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             June 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 June 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>


                                       11
                                TABLE OF CONTENTS


Part I       FINANCIAL INFORMATION

             Item 1   Financial Statements

                      Consolidated Statements of Income

                      Consolidated Balance Sheets

                      Consolidated Statements of Cash Flows

                      Consolidated Statements of Stockholder's Equity

                      Notes to Consolidated Financial Statements

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

Part II      OTHER INFORMATION

             Item 1   Legal Proceedings

             Item 6   Exhibits and Reports on Form 8-K

             Signature



<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                  Six Months Ended
                                                             June 30,                           June 30,
                                                  -------------------------------    --------------------------------
                                                      2001             2000              2001              2000
                                                  -------------    --------------    --------------    --------------
REVENUES:
  Premium income                              $       262,900   $      318,408    $      597,330    $      671,143
  Fee income                                          231,601          213,229           482,850           424,863
  Net investment                                      244,653          228,005           485,319           458,381
  Net realized gains on investments                     1,264            9,154             8,932            10,491
                                                  -------------    --------------    --------------    --------------

                                                      740,418          768,796         1,574,431         1,564,878
                                                  -------------    --------------    --------------    --------------
BENEFITS AND EXPENSES:
  Life and other policy benefits                      246,676          287,725           531,916           569,096
  Increase (decrease) in reserves                     (12,656)           3,953            29,315            29,511
  Interest paid or credited to
    Contractholders                                   133,038          109,235           266,822           234,929
  Provision for policyholders' share of
    earnings on participating business                    723            2,176             2,311             4,454
  Dividends to policyholders                           16,165           15,341            39,526            37,972
                                                  -------------    --------------    --------------    --------------

                                                      383,946          418,430           869,890           875,962
                                                  -------------    --------------    --------------    --------------

  Commissions                                          46,951           52,660            94,230            99,080
  Operating expenses                                  213,963          176,301           416,095           378,233
  Premium taxes                                         6,447           15,683            13,586            24,432
  Special charges                                     127,040                            127,040
                                                  -------------    --------------    --------------    --------------

                                                      778,347          663,074         1,520,841         1,377,707
                                                  -------------    --------------    --------------    --------------

INCOME BEFORE INCOME TAXES                            (37,929)         105,722            53,590           187,171

PROVISION FOR INCOME TAXES:
  Current                                              44,686           24,582            57,725            37,134
  Deferred                                            (60,941)          12,765           (41,911)           28,962
                                                  -------------    --------------    --------------    --------------

                                                      (16,255)          37,347            15,814            66,096
                                                  -------------    --------------    --------------    --------------

NET INCOME (LOSS)                             $       (21,674)  $       68,375    $       37,776    $      121,075
                                                  =============    ==============    ==============    ==============

</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>
----------------------------------------------------------------------------------------------------------------------
[unaudited]

                                                                             June 30,               December 31,
ASSETS                                                                         2001                     2000
------
                                                                        --------------------    ---------------------

INVESTMENTS:

  Fixed Maturities:
    Available-for-sale, at fair value
      (amortized cost $9,637,689 and $9,372,009)                    $          9,755,527     $         9,419,865
  Mortgage loans on real estate, net                                             765,291                 843,371
  Common stock                                                                    91,748                  95,036
  Real estate, net                                                               107,378                 106,690
  Policy loans                                                                 2,906,384               2,809,973
  Short-term investments, available-for-sale
    (amortized cost $344,456 and $414,382)                                       330,635                 414,382
                                                                        --------------------    ---------------------

    Total investments                                                         13,956,963              13,689,317

  Cash                                                                           160,397                 153,977
  Reinsurance receivable                                                         226,570                 233,968
  Deferred policy acquisition costs                                              268,002                 279,688
  Investment income due and accrued                                              122,940                 139,152
  Uninsured claims receivable                                                    100,752                 227,803
  Other assets                                                                   773,325                 503,533
  Premiums in course of collection                                                90,440                 149,969
  Deferred income taxes                                                          165,490                 138,842
  Separate account assets                                                     12,673,244              12,381,137
                                                                        --------------------    ---------------------

TOTAL ASSETS                                                        $         28,538,123     $        27,897,386
                                                                        ====================    =====================

                                                                                                    (continued)


