UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q


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

For the quarterly period ended                 September 30, 2001
                                ------------------------------------------------

OR

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

For the transaction period from                     to
                                 ------------------     -------------------

Commission file number                          333-1173
                                    ----------------------------------

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

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


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

                                 [303] 737-4128
  ----------------------------------------------------------------------------
              (Registrant's telephone number, including area code)


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

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

As of September 30, 2001, 7,032,000 shares of the registrant's common stock were
outstanding, all of which were owned by the registrant's parent company.

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



<PAGE>



                                TABLE OF CONTENTS


Part I   FINANCIAL INFORMATION                                          Page
                                                                     -----------
         Item 1   Financial Statements                                   3

                  Consolidated Statements of Income                      3

                  Consolidated Balance Sheets                            4

                  Consolidated Statements of Cash Flows                  6

                  Consolidated Statements of Stockholder's Equity        8

                  Notes to Consolidated Financial Statements             9

         Item 2   Management's Discussion and Analysis of
                  Financial Condition and Results of Operations          12

         Item 3   Quantitative and Qualitative Disclosures About
                  Market Risk                                            19

Part II  OTHER INFORMATION                                               20

         Item 1   Legal Proceedings                                      20

         Item 6   Exhibits and Reports on Form 8-K                       20

         Signature                                                       20



<PAGE>



PART I     FINANCIAL INFORMATION

ITEM 1     FINANCIAL STATEMENTS

GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF INCOME
[Dollars in Thousands]
<TABLE>
<CAPTION>
<S>                                                    <C>               <C>              <C>               <C>
----------------------------------------------------------------------------------------------------------------------
[Unaudited]

                                                        Three Months Ended                  Nine Months Ended
                                                          September 30,                       September 30,
                                                  -------------------------------    --------------------------------
                                                      2001             2000              2001              2000
                                                  -------------    --------------    --------------    --------------
REVENUES:
  Premium income                              $       294,308   $      339,059    $      891,638    $    1,010,202
  Fee income                                          250,335          223,160           733,185           648,023
  Net investment income                               229,007          238,058           714,326           696,439
  Net realized gains on investments                    13,111            3,618            22,043            14,109
                                                  -------------    --------------    --------------    --------------

                                                      786,761          803,895         2,361,192         2,368,773
                                                  -------------    --------------    --------------    --------------
BENEFITS AND EXPENSES:
  Life and other policy benefits                      234,350          272,453           766,266           841,549
  Increase in reserves                                 47,484           37,173            76,799            66,684
  Interest paid or credited to
    contractholders                                   120,992          124,669           387,814           359,598
  Provision for policyholders' share of
    earnings on participating business                    567            1,226             2,878             5,680
  Dividends to policyholders                           16,300           16,029            55,826            54,001
                                                  -------------    --------------    --------------    --------------

                                                      419,693          451,550         1,289,583         1,327,512
                                                  -------------    --------------    --------------    --------------

  Commissions                                          52,792           48,310           147,022           147,390
  Operating expenses                                  186,671          185,234           602,766           563,467
  Premium taxes                                        13,452            9,021            27,038            33,453
  Special charges                                                                        127,040
                                                  -------------    --------------    --------------    --------------

                                                      672,608          694,115         2,193,449         2,071,822
                                                  -------------    --------------    --------------    --------------

INCOME BEFORE INCOME TAXES                            114,153          109,780           167,743           296,951

PROVISION FOR INCOME TAXES:
  Current                                              (2,842)          37,977            54,883            75,111
  Deferred                                             42,743              503               832            29,465
                                                  -------------    --------------    --------------    --------------

                                                       39,901           38,480            55,715           104,576
                                                  -------------    --------------    --------------    --------------

NET INCOME                                    $        74,252   $       71,300    $      112,028    $      192,375
                                                  =============    ==============    ==============    ==============

</TABLE>


See notes to consolidated financial statements.


<PAGE>



GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

CONSOLIDATED BALANCE SHEETS
[Dollars in Thousands]
<TABLE>
<CAPTION>
<S>                                                                           <C>                     <C>
----------------------------------------------------------------------------------------------------------------------


                                                                           September 30,            December 31,
ASSETS                                                                         2001                     2000
------
                                                                        --------------------    ---------------------
                                                                            [unaudited]

INVESTMENTS:

  Fixed Maturities:
    Available-for-sale, at fair value
      (amortized cost $9,753,059 and $9,372,009)                    $         10,187,446     $         9,419,865
  Mortgage loans on real estate, net                                             691,533                 843,371
  Common stock                                                                    82,567                  95,036
  Real estate, net                                                               116,282                 106,690
  Policy loans                                                                 2,894,233               2,809,973
  Short-term investments, available-for-sale
    (amortized cost $517,674 and $414,382)                                       510,904                 414,382
                                                                        --------------------    ---------------------

