 471 |   |   |   | - |   |   |   | 471 |   |
| Corporate debt securities                                                                                        |   |                                                               | -          |   |   |   | 6,526,246 |   |   |   | 257,511 |   |   |   | 6,783,757 |   |
| Asset-backed securities                                                                                          |   |                                                               | -          |   |   |   | 1,468,270 |   |   |   | 425,688 |   |   |   | 1,893,958 |   |
| Residential mortgage-backed securities                                                                           |   |                                                               | -          |   |   |   | 796,900 |   |   |   | - |   |   |   | 796,900 |   |
| Commercial mortgage-backed securities                                                                            |   |                                                               | -          |   |   |   | 635,369 |   |   |   | 53,659 |   |   |   | 689,028 |   |
| Collateralized debt obligations                                                                                  |   |                                                               | -          |   |   |   | 36,440 |   |   |   | 19,569 |   |   |   | 56,009 |   |
| Total fixed maturities available-for-sale                                                                        |   |                                                               | -          |   |   |   | 12,927,118 |   |   |   | 757,811 |   |   |   | 13,684,929 |   |
| Fixed maturities, held for trading:                                                                              |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| U.S. government direct obligations and U.S. agencies                                                             |   |                                                               | -          |   |   |   | 34,329 |   |   |   | - |   |   |   | 34,329 |   |
| Corporate debt securities                                                                                        |   |                                                               | -          |   |   |   | 50,719 |   |   |   | - |   |   |   | 50,719 |   |
| Asset-backed securities                                                                                          |   |                                                               | -          |   |   |   | 42,963 |   |   |   | - |   |   |   | 42,963 |   |
| Commercial mortgage-backed securities                                                                            |   |                                                               | -          |   |   |   | 8,299 |   |   |   | - |   |   |   | 8,299 |   |
| Total fixed maturities held for trading                                                                          |   |                                                               | -          |   |   |   | 136,310 |   |   |   | - |   |   |   | 136,310 |   |
| Equity investments available-for-sale:                                                                           |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Consumer products                                                                                                |   |                                                               | 56         |   |   |   | - |   |   |   | - |   |   |   | 56 |   |
| Equity mutual funds                                                                                              |   |                                                               | 19,185     |   |   |   | 446 |   |   |   | - |   |   |   | 19,631 |   |
| Airline industry                                                                                                 |   |                                                               | 3,734      |   |   |   | - |   |   |   | - |   |   |   | 3,734 |   |
| Total equity investments                                                                                         |   |                                                               | 22,975     |   |   |   | 446 |   |   |   | - |   |   |   | 23,421 |   |
| Short-term investments available-for-sale                                                                        |   |                                                               | 50,212     |   |   |   | 555,445 |   |   |   | - |   |   |   | 605,657 |   |
| Collateral under securities lending agreements                                                                   |   |                                                               | 60,439     |   |   |   | - |   |   |   | - |   |   |   | 60,439 |   |
| Other assets 1                                                                                                   |   |                                                               | -          |   |   |   | 33,278 |   |   |   | - |   |   |   | 33,278 |   |
| Separate account assets 2                                                                                        |   |                                                               | 11,054,450 |   |   |   | 6,839,332 |   |   |   | 12,376 |   |   |   | 17,906,158 |   |
| Total assets                                                                                                     |   | $                                                                  | 11,188,076 |   |   | $ | 20,491,929 |   |   | $ | 770,187 |   |   | $ | 32,450,192 |   |
|                                                                                                             |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Liabilities                                                                                                      |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total liabilities 1                                                                                              |   | $                                                                  | -          |   |   | $ | - |   |   | $ | 4,213 |   |   | $ | 4,213 |   |
|                                                                                                             |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 1  Includes derivative financial instruments.                                                          |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |   |   |   |
| 2 Includes only separate account investments which are carried at the fair value of the underlying invested |   |                                                               |       |   |   |   |   |   |   |
| assets owned by the separate accounts.                                                                           |   |                                                               |       |   |   |   |   |   |   |   |   |   |   |

----

| Recurring Level 3 Financial Assets and Liabilities Three Months Ended September 30, 2009                                                                           |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                               |   | Fixed maturitiesavailable-for-sale: U.Sgovernment andU.S. agencies |   |   | Fixed maturitiesavailable-for-sale: corporatedebt securities |   |   | Fixed maturitiesavailable-for-sale: asset-backedsecurities |   |   | Fixed maturitiesavailable-for-sale: commercialmortgage-backed securities |   |   | Fixed maturities available-for-sale:collateralized debt obligations |   |   | Other assets and liabilities 1 |   |   | Separate accounts |   |
| Balance, July 1, 2009                                                                                                                                              |   | $ | 1,381 |   |   | $ | 228,310 |   |   | $ | 401,991 |   |   | $ | 55,305 |   |   | $ | 14,240 |   |   | $ | (3,677 | ) |   | $ | 7,790 |   |
| Realized and unrealized gains and losses:                                                                                                                          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Gains) losses included in net income                                                                                                                              |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
| Gains (losses) included in other comprehensive income                                                                                                              |   |   | 57 |   |   |   | 24,765 |   |   |   | 36,680 |   |   |   | 2,228 |   |   |   | 1,540 |   |   |   | (536 | ) |   |   | 950 |   |
| Purchases, issuances and settlements                                                                                                                               |   |   | (54 | ) |   |   | 4,972 |   |   |   | (19,754 | ) |   |   | (44,043 | ) |   |   | (4,684 | ) |   |   | - |   |   |   | (62 | ) |
| Transfers in (out) of Level 3                                                                                                                                      |   |   | - |   |   |   | (536 | ) |   |   | 6,771 |   |   |   | 40,169 |   |   |   | 8,473 |   |   |   | - |   |   |   | 3,698 |   |
| Balance, September 30, 2009                                                                                                                                        |   | $ | 1,384 |   |   | $ | 257,511 |   |   | $ | 425,688 |   |   | $ | 53,659 |   |   | $ | 19,569 |   |   | $ | (4,213 | ) |   | $ | 12,376 |   |
| Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relating to assets held at September 30, 2009 |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |

| Recurring Level 3 Financial Assets and Liabilities Nine Months Ended September 30, 2009                                                                           |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                              |   | Fixed maturitiesavailable-for-sale: U.Sgovernment andU.S. agencies |   |   | Fixed maturitiesavailable-for-sale: corporatedebt securities |   |   | Fixed maturitiesavailable-for-sale: asset-backedsecurities |   |   | Fixed maturitiesavailable-for-sale: commercialmortgage-backedsecurities |   |   | Fixed maturitiesavailable-for-sale: collateralizeddebt obligations |   |   | Other assetsand liabilities 1 |   | Separateaccounts |   |
| Balance, January 1, 2009                                                                                                                                          |   | $ | 14,711 |   |   | $ | 203,975 |   |   | $ | 521,351 |   |   | $ | 55,321 |   |   | $ | 213 |   |   | $ | 3,224 |   | $ | 532 |   |
| Realized and unrealized gains and losses:                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| (Gains) losses included in net income                                                                                                                             |   |   | - |   |   |   | 57 |   |   |   | 3,143 |   |   |   | - |   |   |   | - |   |   |   | - |   |   | - |   |
| Gains (losses) included in other                                                                                                                                  |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| comprehensive income                                                                                                                                              |   |   | 2,909 |   |   |   | 30,366 |   |   |   | 100,577 |   |   |   | (1,414 | ) |   |   | (4,958 | ) |   |   | (7,437 | ) |   | 1,547 |   |
| Purchases, issuances and settlements                                                                                                                              |   |   | (156 | ) |   |   | (20,265 | ) |   |   | (98,959 | ) |   |   | (248 | ) |   |   | 12,363 |   |   |   | - |   |   | 7,718 |   |
| Transfers in (out) of Level 3                                                                                                                                     |   |   | (16,080 | ) |   |   | 43,378 |   |   |   | (100,424 | ) |   |   | - |   |   |   | 11,951 |   |   |   | - |   |   | 2,579 |   |
| Balance, September 30, 2009                                                                                                                                       |   | $ | 1,384 |   |   | $ | 257,511 |   |   | $ | 425,688 |   |   | $ | 53,659 |   |   | $ | 19,569 |   |   | $ | (4,213 | ) | $ | 12,376 |   |
| Total gains (losses) for the period included in net income attributable to the change in unrealized gains and losses relatingto assets held at September 30, 2009 |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   |   | $ | - |   | $ | - |   |

----

|                                                                           |   | Nine Months Ended September 30, 2009 |
|--------------------------------------------------------------------------------|--------|-------------------------------------------|
|                                                                           |   | Net realized gains                        |   |   | Net investment |
|                                                                           |   | (losses) on investments                   |   |   | income |
|                                                                           |   |                                      |   |   |   |
| Realized and unrealized gains and losses included in net income for the period |   | $                                         | 3,200 |   |   | $ | - |

| Balance, January 1, 2008                          |   | $      | 101,655 |
|---------------------------------------------------|--------|--------|---------|
| Purchase price accounting adjustment              |   |   | 3,600   |
| Balance, December 31, 2008 and September 30, 2009 |   | $      | 105,255 |

|                          |   | September 30, 2009 |   |
|-------------------------------|--------|--------------------|--------|
|                          |   | Gross carrying     |   |   | Accumulated |   |   |   |   |
|                          |   | amount             |   |   | amortization |   |   | Net book value |   |
| Customer relationships        |   | $                  | 36,314 |   |   | $ | (9,342 | ) |   | $ | 26,972 |   |
| Preferred provider agreements |   |               | 7,970  |   |   |   | (4,262 | ) |   |   | 3,708 |   |
| Total                         |   | $                  | 44,284 |   |   | $ | (13,604 | ) |   | $ | 30,680 |   |

|                          |   | December 31, 2008 |   |
|-------------------------------|--------|-------------------|--------|
|                          |   | Gross carrying    |   |   | Accumulated |   |   |   |   |
|                          |   | amount            |   |   | amortization |   |   | Net book value |   |
| Customer relationships        |   | $                 | 36,314 |   |   | $ | (7,249 | ) |   | $ | 29,065 |   |
| Preferred provider agreements |   |              | 7,970  |   |   |   | (3,211 | ) |   |   | 4,759 |   |
| Total                         |   | $                 | 44,284 |   |   | $ | (10,460 | ) |   | $ | 33,824 |   |