<PAGE>


GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

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

                                                                             June 30,               December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY                                           2001                     2000
------------------------------------
                                                                        --------------------    ---------------------

POLICY BENEFIT LIABILITIES:

  Policy reserves                                                   $         12,284,481     $        12,045,000
  Policy and contract claims                                                     374,638                 441,326
  Policyholders' funds                                                           245,019                 266,235
  Provision for policyholders' dividends                                          74,021                  72,716
  Undistributed earnings on participating business                               164,166                 165,754

GENERAL LIABILITIES:

  Due to GWL                                                                      20,126                  43,081
  Due to GWL&A Financial Inc.                                                    194,976                 171,347
  Repurchase agreements                                                          231,402
  Commercial paper                                                                98,701                  97,631
  Other liabilities                                                              793,528                 785,730
  Separate account liabilities                                                12,673,244              12,381,137
                                                                        --------------------    ---------------------

    Total liabilities                                                         27,154,302              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                                                     722,044                 717,704
  Accumulated other comprehensive income                                          42,409                  33,672
  Retained earnings                                                              612,336                 669,021
                                                                        --------------------    ---------------------

    Total stockholder's equity                                                 1,383,821               1,427,429
                                                                        --------------------    ---------------------
TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                          $         28,538,123     $        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]

                                                                                      Six Months Ended
                                                                                          June 30,
                                                                        ---------------------------------------------
                                                                               2001                     2000
                                                                        --------------------    ---------------------
OPERATING ACTIVITIES:

  Net income                                                        $             37,776     $           121,075
  Adjustments to reconcile net income to net cash
    provided by operating activities:
    Gain allocated to participating policyholders                                  2,311                   4,454
    Amortization of investments                                                  (38,330)                (25,395)
    Realized (losses) gains on disposal of investments
      and write-downs of mortgage loans and real estate                           (8,932)                (10,491)
    Amortization                                                                  24,519                  25,361
    Deferred income taxes                                                        (41,911)                 28,962
  Changes in assets and liabilities:
    Policy benefit liabilities                                                   111,767                 300,142
    Reinsurance receivable                                                         7,398                  (3,959)
    Accrued interest and other receivables                                       202,792                 (51,783)
    Write-off of Goodwill                                                         23,040
    Other, net                                                                  (280,175)                 56,546
                                                                        --------------------    ---------------------

    Net cash provided by operating activities                                     40,255                 444,912
                                                                        --------------------    ---------------------

INVESTING ACTIVITIES:

  Proceeds from sales, maturities, and redemptions of investments: Fixed
    maturities:
      Held-to-maturity
        Maturities and redemptions                                                                       212,164
      Available-for-sale
        Sales                                                                  2,747,351                 666,969
        Maturities and redemptions                                               629,040                 436,865
    Mortgage loans                                                                76,757                  67,751
    Real estate                                                                  103,038                   6,863
    Common stock                                                                  19,600                  12,102
  Purchases if investments:
    Fixed maturities
      Held-to-maturity                                                        (3,532,344)                (85,433)
      Available-for-sale                                                                              (1,314,985)
    Mortgage loans                                                                                        (1,917)
    Real estate                                                                 (104,407)                (20,439)
    Common stock                                                                 (24,769)                (24,796)
                                                                        --------------------    ---------------------

    Net cash used in investing activities                                        (85,734)                (44,856)
                                                                        --------------------    ---------------------



                                                                                                    (continued)


<PAGE>


GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

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

                                                                                      Six Months Ended
                                                                                          June 30,
                                                                        ---------------------------------------------
                                                                               2001                     2000
                                                                        --------------------    ---------------------
FINANCING ACTIVITIES:

  Contract withdrawals, net of deposits                             $            (86,787)    $          (283,662)
  Net GWL repayments                                                             (22,955)                 (2,191)
  Net GWL&A Financial borrowings                                                  23,629
  Dividends paid                                                                 (94,461)                (57,775)
  Commercial paper borrowings                                                      1,070                  99,128
  Repurchase agreements borrowings (repayments)                                  231,402                 (80,579)
                                                                        --------------------    ---------------------

    Net cash provided by (used in) financing activities                           51,898                (325,079)
                                                                        --------------------    ---------------------