    Total investments                                                         14,482,965              13,689,317

  Cash                                                                            88,816                 153,977
  Reinsurance receivable                                                         223,543                 233,968
  Deferred policy acquisition costs                                              246,584                 279,688
  Investment income due and accrued                                              129,007                 139,152
  Uninsured claims receivable                                                    123,636                 227,803
  Other assets                                                                   726,280                 503,533
  Premiums in course of collection                                                84,817                 149,969
  Deferred income taxes                                                           65,171                 138,842
  Separate account assets                                                     11,687,587              12,381,137
                                                                        --------------------    ---------------------

TOTAL ASSETS

                                                                    $         27,858,406     $        27,897,386
                                                                        ====================    =====================

                                                                                                    (continued)


<PAGE>



GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

CONSOLIDATED BALANCE SHEETS
[Dollars in Thousands]
----------------------------------------------------------------------------------------------------------------------
[unaudited]

                                                                           September 30,            December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY                                           2001                     2000
------------------------------------
                                                                        --------------------    ---------------------
                                                                            [unaudited]

POLICY BENEFIT LIABILITIES:

  Policy reserves                                                   $         12,388,356     $        12,045,000
  Policy and contract claims                                                     357,413                 441,326
  Policyholders' funds                                                           218,815                 266,235
  Provision for policyholders' dividends                                          74,095                  72,716
  Undistributed earnings on participating business                               167,365                 165,754

GENERAL LIABILITIES:

  Due to GWL                                                                      46,565                  43,081
  Due to GWL&A Financial Inc.                                                    162,050                 171,347
  Repurchase agreements                                                          282,100
  Commercial paper                                                                88,000                  97,631
  Other liabilities                                                              864,795                 785,730
  Separate account liabilities                                                11,687,587              12,381,137
                                                                        --------------------    ---------------------

    Total liabilities                                                         26,337,141              26,469,957
                                                                        --------------------    ---------------------

STOCKHOLDER'S EQUITY:

  Preferred stock, $1 par value, 50,000,000 shares
    authorized; 0 shares issued and outstanding
  Common stock, $1 par value; 50,000,000 shares
    authorized; 7,032,000 shares issued and outstanding                            7,032                   7,032
  Additional paid-in capital                                                     723,374                 717,704
  Accumulated other comprehensive income                                         150,860                  33,672
  Retained earnings                                                              639,999                 669,021
                                                                        --------------------    ---------------------

    Total stockholder's equity                                                 1,521,265               1,427,429
                                                                        --------------------    ---------------------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY
                                                                    $         27,858,406     $        27,897,386
                                                                        ====================    =====================
See notes to consolidated financial statements.
                                                                                                    (Concluded)

</TABLE>


<PAGE>



GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
[Dollars in Thousands]
<TABLE>
<CAPTION>
<S>                                                                              <C>                     <C>
----------------------------------------------------------------------------------------------------------------------
[Unaudited]

                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                        ---------------------------------------------
                                                                               2001                     2000
                                                                        --------------------    ---------------------
OPERATING ACTIVITIES:

  Net income                                                        $            112,028     $           192,375
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Gain allocated to participating policyholders                                  2,878                   5,680
    Amortization of investments                                                  (57,973)                (41,073)
    Realized gains on disposal of investments
      and write-downs of mortgage loans and real estate                          (22,043)                (20,109)
    Amortization                                                                  39,881                  37,044
    Deferred income taxes                                                            832                  29,465
  Changes in assets and liabilities:
    Policy benefit liabilities                                                   236,026                 454,282
    Reinsurance receivable                                                        10,425                    (922)
    Accrued interest and other receivables                                       179,464                 (84,508)
    Corporate owned life insurance                                              (105,222)                 (4,859)
    Other, net                                                                   (59,315)               (136,558)
                                                                        --------------------    ---------------------

    Net cash provided by operating activities                                    336,981                 430,817
                                                                        --------------------    ---------------------

INVESTING ACTIVITIES:

  Proceeds from sales, maturities, and redemptions of investments: Fixed
    maturities:
      Held-to-maturity
        Sales                                                                                              8,571
        Maturities and redemptions                                                                       323,728
      Available-for-sale
        Sales                                                                  3,940,889                 784,829
        Maturities and redemptions                                               906,159                 638,396
    Mortgage loans                                                               142,209                  98,991
    Real estate                                                                                            6,996
    Common stock                                                                  19,600                  20,988
  Purchases of investments:
    Fixed maturities
      Held-to-maturity                                                                                  (100,524)
      Available-for-sale                                                      (5,259,798)             (1,848,610)
    Mortgage loans                                                                                        (1,968)
    Real estate                                                                   (2,280)                (23,117)
    Common stock                                                                 (24,172)                (33,912)
                                                                        --------------------    ---------------------