----

| Year Ended December 31, |   | Amount |   |
|-------------------------|--------|--------|--------|
| 2009                    |   | $      | 4,492  |   |
| 2010                    |   |   | 4,004  |   |
| 2011                    |   |   | 3,801  |   |
| 2012                    |   |   | 3,597  |   |
| 2013                    |   |   | 3,418  |   |

| 9.   | Other Comprehensive Income |
|----------------|----------------------------|

|                                        |   | Nine Months Ended September 30, 2009 |      |
|---------------------------------------------|--------|--------------------------------------|-----------|
|                                        |   | Before-tax                           |      |   | Tax (Expense) |   |   | Net-of-tax |   |
|                                        |   | Amount                               |      |   | Benefit |   |   | Amount |   |
| Unrealized gains (losses) on available-     |   |                                 |      |   |   |   |   |   |   |
| for-sale securities:                        |   |                                 |      |   |   |   |   |   |   |
| Net changes during the year related to      |   |                                 |      |   |   |   |   |   |   |
| cash flow hedges                            |   | $                                    | (47,298   | ) |   | $ | 16,554 |   |   | $ | (30,744 | ) |
| Unrealized holding gains (losses) arising   |   |                                 |      |   |   |   |   |   |   |   |   |   |
| during the year                             |   |                                 | 1,161,922 |   |   |   | (406,673 | ) |   |   | 755,249 |   |
| Less: reclassification adjustment for gains |   |                                 |      |   |   |   |   |   |   |   |   |   |
| (losses) realized in net income             |   |                                 | (16,733   | ) |   |   | 5,857 |   |   |   | (10,876 | ) |
| Net unrealized gains (losses)               |   |                                 | 1,097,891 |   |   |   | (384,262 | ) |   |   | 713,629 |   |
| Reserve, deferred acquisition costs and     |   |                                 |      |   |   |   |   |   |   |   |   |   |
| value of business acquired adjustments      |   |                                 | (229,040  | ) |   |   | 80,164 |   |   |   | (148,876 | ) |
| Net unrealized gains (losses)               |   |                                 | 868,851   |   |   |   | (304,098 | ) |   |   | 564,753 |   |
| Employee benefit plan adjustment            |   |                                 | (4,962    | ) |   |   | 1,737 |   |   |   | (3,225 | ) |
| Other comprehensive income (loss)           |   | $                                    | 863,889   |   |   | $ | (302,361 | ) |   | $ | 561,528 |   |

----

|                                          |   | Year Ended December 31, 2008 |       |
|-----------------------------------------------|--------|------------------------------|------------|
|                                          |   | Before-tax                   |       |   | Tax (Expense) |   |   | Net-of-tax |   |
|                                          |   | Amount                       |       |   | Benefit |   |   | Amount |   |
| Unrealized gains (losses) on available-       |   |                         |       |   |   |   |   |   |   |
| for-sale securities:                          |   |                         |       |   |   |   |   |   |   |
| Net changes during the year related to        |   |                         |       |   |   |   |   |   |   |
| cash flow hedges                              |   | $                            | 85,494     |   |   | $ | (29,923 | ) |   | $ | 55,571 |   |
| Unrealized holding gains (losses) arising     |   |                         |       |   |   |   |   |   |   |   |   |   |
| during the year                               |   |                         | (1,431,239 | ) |   |   | 496,555 |   |   |   | (934,684 | ) |
| Less: reclassification adjustment for (gains) |   |                         |       |   |   |   |   |   |   |   |   |   |
| losses realized in net income                 |   |                         | 38,978     |   |   |   | (10,989 | ) |   |   | 27,989 |   |
| Net unrealized gains (losses)                 |   |                         | (1,306,767 | ) |   |   | 455,643 |   |   |   | (851,124 | ) |
| Reserve, deferred acquisition costs and       |   |                         |       |   |   |   |   |   |   |   |   |   |
| value of business acquired adjustments        |   |                         | 254,180    |   |   |   | (88,963 | ) |   |   | 165,217 |   |
| Net unrealized gains (losses)                 |   |                         | (1,052,587 | ) |   |   | 366,680 |   |   |   | (685,907 | ) |
| Employee benefit plan adjustment              |   |                         | (115,766   | ) |   |   | 40,518 |   |   |   | (75,248 | ) |
| Other comprehensive income (loss)             |   | $                            | (1,168,353 | ) |   | $ | 407,198 |   |   | $ | (761,155 | ) |

----

|                                   |   | Three Months Ended September 30, |   |
|----------------------------------------|--------|----------------------------------|--------|
|                                   |   | 2009                             |   |   | 2008 |   |   | 2009 |   |   | 2008 |   |
|                                   |   | Defined benefit pension plan     |   |   | Post-retirement medical plan |   |
| Components of periodic (benefit) cost: |   |                             |   |   |   |   |   |   |   |   |   |   |
| Service cost                           |   | $                                | 1,022  |   |   | $ | 1,258 |   |   | $ | 170 |   |   | $ | 275 |   |
| Interest cost                          |   |                             | 4,784  |   |   |   | 4,554 |   |   |   | 177 |   |   |   | 279 |   |
| Expected return on plan assets         |   |                             | (4,018 | ) |   |   | (5,036 | ) |   |   | - |   |   |   | - |   |
| Amortization of transition obligation  |   |                             | (379   | ) |   |   | (378 | ) |   |   | - |   |   |   | - |   |
| Amortization of unrecognized prior     |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| service cost                           |   |                             | 22     |   |   |   | 22 |   |   |   | (412 | ) |   |   | (412 | ) |
| Amortization of loss from              |   |                             |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| earlier periods                        |   |                             | 2,533  |   |   |   | 226 |   |   |   | (110 | ) |   |   | - |   |
| Net periodic cost (benefit)            |   | $                                | 3,964  |   |   | $ | 646 |   |   | $ | (175 | ) |   | $ | 142 |   |