NET INCREASE IN CASH                                                               6,420                  74,977

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

CASH, END OF PERIOD                                                 $            160,397     $           342,491
                                                                        ====================    =====================

See notes to consolidated financial statements.                                                     (Concluded)

</TABLE>

<PAGE>


GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

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

---------------------------------------------------------------------------------------------------------
[Unaudited]

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

  Net income                                                                                                                37,776
  Other comprehensive                                                                                        8,737
     income

Total comprehensive
     income

Dividends                                                                                                                  (94,461)
Income tax benefit on
  stock compensation                                                                     4,340
                         ----------     ---------     -----------    ------------    -----------     ---------------     -----------

BALANCE, JUNE 30, 2001         0    $          0      7,032,000   $      7,032    $    722,044   $          42,409   $     612,336
                         ==========     =========     ===========    ============    ===========     ===============     ===========



                                          Total
                                       -----------
BALANCE, JANUARY 1, 2001            $   1,427,429

  Net income                               37,776
  Other comprehensive                       8,737
     income
                                       -----------
Total comprehensive                        46,513
     income
                                       -----------
Dividends                                 (94,461)
Income tax benefit on
  stock compensation                        4,340
                                       -----------

BALANCE, JUNE 30, 2001              $   1,383,821
                                       ===========


</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 six months ended June 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 $1,008 and $1,350, determined in accordance
         with SFAS 133 for the second quarter and the first six months of June
         2001, was recorded in 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 second quarter and the first six months
         of 2001, $87 and $228 of derivative gains were reclassified to net
         investment income. The Company estimates that $457 of net derivative
         gains included in OCI 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 will be
         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 Statement of Financial Accounting Standards (SFAS) No.
         141, "Business Combinations" was approved by the Financial Accounting
         Standards Board (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.

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 $150,000 of policy reserves and
         miscellaneous liabilities in exchange for an equal amount of cash and
         miscellaneous assets from General American.

         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
         underwritten 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.

         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. The principal components of the
         charge include $58 million from Premiums and Claims, $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 will be conducted by the underwriting staff of
         the Company.

         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 June 30,              Six Months Ended June 30,
                                         -----------------------------------     -----------------------------------
                 [Millions]                   2001               2000                2001                2000
         ----------------------------    ---------------    ----------------     --------------     ----------------

         Premium income               $           263    $            318    $            597   $             671
         Fee income                               231                 213                 483                 425
         Net investment income                    245                 228                 485                 458
         Realized investment
           Gains                                    1                  10                   9                  10
                                         ---------------    ----------------     --------------     ----------------
         Total revenues                           740                 769               1,574               1,565

         Total benefits and
         expenses, excluding
         special charges                          651                 663               1,394               1,378
         Income tax expenses                       30                  37                  62                  66
                                         ---------------    ----------------     --------------     ----------------
         Net income
           before special charges                  59                  68                 119                 121
         Special charges (net)                     81                                      81
                                         ---------------    ----------------     --------------     ----------------
         Net income (loss)            $           (22)   $             68    $             38   $             121
                                         ===============    ================     ==============     ================

         Deposits for investment-
           type contracts             $           176    $            184    $            374   $             354
         Deposits to separate
           Accounts                               686               1,010               1,642               1,671
         Self-funded premium
           Equivalents                          1,426               1,309               2,976               2,497

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

         Investment assets                                                   $          13,957  $           13,689
         Separate account
           Assets                                                                       12,673              12,381
         Total assets                                                                   28,538              27,897
         Total policy
           benefit liabilities                                                          12,978              12,757
         Due to GWL                                                                         20                  43
         Due to GWL&A
           Financial                                                                       195                 171
         Total stockholder's
           Equity                                                                        1,384               1,427
</TABLE>

         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 June 30, 2001, compared with December 31, 2000, and its
         results of operations for the three months and six months ended June
         30, 2001, compared with the same period 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 decreased $9 million or 13% and
         $2 million or 2% for the second quarter and first six months of 2001
         when compared to the second quarter and first six months of 2000. The
         decrease reflects a decrease of $8 million and $9 million for the
         second quarter and first six months of 2001 in the Employee Benefits
         segment that resulted primarily from unfavorable morbidity and
         mortality. These results are 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. The Company acquired Alta
         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 will be
         conducted by the underwriting staff of the Company.