    Net cash used in investing activities                                       (277,393)               (125,632)
                                                                        --------------------    ---------------------


                                                                                                    (continued)


<PAGE>



GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF CASH FLOWS
[Dollars in Thousands]
----------------------------------------------------------------------------------------------------------------------
[Unaudited]

                                                                                     Nine Months Ended
                                                                                       September 30,
                                                                        ---------------------------------------------
                                                                               2001                     2000
                                                                        --------------------    ---------------------
FINANCING ACTIVITIES:

  Contract withdrawals, net of deposits                             $           (250,355)    $          (308,468)
  Net GWL borrowings (repayments)                                                  3,484                  (2,191)
  Net GWL&A Financial (repayments) borrowings                                     (9,297)                 30,598
  Dividends paid                                                                (141,050)                (88,142)
  Commercial paper (repayments) borrowings                                        (9,631)                 98,923
  Repurchase agreements borrowings (repayments)                                  282,100                 (80,579)
                                                                        --------------------    ---------------------

    Net cash used in financing activities                                       (124,749)               (349,859)
                                                                        --------------------    ---------------------

NET DECREASE IN CASH                                                             (65,161)                (44,674)

CASH, BEGINNING OF YEAR                                                          153,977                 267,514
                                                                        --------------------    ---------------------

CASH, END OF PERIOD                                                 $             88,816     $           222,840
                                                                        ====================    =====================


See notes to consolidated financial statements.                                                     (Concluded)

</TABLE>


<PAGE>



GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 [Dollars in Thousands]
<TABLE>
<CAPTION>
<S>                          <C>           <C>        <C>         <C>         <C>               <C>           <C>          <C>
-----------------------------------------------------------------------------------------------------------------------------------
[Unaudited]


                                                                                           Accumulated
                                 Preferred Stock       Common Stock        Additional         Other
                             ------------------ -------------------------   Paid-in       Comprehensive     Retained
                              Shares    Amount     Shares       Amount      Capital          Income         Earnings       Total
                             --------  -------- -----------   -----------  -----------  ----------------  ------------  -----------
BALANCE, JANUARY 1, 2001           0  $      0   7,032,000  $     7,032   $  717,704   $       33,672    $  669,021    $ 1,427,429

  Net income                                                                                                112,028        112,028
  Other comprehensive income                                                                  117,188                      117,188
                                                                                                                        -----------
Total comprehensive income                                                                                                 229,216
                                                                                                                        -----------
Dividends                                                                                                  (141,050)      (141,050)
Income tax benefit on stock
  compensation                                                                 5,670                                         5,670
                             --------  -------- -----------   -----------  -----------  ----------------  ------------  -----------

BALANCE, SEPTEMBER 30, 2001        0  $      0   7,032,000  $     7,032   $  723,374   $      150,860    $  639,999    $ 1,521,265
                             ========  ======== ===========   ===========  ===========  ================  ============  ===========

</TABLE>


See notes to consolidated financial statements.


<PAGE>



GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
[Amounts in Thousands]
--------------------------------------------------------------------------------
[Unaudited]

1.       BASIS OF PRESENTATION

         The consolidated financial statements and related notes of Great-West
         Life & Annuity Insurance Company (the Company) have been prepared in
         accordance with accounting principles generally accepted in the United
         States of America applicable to interim financial reporting and do not
         include all of the information and footnotes required for complete
         financial statements. However, in the opinion of management, these
         statements include all normal recurring adjustments necessary for a
         fair presentation of the results. These financial statements should be
         read in conjunction with the audited consolidated financial statements
         and the accompanying notes included in the Company's latest annual
         report on Form 10-K for the year ended December 31, 2000.

         Operating results for the nine months ended September 30, 2001 are not
         necessarily indicative of the results that may be expected for the full
         year ending December 31, 2001.

2.       NEW ACCOUNTING PRONOUNCEMENTS

         Effective January 1, 2001, the Company adopted Statements of Financial
         Accounting Standards (SFAS) No. 133 "Accounting for Derivative
         Instruments and Hedging Activities" as amended and interpreted. The
         SFAS requires all derivatives, whether designated in hedging
         relationships or not, to be recorded on the balance sheet at fair
         value. If the derivative is designated as a fair value hedge, the
         changes in the fair value of the derivative and of the hedged item
         attributable to the hedged risk are recognized in earnings. If the
         derivative is designated as a cash flow hedge, the effective portions
         of the changes in the fair value of the derivative are recorded in
         other comprehensive income and are recognized in the income statement
         when the hedge item affects earnings. Ineffective portions of changes
         in the fair value of cash flow hedges are recognized in earnings.