|                                   |   | Nine Months Ended September 30, |    |
|----------------------------------------|--------|---------------------------------|---------|
|                                   |   | 2009                            |    |   | 2008 |   |   | 2009 |   |   | 2008 |   |
|                                   |   | Defined benefit pension plan    |    |   | Post-retirement medical plan |   |
| Components of periodic (benefit) cost: |   |                            |    |   |   |   |   |   |   |   |   |   |
| Service cost                           |   | $                               | 2,944   |   |   | $ | 4,484 |   |   | $ | 476 |   |   | $ | 989 |   |
| Interest cost                          |   |                            | 14,490  |   |   |   | 13,803 |   |   |   | 689 |   |   |   | 974 |   |
| Expected return on plan assets         |   |                            | (11,852 | ) |   |   | (15,464 | ) |   |   | - |   |   |   | - |   |
| Amortization of transition obligation  |   |                            | (1,135  | ) |   |   | (1,135 | ) |   |   | - |   |   |   | - |   |
| Amortization of unrecognized prior     |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| service cost                           |   |                            | 66      |   |   |   | 98 |   |   |   | (1,236 | ) |   |   | (1,756 | ) |
| Amortization of loss from              |   |                            |    |   |   |   |   |   |   |   |   |   |   |   |   |   |
| earlier periods                        |   |                            | 7,861   |   |   |   | 452 |   |   |   | (110 | ) |   |   | 85 |   |
| Net periodic cost (benefit)            |   | $                               | 12,374  |   |   | $ | 2,238 |   |   | $ | (181 | ) |   | $ | 292 |   |

| 12. | Federal Income Taxes |
|-----|----------------------|

|                                                  |   |   | Three Months Ended September 30, |    | Nine Months Ended September 30, |
|-------------------------------------------------------|--------|--------|----------------------------------|---------|---------------------------------|
|                                                  |   |   | 2009                             |    | 2008 (As restated)              |   | 2009 |   | 2008 (As restated) |
| Current                                               |   | $      | (3,041)                          |    | $44,970                         |   | ($2,036) |   | $84,572 |
| Deferred                                              |   |   | 20,170                           |    | (4,337)                         |   | 51,954 |   | (9,746) |
| Total income tax provision from continuing operations | $      | 17,129 |                             | $40,633 |                            | $49,918 |   | $74,826 |

----

|                                                         | Nine Months Ended September 30, |
|--------------------------------------------------------------|---------------------------------|
| 2009                                                         |                            | 2008 |
| Statutory federal income tax rate                            | 35.0%                           |   | 35.0% |
| Income tax effect of:                                        |                            |   |   |
| Investment income not subject to federal tax                 | (3.2%)                          |   | (1.5%) |
| Tax credits                                                  | (2.4%)                          |   | (2.2%) |
| State income taxes, net of federal benefit                   | 0.5%                            |   | 0.4% |
| Provision for policyholders' share of earnings               |                            |   |   |
| on participating business                                    | 0.5%                            |   | (15.5%) |
| Income tax contingency provisions                            | (1.1%)                          |   |   |
| Other, net                                                   | (1.7%)                          |   | (0.3%) |
| Effective federal income tax rate from continuing operations | 27.6%                           |   | 15.9% |

----

| Balance, January 1, 2009                                       |   | $      | 577,799  |   |
|----------------------------------------------------------------|--------|--------|----------|--------|
| Decrease in deferred tax asset included in other comprehensive |   |   |     |   |
| income related to the change in unrealized (gains) losses      |   |   |     |   |
| on investment assets, net of policyholder related amounts      |   |   | (297,476 | )      |
| Increase in deferred tax asset related to income tax           |   |   |     |   |
| contingency provisions                                         |   |   | 21,690   |   |
| Decrease in deferred tax asset related to the condensed        |   |   |     |   |
| consolidated statement of income                               |   |   | (51,954  | )      |
| Other, net                                                     |   |   | (7,631   | )      |
| Balance, September 30, 2009                                    |   | $      | 242,428  |   |

----

|                                       |   | Three Months Ended September 30, | Nine Months Ended September 30, |
|--------------------------------------------|--------|----------------------------------|---------------------------------|
|                                       |   | 2009                             |                            | 2008 | 2009 | 2008 |
|                                       |   |                             |                            | (As restated) |   | (As restated) |
| Revenues:                                  |   |                             |                            |   |   |   |
| Premium income                             | $      | 141,888                          |                            | $127,926 | $335,513 | $306,486 |
| Fee income                                 |   | 12,061                           |                            | 11,778 | 34,386 | 39,806 |
| Net investment income                      |   | 185,027                          |                            | 172,810 | 532,212 | 516,640 |
| Net realized gains (losses) on investments |   | (8,301)                          |                            | (22,429) | 4,761 | (3,503) |
| Total revenues                             |   | 330,675                          |                            | 290,085 | 906,872 | 859,429 |
| Benefits and expenses:                     |   |                             |                            |   |   |   |
| Policyholder benefits                      |   | 285,841                          |                            | 255,908 | 744,430 | 689,455 |
| Operating expenses                         |   | 21,569                           |                            | 19,475 | 71,656 | 70,182 |
| Total benefits and expenses                |   | 307,410                          |                            | 275,383 | 816,086 | 759,637 |
| Income from continuing operations          |   |                             |                            |   |   |   |
| before income taxes                        |   | 23,265                           |                            | 14,702 | 90,786 | 99,792 |
| Income tax expense                         |   | 6,309                            |                            | 4,489 | 27,387 | 30,841 |
| Income from continuing operations          | $      | 16,956                           |                            | $10,213 | $63,399 | $68,951 |