         Total revenues decreased $28 million or 4% and increased $10 million or
         1% for the second quarter and first six months of 2001 when compared to
         the second quarter and first six months of 2000. The decline in
         revenues for the second quarter and the increase for the first six
         months of 2001 was comprised of decreased premium income of $56 million
         and $74 million, and decreased realized gains on investments of $8
         million and $2 million. This was partially offset by fee income that
         increased $18 million and $58 million and net investment income that
         increased $17 million and $27 million for the second quarter and the
         first six months of 2001, when compared to the second quarter and first
         six months of 2000.

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

         Realized investment gains decreased $9 million during the second
         quarter of 2001 compared to the same period last year. Realized
         investment gains decreased $2 million during the first six months of
         2001 compared to the same period last year. The majority of the
         decrease is from gains of $7 million and $8 million from the sale of
         common stock during the second quarter and first six months of 2000
         compared to $16 thousand and $600 thousand during the same periods this
         year.

         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 June 30,
         2001 was 7.38% compared to 7.04% at June 30, 2000.

         The benefits and expenses decreased $12 million or 2% and increased $16
         million or 1% for the second quarter and the first six months of 2001
         when compared to the second quarter and first six months of 2000. The
         growth in benefits and expenses was primarily due to an increase in
         operating expenses.

         Income tax expense decreased $7 million or 19% and $4 million or 6% for
         the second quarter and the first six months of 2001 when compared to
         the same period in 2000. The decrease reflects lower pre-tax earnings
         for the second quarter and the first six months 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 investment-type contracts increased $20 million or 6% for
         the six months of 2001 when compared to the six months of 2000. This
         increase is primarily attributable to the Financial Services segment,
         where the Company has experienced growth in premium for fixed annuity
         products due to the impact of the higher volatility in the variable
         marketplace.

         Deposits for separate accounts decreased $29 million or 2% for the six
         months of 2001 when compared to the six months of 2000. The decrease is
         due primarily to, decreased sales in the 401(k) line of business and
         decreased public/non-profit single premiums.

         Self-funded premium equivalents increased $479 million or 19% for the
         six months of 2001 when compared to the six months of 2000. The
         increase was due to the General American business ($196 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 June 30,              Six Months Ended June 30,
                                         -----------------------------------     -----------------------------------
                 [Millions]                   2001               2000                2001                2000
         ----------------------------    ---------------    ----------------     --------------     ----------------

         Premium income               $           226    $            277    $            508   $             579
         Fee income                               199                 182                 415                 365
         Net investment income                     22                  22                  47                  46
         Realized investment
           gains (losses)                           1                  (1)                  3                  (3)
                                         ---------------    ----------------     --------------     ----------------
         Total revenues                           448                 480                 973                 987

         Total benefits and
           Expenses                               406                 423                 889                 888
         Income tax expenses                       13                  20                  28                  34
                                         ---------------    ----------------     --------------     ----------------
         Net income before
           special charges                         29                  37                  56                  65
         Special charges (net)                     81                                      81
                                         ---------------    ----------------     --------------     ----------------
         Net income (loss)            $           (52)   $             37    $            (25)  $              65
                                         ===============    ================     ==============     ================
                                         ===============    ================     ==============     ================


         Deposits for investment-
           type contracts             $             7    $              5    $             14   $              20
         Deposits to separate
           Accounts                               431                 503               1,023                 967
         Self-funded premium
           Equivalents                          1,426               1,309               2,976               2,497
</TABLE>

         Fee income increased $17 million and $50 million for the second quarter
         and for the first six months of 2001, compared to the second quarter
         and the first six months of 2000. The increase is due primarily to the
         restructuring of the New England joint venture which is offset with
         higher operating expenses, as well as price increases in the overall
         group health block of business.

         Total benefits and expenses decreased $17 million and increased $1
         million for the second quarter and for the first six months of 2001
         when compared to the six months of 2000. The increase is due primarily
         to unfavorable morbidity in the group health business and higher
         operating expenses.

         401(k) premiums and deposits increased 5% for the first six months of
         2001 (from $1,038 million to $1,088 million) when compared to the six
         months of 2000. Assets under administration (including third-party
         administration) in 401(k) decreased 4.8% over the first six months of
         2001 reflecting lower U.S. equity markets. The number of contributing
         participants increased from 551,000 at December 31, 2000 to 562,800 at
         June 30, 2001.