         The adoption of SFAS 133 resulted in an approximate $1,000 after-tax
         increase to other comprehensive income (OCI).

         The Company uses derivative instruments to hedge asset and liability
         positions and to control risk. Derivatives are not used for speculative
         purposes.

         The Company follows rigorous procedures to control interest rate risk
         and observes strict asset and liability matching guidelines. The
         Company uses interest rate futures, swaps, and caps to manage the
         impact of interest rate changes on cash flows.

         Certain investments are exposed to foreign currency risk. The Company
         uses swaps to hedge the impact of the variability in exchange rates on
         interest receipts denominated in foreign currencies.

         In addition, the Company has written call or put options on various
         convertible debt instruments to minimize the equity impact on the fair
         value of the debt instrument.

         Hedge ineffectiveness of $1,419 and $69, determined in accordance with
         SFAS 133 for the third quarter and the nine months of September 2001
         respectively, was recorded as an increase to net investment income.

<PAGE>

         Derivative gains and losses included in OCI are reclassified into
         earnings at the time interest income is recognized or interest receipts
         are received on bonds. For the third quarter and the first nine months
         of 2001, $124 and $352 of derivative gains were reclassified to net
         investment income. The Company estimates that $469 of net derivative
         gains included in OCI at September 30, 2001 will be reclassified into
         net investment income within the next twelve months.

         In September 2000, the Financial Accounting Standards Board (FASB)
         issued SFAS No. 140, "Accounting for Transfers and Servicing of
         Financial Assets and Extinguishments of Liabilities - A replacement of
         FASB Statement No. 125", which revises the standards for accounting for
         securitizations, and other transfers of financial assets and
         collateral, and requires certain disclosures. SFAS No. 140 is effective
         for transfers and servicing of financial assets and extinguishments of
         liabilities occurring after March 31, 2001. The adoption of the new
         SFAS did not have a significant effect on earnings or the financial
         position of the Company.

         On June 29, 2001 SFAS No.141, "Business Combinations" was approved by
         the FASB. SFAS No. 141 requires that the purchase method of accounting
         be used for all business combinations initiated after June 30, 2001.
         Goodwill and certain intangible assets will remain on the balance sheet
         and not be amortized. On an annual basis, and when there is reason to
         suspect that their values have been diminished or impaired, these
         assets must be tested for impairment, and write-downs may be necessary.
         The Company implemented SFAS No. 141 on July 1, 2001. Adoption of the
         Statement did not have a material impact on the Company's financial
         position or results of operations.

         On June 29, 2001, SFAS No. 142, "Goodwill and Other Intangible Assets"
         was approved by the FASB. SFAS No. 142 changes the accounting for
         goodwill and certain other intangibles from an amortization method to
         an impairment-only approach. Amortization of goodwill, including
         goodwill recorded in past business combinations, will cease upon
         adoption of this statement. The Company is required to implement SFAS
         No. 142 on January 1, 2002 and, although it is still reviewing the
         provisions of this Statement, management's preliminary assessment is
         that the Statement will not have a material impact on the Company's
         financial position or results of operations.

         In August 2001, the FASB issued SFAS No.144 "Accounting for the
         Impairment or Disposal of Long-Lived Assets" (SFAS No.144). SFAS No.144
         supercedes current accounting guidance relating to impairment of
         long-lived assets and provides a single accounting methodology for
         long-lived assets to be disposed of, and also supercedes existing
         guidance with respect to reporting the effects of the disposal of a
         business. SFAS No.144 is effective beginning January 1, 2002, with
         earlier adoption encouraged. Although management is still reviewing the
         provisions of the statement, it does not expect SFAS No.144 to have a
         material impact on the Company's financial position or results of
         operations, upon adoption.

         Effective April 1, 2001, the Company adopted Emerging Issues Task Force
         Issue No. 99-20, Recognition of Interest Income and Impairment on
         Purchased and Retained Beneficial Interest in Securitized Financial
         Assets (EITF 99-20). This pronouncement requires investors in certain
         asset-backed securities to record changes in their estimated yield on a
         prospective basis and to apply specific evaluation methods to these
         securities for an other-than-temporary decline in value. The adoption
         of EITF 99-20 did not have a material impact on the Company's financial
         position or results of operations.

         In July 2001, the SEC released Staff Accounting Bulletin No. 102,
         Selected Loan Loss Allowance Methodology and Documentation Issues (SAB
         102). SAB 102 summarizes certain of the SEC's views on the development,
         documentation and application of a systematic methodology for
         determining allowances for loan and lease losses. Adoption of SAB 102
         by the Company is not expected to have a material impact on the
         Company's financial position or results of operations.