|                                       |   | Three Months Ended September 30, | Nine Months Ended September 30, |
|--------------------------------------------|--------|----------------------------------|---------------------------------|
|                                       |   | 2009                             |                            | 2008 | 2009 | 2008 |
|                                       |   |                             |                            | (As restated) |   | (As restated) |
| Revenues:                                  |   |                             |                            |   |   |   |
| Premium income                             | $      | 743                              |                            | $414 | $2,367 | $2,291 |
| Fee income                                 |   | 88,250                           |                            | 91,742 | 237,701 | 282,380 |
| Net investment income                      |   | 101,967                          |                            | 86,845 | 287,045 | 261,311 |
| Net realized gains (losses) on investments |   | 13,808                           |                            | (15,273) | 21,969 | (1,944) |
| Total revenues                             |   | 204,768                          |                            | 163,728 | 549,082 | 544,038 |
| Benefits and expenses:                     |   |                             |                            |   |   |   |
| Policyholder benefits                      |   | 58,502                           |                            | 56,776 | 175,058 | 171,335 |
| Operating expenses                         |   | 90,180                           |                            | 76,796 | 264,354 | 249,641 |
| Total benefits and expenses                |   | 148,682                          |                            | 133,572 | 439,412 | 420,976 |
| Income from continuing operations          |   |                             |                            |   |   |   |
| before income taxes                        |   | 56,086                           |                            | 30,156 | 109,670 | 123,062 |
| Income tax expense                         |   | 15,097                           |                            | 7,697 | 28,974 | 31,226 |
| Income from continuing operations          | $      | 40,989                           |                            | $22,459 | $80,696 | $91,836 |

----

|                                       |   | Three Months Ended September 30, |    |   | Nine Months Ended September 30, |   |
|--------------------------------------------|--------|---------------------------------------|---------|--------|--------------------------------------|--------|
|                                       |   | 2009                                  |    |   | 2008                                 |   |   | 2009 |   |   | 2008 |   |
| Revenues:                                  |   |                                  |    |   |                                 |   |   |   |   |   |   |   |
| Premium income                             |   | $                                     | 34,076  |   |                                 | $      | 35,051 |   |   | $ | 101,176 |   |   | $ | 108,042 |   |
| Fee income                                 |   |                                  | 1,245   |   |                                 |   | 1,311 |   |   |   | 3,733 |   |   |   | 3,617 |   |
| Net investment income                      |   |                                  | 14,430  |   |                                 |   | 9,223 |   |   |   | 36,549 |   |   |   | 27,003 |   |
| Net realized gains (losses) on investments |   |                                  | -       |   |                                 |   | (209 | ) |   |   | 150 |   |   |   | (20 | ) |
| Total revenues                             |   |                                  | 49,751  |   |                                 |   | 45,376 |   |   |   | 141,608 |   |   |   | 138,642 |   |
| Benefits and expenses:                     |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| Policyholder benefits                      |   |                                  | 45,255  |   |                                 |   | (49,241 | ) |   |   | 106,483 |   |   |   | (190,833 | ) |
| Operating expenses                         |   |                                  | 18,188  |   |                                 |   | 18,991 |   |   |   | 55,041 |   |   |   | 82,698 |   |
| Total benefits and expenses                |   |                                  | 63,443  |   |                                 |   | (30,250 | ) |   |   | 161,524 |   |   |   | (108,135 | ) |
| Income from continuing operations          |   |                                  |    |   |                                 |   |   |   |   |   |   |   |   |   |   |   |
| before income taxes                        |   |                                  | (13,692 | )      |                                 |   | 75,626 |   |   |   | (19,916 | ) |   |   | 246,777 |   |
| Income tax expense (benefit)               |   |                                  | (4,276  | )      |                                 |   | 28,447 |   |   |   | (6,443 | ) |   |   | 12,759 |   |
| Income (loss) from continuing operations   |   | $                                     | (9,416  | )      |                                 | $      | 47,179 |   |   | $ | (13,473 | ) |   | $ | 234,018 |   |

----

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

|              |   | September 30, |
|-------------------|--------|---------------|
| S&P 500 Index |   | 2009          |   | 2008 |
| Index close       |   | 1,057         |   | 1,166 |
| Index average     |   | 900           |   | 1,324 |