         Self-funded premium equivalents increased $117 million and $479 million
         for the second quarter and the first six months of 2001 compared to the
         second quarter and first six months of 2000. The increase is primarily
         due to higher self-insured claims volume.

         The decrease in earnings for the first six months of 2001 compared to a
         year ago was primarily related to the decision to discontinue writing
         new business for Alta Health & Life Insurance Company and the related
         $81 million (after tax) special charge, discussed previously.



<PAGE>


         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 June 30,              Six Months Ended June 30,
                                         -----------------------------------     -----------------------------------
                 [Millions]                   2001               2000                2001                2000
         ----------------------------    ---------------    ----------------     --------------     ----------------

         Premium income               $            38    $             41    $             90   $              92
         Fee income                                33                  31                  68                  59
         Net investment income                    222                 206                 438                 413
         Realized investment
           Gains                                                       10                   6                  14
                                         ---------------    ----------------     --------------     ----------------
           Total revenues                         293                 288                 602                 578

         Total benefits and
           Expenses                               245                 240                 505                 490
         Income tax expenses                       17                  17                  34                  32
                                         ---------------    ----------------     --------------     ----------------
           Net income                 $            31    $             31    $             63   $              56
                                         ===============    ================     ==============     ================

         Deposits for investment-
           type contracts             $           168    $            178    $            359   $             334
         Deposits to separate
           Accounts                               292                 507                 618                 704
</TABLE>

         Net income for Financial Services was unchanged for the three months
         ended June 30, 2001 when compared to the same period last year and
         increased $7 million or 13% for the six months of 2001 when compared to
         the six months of 2000, due primarily to improved mortality in
         individual insurance and increased interest margins on public
         non-profit business.

         Savings

         Savings premiums and deposits increased $80 million (from $287 million
         to $367 million) for the three months ended June 2001 when compared to
         the same period last year and increased $251 million (from $631 million
         to $882 million) or 40% for the first six months of 2001 when compared
         to the first six months of 2000, which reflects primarily growth in
         deposits to separate accounts ($150 million) and growth in deposits to
         traditional fixed annuity products ($93 million).

         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 2.6% from December 31, 2000.

         The Financial Services segment's savings business experienced strong
         growth during the first six months of 2001. The total lives under
         administration increased from 1,002,785 at December 31, 2000, to
         1,222,240 at June 30, 2001.

         Customer participation in guaranteed separate accounts increased and
         assets under management for guaranteed separate account funds were
         $1,173 million at June 30, 2001 compared to $749 million at December
         31, 2000.

         Life Insurance

         Individual life insurance revenues and premiums of $126 million and
         $254 million for the second quarter and first six months of 2001
         represent a decrease of $345 million or 73% and $305 million or 55%
         from the same periods last year. These decreases are primarily due to a
         decrease in BOLI separate account deposits.



<PAGE>


         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>

                                                                    June 30,                  December 31,
                                                                      2001                        2000
                                                              ----------------------     -----------------------

         AAA                                                              55.5  %                     53.5  %
         AA                                                                9.3  %                     10.2  %
         A                                                                14.7  %                     16.2  %
         BBB                                                              18.0  %                     19.0  %
         BB and Below (non-investment grade)                               2.5  %                      1.1  %
                                                              ----------------- ----     ------------------ ----


                                TOTAL                                    100.0  %                    100.0  %
</TABLE>

         During the first six months of 2001, net realized 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 $9 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 $491 million and $568
         million as of June 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. The Company had $231
         million of repurchase agreements at June 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 $98.7 million and $97.6 million of commercial
         paper outstanding at June 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>


PART II - OTHER INFORMATION

ITEM 1 - LEGAL PROCEEDINGS

         The Company is involved in various legal proceedings that arise in the
         ordinary course of its business, the resolution of which should not
         have a material adverse effect on its financial position or results of
         operations.

ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K

         (a)      Index to Exhibits

                  None

         (b)      Reports on Form 8-K

                  None

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:          August 14, 2001
          -------------------------------------           ----------------------
          Glen R. Derback, Vice President and Controller
          (Duly authorized officer and chief accounting officer)