<PAGE>


3.       OTHER

         On December 31, 2000, the Company and certain affiliated companies
         completed a corporate reorganization. Prior to December 31, 2000, GWL&A
         Financial, was an indirect wholly owned subsidiary of The Great-West
         Life Assurance Company (GWL). Under the new structure, GWL&A Financial
         and GWL each continue to be indirectly and directly, respectively,
         owned by Great-West Lifeco, Inc., a Canadian holding company (the
         Parent or Lifeco), but GWL no longer holds an equity interest in the
         Company or GWL&A Financial. Refer to the Company's report on Form 10-K
         for the year ended December 31, 2000, for additional information on the
         Company's organization.

         Effective January 1, 2000, the Company co-insured the majority of
         General American Life Insurance Company's (General American) group life
         and health insurance business that primarily consists of administrative
         services only and stop-loss policies. The agreement converted to an
         assumption reinsurance agreement on January 1, 2001. The Company
         assumed approximately $150 million of policy reserves and miscellaneous
         liabilities in exchange for an equal amount of cash and miscellaneous
         assets from General American.

         In the second quarter of 2001, the Company recorded a $127 million
         special charge, ($80.9 million, net of tax) related to its Alta Health
         & Life Insurance Company subsidiary (Alta). The principal components of
         the charge include $58 million from premium and claim receivables, $46
         million from premium deficiency reserve and $23 million from goodwill.
         Alta was acquired by the Company on July 8, 1998. During 1999 and 2000
         the Alta business continued to be run as a free-standing unit but was
         converted to the Company's system and accounting processes. This
         conversion program resulted in significant issues related to pricing,
         underwriting, and administration of the business. The Company has
         decided to discontinue writing new Alta business and all Alta customers
         will be moved to the Company's contracts over time. All Alta sales and
         administration staff have become employees of the Company and the
         underwriting functions are being conducted by the underwriting staff of
         the Company.

         On October 6, 1999, the Company entered into an agreement with
         Allmerica Financial Corporation (Allmerica) to acquire Allmerica's
         group life and health insurance business on March 1, 2000. This
         business primarily consists of administrative services only and
         stop-loss policies. The in-force business is expected to be
         under-written and retained by the Company upon each policy renewal
         date. The purchase price was based on a percentage of the premium and
         administrative fees in-force at March 1, 2000 and March 1, 2001.

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

         Certain reclassifications have been made to the 2000 financial
         statements to conform to the 2001 presentation.


<PAGE>

<TABLE>
<CAPTION>
<S>                                               <C>                 <C>               <C>                 <C>
Item 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

              Operating Summary             Three Months Ended Sept. 30,            Nine Months Ended Sept. 30,
                                         -----------------------------------     -----------------------------------
                 [Millions]                   2001               2000                2001                2000
         ----------------------------    ---------------    ----------------     --------------     ----------------

         Premium income               $           294    $            339    $            892   $           1,010
         Fee income                               250                 223                 733                 648
         Net investment income                    229                 238                 715                 696
         Realized investment
           gains                                   13                   4                  21                  14
                                         ---------------    ----------------     --------------     ----------------
         Total revenues                           786                 804               2,361               2,368

         Total benefits and
         expenses, excluding
         special charges                          672                 694               2,066               2,072
         Income tax expenses                       40                  39                 102                 104
                                         ---------------    ----------------     --------------     ----------------
         Net income
           before special charges                  74                  71                 193                 192
         Special charges (net)                                                             81
                                         ---------------    ----------------     --------------     ----------------
         Net income                   $            74    $             71    $            112   $             192
                                         ===============    ================     ==============     ================

         Deposits for investment-
           type contracts             $           208    $            229    $            581   $             583
         Deposits to separate
           accounts                               918                 780               2,559               2,452
         Self-funded premium
           equivalents                          1,370               1,346               4,346               3,843

                Balance Sheet                                                      Sept. 30,         December 31,
                 [Millions]                                                          2001                2000
         ----------------------------                                            --------------     ----------------

         Investment assets                                                   $          14,483  $           13,689
         Separate account
           assets                                                                       11,688              12,381
         Total assets                                                                   27,858              27,897
         Total policy
           benefit liabilities                                                          13,206              12,991
         Due to GWL                                                                         47                  43
         Due to GWL&A
           financial                                                                       162                 171
         Total stockholder's
           equity                                                                        1,521               1,427

</TABLE>


<PAGE>



         GENERAL

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

         The following discussion addresses the financial condition of the
         Company as of September 30, 2001, compared with December 31, 2000, and
         its results of operations for the three months and the nine months
         ended September 30, 2001, compared with the same periods last year. The
         discussion should be read in conjunction with the Management's
         Discussion and Analysis section included in the Company's report on
         Form 10-K for the year ended December 31, 2000 to which the reader is
         directed for additional information.