----

----

|                                                  |   | Three Months Ended September 30, |   |
|-------------------------------------------------------|--------|---------------------------------------|--------|
| Income statement data (In millions)                   |   | 2009                                  |   |   | 2008 |   |
| Revenues:                                             |   |                                  |   |   |   |   |
| Premium income                                        |   | $                                     | 176    |   |   | $ | 163 |   |
| Fee income                                            |   |                                  | 102    |   |   |   | 105 |   |
| Net investment income                                 |   |                                  | 302    |   |   |   | 269 |   |
| Net realized gains (losses) on investments            |   |                                  | 6      |   |   |   | (38 | ) |
| Total revenues                                        |   |                                  | 586    |   |   |   | 499 |   |
| Benefits and expenses:                                |   |                                  |   |   |   |   |   |   |
| Policyholder benefits                                 |   |                                  | 390    |   |   |   | 264 |   |
| Operating expenses                                    |   |                                  | 130    |   |   |   | 115 |   |
| Total benefits and expenses                           |   |                                  | 520    |   |   |   | 379 |   |
| Income from continuing operations before income taxes |   |                                  | 66     |   |   |   | 120 |   |
| Income tax expense                                    |   |                                  | 17     |   |   |   | 40 |   |
| Income from continuing operations                     |   | $                                     | 49     |   |   | $ | 80 |   |

----

|                                                  |   | Nine Months Ended September 30, |   |
|-------------------------------------------------------|--------|--------------------------------------|--------|
| Income statement data (In millions)                   |   | 2009                                 |   |   | 2008 |   |
| Revenues:                                             |   |                                 |   |   |   |   |
| Premium income                                        |   | $                                    | 439    |   |   | $ | 417 |   |
| Fee income                                            |   |                                 | 276    |   |   |   | 326 |   |
| Net investment income                                 |   |                                 | 856    |   |   |   | 805 |   |
| Net realized gains (losses)  on investments |   |                                 | 27     |   |   |   | (6 | ) |
| Total revenues                                        |   |                                 | 1,598  |   |   |   | 1,542 |   |
| Benefits and expenses:                                |   |                                 |   |   |   |   |   |   |
| Policyholder benefits                                 |   |                                 | 1,026  |   |   |   | 669 |   |
| Operating expenses                                    |   |                                 | 391    |   |   |   | 403 |   |
| Total benefits and expenses                           |   |                                 | 1,417  |   |   |   | 1,072 |   |
| Income from continuing operations before income taxes |   |                                 | 181    |   |   |   | 470 |   |
| Income tax expense                                    |   |                                 | 50     |   |   |   | 75 |   |
| Income from continuing operations                     |   | $                                    | 131    |   |   | $ | 395 |   |

----

|                                                  |   | Three Months Ended September 30,  |   |
|-------------------------------------------------------|--------|----------------------------------------|--------|
| Income statement data (In millions)                   |   | 2009                                   |   |   | 2008 |   |
| Revenues:                                             |   |                                   |   |   |   |   |
| Premium income                                        |   | $                                      | 142    |   |   | $ | 128 |   |
| Fee income                                            |   |                                   | 12     |   |   |   | 12 |   |
| Net investment income                                 |   |                                   | 185    |   |   |   | 173 |   |
| Net realized gains (losses) on investments            |   |                                   | (8     | ) |   |   | (23 | ) |
| Total revenues                                        |   |                                   | 331    |   |   |   | 290 |   |
| Benefits and expenses:                                |   |                                   |   |   |   |   |   |   |
| Policyholder benefits                                 |   |                                   | 286    |   |   |   | 256 |   |
| Operating expenses                                    |   |                                   | 22     |   |   |   | 19 |   |
| Total benefits and expenses                           |   |                                   | 308    |   |   |   | 275 |   |
| Income from continuing operations before income taxes |   |                                   | 23     |   |   |   | 15 |   |
| Income tax expense                                    |   |                                   | 7      |   |   |   | 5 |   |
| Income from continuing operations                     |   | $                                      | 16     |   |   | $ | 10 |   |

| (In thousands)                    |   | September 30, 2009 |   | June 30, 2009 |
|-----------------------------------|--------|--------------------|--------|---------------|
| Policies and Participant Accounts |   | 520                |   | 525           |

----

|                                                  |   | Nine Months Ended September 30, |   |
|-------------------------------------------------------|--------|---------------------------------|--------|
| Income statement data (In millions)                   |   | 2009                            |   |   | 2008 |   |
| Revenues:                                             |   |                            |   |   |   |   |
| Premium income                                        |   | $                               | 336    |   |   | $ | 306 |   |
| Fee income                                            |   |                            | 34     |   |   |   | 40 |   |
| Net investment income                                 |   |                            | 532    |   |   |   | 517 |   |
| Net realized gains (losses) on investments            |   |                            | 5      |   |   |   | (4 | ) |
| Total revenues                                        |   |                            | 907    |   |   |   | 859 |   |
| Benefits and expenses:                                |   |                            |   |   |   |   |   |   |
| Policyholder benefits                                 |   |                            | 744    |   |   |   | 689 |   |
| Operating expenses                                    |   |                            | 72     |   |   |   | 70 |   |
| Total benefits and expenses                           |   |                            | 816    |   |   |   | 759 |   |
| Income from continuing operations before income taxes |   |                            | 91     |   |   |   | 100 |   |
| Income tax expense                                    |   |                            | 28     |   |   |   | 31 |   |
| Income from continuing operations                     |   | $                               | 63     |   |   | $ | 69 |   |

|                              |   | September 30, |
|-----------------------------------|--------|---------------|
| (In thousands)                    |   | 2009          |   | 2008 |
| Policies and Participant Accounts |   | 520           |   | 536 |