         CONSOLIDATED RESULTS

         The Company's consolidated net income increased $3 million or 4% for
         the third quarter of 2001 when compared to the third quarter of 2000.
         The increase reflects an increase in the Employee Benefits segment. The
         Company's consolidated net income increased $20 million or 10% for the
         first nine months of 2001 when compared to the first nine months of
         2000, before one-time charges of $80.9 million and operating losses of
         $18.7 million, net of tax, related to our Alta Health & Life Insurance
         Company subsidiary (Alta). Alta was acquired by the Company on July 8,
         1998. During 2000 and 2001 the Alta business continued to be run as a
         free-standing unit but was converted to the Company's systems and
         accounting processes. This conversion program resulted in significant
         issues related to pricing, underwriting, and administration of the
         business. The Company has decided to discontinue writing new Alta
         business and all Alta customers will be moved to the Company's
         contracts over time. All Alta sales and administration staff have
         become employees of the Company and the underwriting functions will be
         conducted by the underwriting staff of the Company.

         Total revenues decreased $18 million or 2% for the third quarter of
         2001 when compared to the third quarter of 2000. The decrease was
         comprised of decreased premium income of $44 million, offset by
         increased fee income of $26 million. There was no significant change in
         total revenues for the first nine months of 2001 compared to the first
         nine months of 2000.

         The decline in premium income is primarily in the Employee Benefits
         segment reflecting a higher level of terminations in 2001.


<PAGE>


         The growth in fee income is primarily in the Employee Benefits segment
         due to a combination of a change in the marketing agreement with New
         England and increased pricing associated with the administration
         portion of the ASO contract.

         The increase in net investment income was primarily the result of
         increasing interest rates in 2000. The actual earned rate at September
         30, 2001 was 7.59% compared to 7.41% at September 30, 2000. The earned
         rate will trend lower in the next few quarters reflecting the
         decreasing interest rate environment.

         The benefits and expenses decreased $21 million or 3% for the third
         quarter of 2001 when compared to the third quarter of 2000. The
         decrease in benefits and expenses was primarily due to a decrease in
         life and other policy benefits. There is no significant change in
         benefits and expenses for the first nine months of 2001 compared to the
         first nine months of 2000.

         Income tax expense increased $2 million or 5% and remained relatively
         unchanged for the third quarter and the nine months of 2001 when
         compared to the same period in 2000. The increase reflects higher
         pre-tax earnings for the third quarter of 2001.

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

         Deposits for separate accounts increased $107 million or 4% for the
         nine months of 2001 when compared to the nine months of 2000. The
         increase is due primarily to an increase in public/non-profit single
         premiums.

         Self-funded premium equivalents increased $503 million or 13% for the
         nine months of 2001 when compared to the nine months of 2000. The
         increase was due to the General American business ($240 million),
         Allmerica business ($155 million) and higher overall claims volume for
         the self-funded business.


<PAGE>



         SEGMENT RESULTS

         Employee Benefits

         The following is a summary of certain financial data of the Employee
         Benefits segment:
<TABLE>
<CAPTION>
<S>                                               <C>                 <C>               <C>                 <C>
              Operating Summary             Three Months Ended Sept. 30,            Nine Months Ended Sept. 30,
                                         -----------------------------------     -----------------------------------
                 [Millions]                   2001               2000                2001                2000
         ----------------------------    ---------------    ----------------     --------------     ----------------

         Premium income               $           258    $            299    $            766   $             879
         Fee income                               215                 192                 630                 557
         Net investment income                     23                  28                  70                  73
         Realized investment
           (losses) gains                           1                  (1)                  4                  (5)
                                         ---------------    ----------------     --------------     ----------------
         Total revenues                           497                 518               1,470               1,504

         Total benefits and
           expenses                               426                 458               1,315               1,346
         Income tax expenses                       26                  21                  54                  55
                                         ---------------    ----------------     --------------     ----------------
         Net income before
           special charges                         45                  39                 101                 103
         Special charges (net)                                                             81
                                         ---------------    ----------------     --------------     ----------------
         Net income                   $            45    $             39    $             20   $             103
                                         ===============    ================     ==============     ================
                                         ===============    ================     ==============     ================

         Deposits for investment-
           type contracts             $             6    $              0    $             20   $              20
         Deposits to separate
           accounts                               409                 524               1,432               1,491
         Self-funded premium
           equivalents                          1,370               1,346               4,346               3,843

</TABLE>

         Premium income decreased $41 million and $113 million for the third
         quarter and for the first nine months of 2001 when compared to the
         third quarter and the first nine months of 2000. The decreases are
         primarily due to lower group life and health membership reflecting
         higher terminations.