----

|                                                  |   | Three Months Ended September 30, |   |
|-------------------------------------------------------|--------|----------------------------------|--------|
| Income statement data (In millions)                   |   | 2009                             |   |   | 2008 |   |
| Revenues:                                             |   |                             |   |   |   |   |
| Premium income                                        |   | $                                | -      |   |   | $ | - |   |
| Fee income                                            |   |                             | 89     |   |   |   | 92 |   |
| Net investment income                                 |   |                             | 102    |   |   |   | 87 |   |
| Net realized gains (losses) on investments            |   |                             | 14     |   |   |   | (15 | ) |
| Total revenues                                        |   |                             | 205    |   |   |   | 164 |   |
| Benefits and expenses:                                |   |                             |   |   |   |   |   |   |
| Policyholder benefits                                 |   |                             | 58     |   |   |   | 57 |   |
| Operating expenses                                    |   |                             | 90     |   |   |   | 77 |   |
| Total benefits and expenses                           |   |                             | 148    |   |   |   | 134 |   |
| Income from continuing operations before income taxes |   |                             | 57     |   |   |   | 30 |   |
| Income tax expense                                    |   |                             | 15     |   |   |   | 7 |   |
| Income from continuing operations                     |   | $                                | 42     |   |   | $ | 23 |   |

| (In thousands)                    |   | September 30, 2009 |   | June 30, 2009 |
|-----------------------------------|--------|--------------------|--------|---------------|
| Policies and Participant Accounts |   | 4,156              |   | 3,788         |

----

|                                                  |   | Nine Months Ended September 30, |   |
|-------------------------------------------------------|--------|---------------------------------|--------|
| Income statement data (In millions)                   |   | 2009                            |   |   | 2008 |   |
| Revenues:                                             |   |                            |   |   |   |   |
| Premium income                                        |   | $                               | 2      |   |   | $ | 3 |   |
| Fee income                                            |   |                            | 238    |   |   |   | 282 |   |
| Net investment income                                 |   |                            | 287    |   |   |   | 261 |   |
| Net realized gains (losses) on investments            |   |                            | 22     |   |   |   | (2 | ) |
| Total revenues                                        |   |                            | 549    |   |   |   | 544 |   |
| Benefits and expenses:                                |   |                            |   |   |   |   |   |   |
| Policyholder benefits                                 |   |                            | 175    |   |   |   | 171 |   |
| Operating expenses                                    |   |                            | 264    |   |   |   | 250 |   |
| Total benefits and expenses                           |   |                            | 439    |   |   |   | 421 |   |
| Income from continuing operations before income taxes |   |                            | 110    |   |   |   | 123 |   |
| Income tax expense                                    |   |                            | 29     |   |   |   | 31 |   |
| Income from continuing operations                     |   | $                               | 81     |   |   | $ | 92 |   |

|                              |   | September 30, |
|-----------------------------------|--------|---------------|
| (In thousands)                    |   | 2009          |   | 2008 |
| Policies and Participant Accounts |   | 4,156         |   | 3,923 |

----

|                                                 |   |   | September 30, |   |
|------------------------------------------------------|--------|--------|---------------|--------|
| Income statement data (In millions)                  |   |   | 2009          |   |   | 2008 |   |
| General Account - Fixed Options:                     |   |   |          |   |   |   |   |
| Public / Non-profit                                  |   |   | $             | 3,423  |   |   | $ | 3,361 |   |
|                                                 | 401(k) |   |          |   | 3,511 |   |   |   | 3,105 |   |
|                                                 |   |   |          | $      | 6,934 |   |   | $ | 6,466 |   |
| Separate Account -Variable Options:                  |   |   |          |   |   |   |   |   |   |
| Public / Non-profit                                  |   |   | $             | 7,660  |   |   | $ | 6,006 |   |
|                                                 | 401(k) |   |          |   | 6,005 |   |   |   | 5,714 |   |
|                                                 |   |   |          | $      | 13,665 |   |   | $ | 11,720 |   |
| Unaffiliated Retail:                                 |   |   |          |   |   |   |   |   |   |
| Investment Options and Administrative Services Only: |   |   |          |   |   |   |   |   |   |
| Public / Non-profit                                  |   |   | $             | 43,438 |   |   | $ | 45,330 |   |
|                                                 | 401(k) |   |          |   | 18,445 |   |   |   | 17,731 |   |
| Institutional                                        |   |   |          | 33,948 |   |   |   | 27,335 |   |
|                                                 |   |   |          | $      | 95,831 |   |   | $ | 90,396 |   |

----

|                                                         |   | Three Months Ended September 30, |   |
|--------------------------------------------------------------|--------|----------------------------------|--------|
| Income statement data (In millions)                          |   | 2009                             |   |   | 2008 |   |
| Revenues:                                                    |   |                             |   |   |   |   |
| Premium income                                               |   | $                                | 34     |   |   | $ | 35 |   |
| Fee income                                                   |   |                             | 1      |   |   |   | 1 |   |
| Net investment income                                        |   |                             | 15     |   |   |   | 9 |   |
| Total revenues                                               |   |                             | 50     |   |   |   | 45 |   |
| Benefits and expenses:                                       |   |                             |   |   |   |   |   |   |
| Policyholder benefits                                        |   |                             | 46     |   |   |   | (49 | ) |
| Operating expenses                                           |   |                             | 18     |   |   |   | 19 |   |
| Total benefits and expenses                                  |   |                             | 64     |   |   |   | (30 | ) |
| Income (loss) from continuing operations before income taxes |   |                             | (14    | ) |   |   | 75 |   |
| Income tax expense (benefit)                                 |   |                             | (5     | ) |   |   | 28 |   |
| Income (loss) from continuing operations                     |   | $                                | (9     | ) |   | $ | 47 |   |