         Fee income increased $23 million and $73 million for the third quarter
         and for the first nine months of 2001, compared to the third quarter
         and the first nine months of 2000. The increase is due primarily to the
         amendment of the New England joint venture which is offset with higher
         operating expenses, significant price increases in the overall group
         health block of business, and fee increases from service providers.

         Total benefits and expenses decreased $32 million and $31 million for
         the third quarter and for the first nine months of 2001 when compared
         to the third quarter and the first nine months of 2000. The decrease is
         due primarily to lower claims associated with a decrease in membership.

         401(k) premiums and deposits decreased 4% for the first nine months of
         2001 (from $1,589 million to $1,526 million) when compared to the first
         nine months of 2000. Assets under administration (including third-party
         administration) in 401(k) decreased 17% over the nine months of 2001
         reflecting lower U.S. equity markets. The number of contributing
         participants increased from 551,000 at December 31, 2000 to 564,000 at
         September 30, 2001.

         Self-funded premium equivalents increased $24 million and $503 million
         for the third quarter and the first nine months of 2001 compared to the
         third quarter and the first nine months of 2000. The increase is
         primarily due to higher self-insured claims volume associated with the
         Allmerica and General American acquisitions.

<PAGE>

         The decrease in earnings for the first nine months of 2001 compared to
         a year ago is primarily related to the decision to discontinue writing
         new business for Alta Health & Life Insurance Company and the related
         $80.9 million (after tax) special charge, discussed previously.

         Financial Services

         The following is a summary of certain financial data of the Financial
         Services segment.
<TABLE>
<CAPTION>
<S>                                               <C>                 <C>                 <C>                 <C>
              Operating Summary             Three Months Ended Sept. 30,            Nine Months Ended Sept. 30,
                                         -----------------------------------     -----------------------------------
                 [Millions]                   2001               2000                2001                2000
         ----------------------------    ---------------    ----------------     --------------     ----------------

         Premium income               $            36    $             40    $            126   $             131
         Fee income                                35                  31                 103                  91
         Net investment income                    206                 210                 644                 623
         Realized investment
           gains                                   12                   5                  18                  19
                                         ---------------    ----------------     --------------     ----------------
           Total revenues                         289                 285                 891                 864

         Total benefits and
           expenses                               246                 236                 751                 726
         Income tax expenses                       14                  17                  48                  49
                                         ---------------    ----------------     --------------     ----------------
           Net income                 $            29    $             32    $             92   $              89
                                         ===============    ================     ==============     ================

         Deposits for investment-
           type contracts             $           202    $            229    $            561   $             563
         Deposits to separate
           accounts                               509                 257               1,127                 961

</TABLE>

         Net income for Financial Services decreased $3 million or 9% for the
         three months ended September 30, 2001 when compared to the same period
         last year and increased $3 million or 3% for the first nine months of
         2001 when compared to the first nine months of 2000. The $3 million
         decrease is primarily due to operating expenses exceeding growth in fee
         income. The $2 million increase is due primarily to favorable mortality
         in individual insurance.

         Savings

         Savings premiums and deposits and fees decreased $179 million (from
         $386 million to $207 million) or 46% for the three months ended
         September 30, 2001 when compared to the same period last year and
         increased $72 million (from $1,017 million to $1,089 million) or 7% for
         the first nine months of 2001 when compared to the nine months of 2000.
         The 46% decrease in the third quarter of 2001 versus the third quarter
         of 2000 primarily reflects a decrease in the deposits to separate
         accounts. The increase for the first nine months of 2001 primarily
         reflects an increase in deposits to traditional fixed annuity products.

         The Financial Services segment's core savings business is in the
         public/non-profit pension market. The assets of the public/non-profit
         pension business including separate accounts but excluding Guaranteed
         Investment Contracts increased 5.8% from December 31, 2000.

         The Financial Services segment's savings business experienced strong
         growth during the nine months of 2001. The total lives under
         administration increased from 1,002,785 at December 31, 2000, to
         1,255,266 at September 30, 2001.

         Customer participation in guaranteed separate accounts increased and
         assets under management for guaranteed separate account funds were
         $1,262 million at September 30, 2001 compared to $749 million at
         December 31, 2000.

<PAGE>

         Life Insurance

         Individual life insurance deposits and premiums and fees of $516
         million and $770 million for the third quarter and the nine months of
         2001 represent an increase of $346 million or 204% and $41 million or
         6% from the same periods last year. These increases are primarily due
         to an increase in BOLI separate account deposits. BOLI sales generally
         represent large single-deposit contracts, the timing of which can
         significantly impact individual quarters.