----

|                                                         |   | Nine Months Ended September 30, |   |
|--------------------------------------------------------------|--------|--------------------------------------|--------|
| Income statement data (In millions)                          |   | 2009                                 |   |   | 2008 |   |
| Revenues:                                                    |   |                                 |   |   |   |   |
| Premium income                                               |   | $                                    | 101    |   |   | $ | 108 |   |
| Fee income                                                   |   |                                 | 4      |   |   |   | 4 |   |
| Net investment income                                        |   |                                 | 37     |   |   |   | 27 |   |
| Total revenues                                               |   |                                 | 142    |   |   |   | 139 |   |
| Benefits and expenses:                                       |   |                                 |   |   |   |   |   |   |
| Policyholder benefits                                        |   |                                 | 107    |   |   |   | (191 | ) |
| Operating expenses                                           |   |                                 | 55     |   |   |   | 83 |   |
| Total benefits and expenses                                  |   |                                 | 162    |   |   |   | (108 | ) |
| Income (loss) from continuing operations before income taxes |   |                                 | (20    | ) |   |   | 247 |   |
| Income tax expense (benefit)                                 |   |                                 | (7     | ) |   |   | 13 |   |
| Income (loss) from continuing operations                     |   | $                                    | (13    | ) |   | $ | 234 |   |

----

| Credit Rating                       |   | September 30, 2009 |   | December 31, 2008 |
|-------------------------------------|--------|--------------------|--------|-------------------|
| AAA                                 |   | 41.0%              |   | 50.1%             |
| AA                                  |   | 10.6%              |   | 9.4%              |
| A                                   |   | 20.2%              |   | 20.3%             |
| BBB                                 |   | 25.1%              |   | 18.4%             |
| BB and below (Non-investment grade) |   | 3.1%               |   | 1.8%              |
|                                | Total  |               | 100.0% |              | 100.0% |

| Sector            | September 30, 2009 |   | December 31, 2008 |
|-------------------|--------------------|--------|-------------------|
| Utility           | 14.7%              |   | 11.9%             |
| Finance           | 9.3%               |   | 8.8%              |
| Consumer          | 8.0%               |   | 6.6%              |
| Natural resources | 6.3%               |   | 4.4%              |
| Transportation    | 2.8%               |   | 2.8%              |
| Other             | 7.9%               |   | 7.3%              |

----

| ·   | The Company holds approximately $5,413 million in various mortgage-backed and asset-backed collateralized mortgage securities including securities backed by U.S. agencies, of which $2,809 million are experiencing unrealized losses of approximately $623 million at September 30, 2009.  Included in this amount is $413 million which has declinedand remained below amortized cost by 20% or more.  Of the $623 million in unrealized losses, approximately $182 million is related to securities on which there had been a credit rating downgrade since December 31, 2008.  Of the $182 million, $131 million are rated investment grade and $51 million are rated non-investment grade at September 30, 2009.  Future changes in the fair value of these securities will be dependent upon the continued increase in market liquidity and improvementsin general market conditions. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| ·   | The Company holds approximately $6,784 million of corporate debt securities of which $1,424 million are experiencing unrealized losses of approximately $244 million at September 30, 2009.  Included in this amount is $175 million which has declined and remained below amortized cost by 20% or more.  Approximately $137 million of the $244million was related to securities on which there had been a credit rating downgrade since December 31, 2008.  Of the $137 million, $62 million are rated investment grade and $75 million are rated non-investment grade at September 30, 2009. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

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

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

| ·   | Insurance risk - the potential of loss resulting from claims and expenses exceeding policy benefit liabilities held; |
|--------------------|----------------------------------------------------------------------------------------------------------------------|

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

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

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

| (b) | There have been no changes in the Company’s internal control over financial reporting that occurred during the nine months ended September 30, 2009 that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| Item 1A. | Risk Factors |
|----------|--------------|

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

| ·   | The insurance industry is heavily regulated and changes in regulation may reduce profitability; |
|--------------------|-------------------------------------------------------------------------------------------------|

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

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

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

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

| ·   | Interest rate fluctuations could have a negative impact on results of operations and financial condition; |
|--------------------|-----------------------------------------------------------------------------------------------------------|

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

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

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

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

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

| Exhibit Number         |   | Title                                                                                                                            |   | Page |
|------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------|--------|------|
|    31.1 |   |                Rule 13a-14(a)/15-d14(a) Certification |   | 56   |
|    31.2 |   |                Rule 13a-14(a)/15-d14(a) Certification |   | 57   |
| 32                     |   |                18 U.S.C. 1350 Certification           |   | 58   |

| By:    | /s/Glen R. Derback                                     | Date:  | November 6, 2009 |
|--------|--------------------------------------------------------|--------|------------------|
|   | Glen R. Derback, Senior Vice President and Controller  |   |             |   |
|   | (Duly authorized officer and chief accounting officer) |   |             |   |

----