         GENERAL ACCOUNT INVESTMENTS

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

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

         Fixed Maturities

         Fixed maturities investments include public and privately placed
         corporate bonds, public and privately placed structured assets and
         government bonds. This latter category contains both asset-backed and
         mortgage-backed securities, including collateralized mortgage
         obligations (CMOs). The Company's strategy related to structured assets
         is to focus on those with lower volatility and minimal credit risk. The
         Company does not invest in higher risk CMOs such as interest-only and
         principal-only strips, and currently has no plans to invest in such
         securities.

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

         One of the Company's primary objectives is to ensure that its fixed
         maturity portfolio is maintained at a high average quality, so as to
         limit credit risk. If not externally rated, the securities are rated by
         the Company on a basis intended to be similar to that of rating
         agencies.

         The distribution of the fixed maturity portfolio by credit rating is
         summarized as follows:
<TABLE>
<CAPTION>
<S>                                                                      <C>                         <C>
                                                                  September 30,               December 31,
                                                                      2001                        2000
                                                              ----------------------     -----------------------

         AAA                                                              56.8  %                     53.5  %
         AA                                                                9.5  %                     10.2  %
         A                                                                14.1  %                     16.2  %
         BBB                                                              17.3  %                     19.0  %
         BB and Below (non-investment grade)                               2.3  %                      1.1  %
                                                              ----------------------     -----------------------

                                TOTAL                                    100.0  %                    100.0  %

</TABLE>

         During the nine months of 2001, net unrealized gains on fixed
         maturities included in stockholder's equity, which is net of
         policyholder-related amounts and deferred income taxes, increased
         stockholder's equity by $117 million.

<PAGE>

         LIQUIDITY AND CAPITAL RESOURCES

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

         Generally, the Company has met its operating requirements by
         maintaining appropriate levels of liquidity in its investment portfolio
         utilizing positive cash flows from operations. Liquidity for the
         Company has remained strong, as evidenced by significant amounts of
         short-term investments and cash, which totaled $600 million and $568
         million as of September 30, 2001 and December 31, 2000, respectively.

         Funds provided from premiums and fees, investment income and maturities
         of investment assets are reasonably predictable and normally exceed
         liquidity requirements for payment of claims, benefits, and expenses.
         However, since the timing of available funds cannot always be matched
         precisely to commitments, imbalances may arise when demands for funds
         exceed those on hand. Also, a demand for funds may arise as a result of
         the Company taking advantage of current investment opportunities. The
         Company's capital resources represent funds available for long-term
         business commitments and primarily consist of retained earnings and
         proceeds from the issuance of commercial paper and equity securities.
         Capital resources provide protection for policyholders and the
         financial strength to support the underwriting of insurance risks, and
         allow for continued business growth. The amount of capital resources
         that may be needed is determined by the Company's senior management and
         Board of Directors, as well as by regulatory requirements. The
         allocation of resources to new long-term business commitments is
         designed to achieve an attractive return, tempered by considerations of
         risk and the need to support the Company's existing business.

         Additional liquidity is available through the Company's participation
         in repurchase agreements with third party brokers and the issuance of
         commercial paper. The Company had $282 million of repurchase agreements
         at September 30, 2001, compared to zero at December 31, 2000. The
         Company's participation in repurchase agreements depends on current
         market conditions. Therefore, fluctuations may occur.

         The Company's financial strength provides the capacity and flexibility
         to enable it to raise funds in the capital markets through the issuance
         of commercial paper. The Company continues to be well capitalized, with
         sufficient borrowing capacity to meet the anticipated needs of its
         business. The Company had $88 million and $98 million of commercial
         paper outstanding at September 30, 2001, and December 31, 2000,
         respectively. The commercial paper has been given a rating of A-1 + by
         Standard & Poor's Corporation and a rating of P-1 by Moody's Investors
         Service, each being the highest rating available.


<PAGE>


Item 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK

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

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

         The Company also manages risk with interest rate derivatives such as
         interest rate caps that would pay the Company investment income if
         interest rates rise above the level specified in the cap. These
         derivatives are only used to reduce risk and are not used for
         speculative purposes.

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

         There are no significant changes to the Company's risk from December
         31, 2000.


<PAGE>


PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

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

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Index to Exhibits

                  None

         (b)      Reports on Form 8-K

                  A report on Form 8-K, dated July 24, 2001, was filed
                  disclosing the Company's second quarter results.

SIGNATURES

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


GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY



BY:  /s/ Glen R. Derback                               DATE:  November 14, 2001
    -------------------------------------------------       --------------------
    Glen R. Derback, Vice President and Controller
    (Duly authorized officer and chief accounting officer)