UNITED STATES

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

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

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

OR

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

For the transition period from                                               to
                                          --------------------------------          ----------------------------------

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

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

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


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

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

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

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

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

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

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

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


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                                TABLE OF CONTENTS


Part I       FINANCIAL INFORMATION                                                                            Page
                                                                                                           -----------
<S>               <C>                                                                                          <C>
             Item 1   Financial Statements                                                                     3

                      Consolidated Statements of Income (Unaudited)                                            3

                      Consolidated Balance Sheets (Unaudited)                                                  4

                      Consolidated Statements of Cash Flows (Unaudited)                                        6

                      Consolidated Statement of Stockholder's Equity (Unaudited)                               8

                      Notes to Consolidated Financial Statements (Unaudited)                                   9

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

             Item 3   Quantitative and Qualitative Disclosures About Market Risk                               24

             Item 4   Controls and Procedures                                                                  25

Part II      OTHER INFORMATION                                                                                 25

             Item 1   Legal Proceedings                                                                        25

             Item 4   Submission of Matters to a Vote of Security Holders                                      25

             Item 6   Exhibits                                                                                 25

             Signature                                                                                         25
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PART I     FINANCIAL INFORMATION

ITEM 1.    FINANCIAL STATEMENTS

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



                                                     Three Months Ended                    Six Months Ended
                                                          June 30,                             June 30,
                                              ---------------------------------    ---------------------------------
REVENUES:                                          2005              2004               2005               2004
                                              ---------------   ---------------    ---------------    ---------------
<S>                                               <C>               <C>              <C>                <C>
Premiums:
  Related party (net of premiums
    ceded totaling $1,223,
    $1,048, $2,579 and
    $258,203)                              $       57,753     $      41,773     $      103,920     $      (99,789)
  Other (net of premiums ceded
    totaling $80,496, $111,280,
    $135,458 and $182,538)                        170,442           159,149            446,246            377,596
Fee income                                        236,833           230,623            475,292            441,179
Net investment income                             292,106           238,223            549,104            519,461
Net realized gains (losses) on
  investments                                      68,476           (11,466)            59,822             29,310
                                              ---------------   ---------------    ---------------    ---------------
   Total revenue                                  825,610           658,302          1,634,384          1,267,757
                                              ---------------   ---------------    ---------------    ---------------
BENEFITS AND EXPENSES:
Life and other policy benefits
  (net of reinsurance recoveries
  totaling $71,579, $104,500,
 $126,077 and $192,915)                           270,497           236,124            537,780            472,152
Increase (decrease) in reserves:
  Related party                                   (88,965)         (161,754)          (149,940)          (216,565)
  Other                                            67,956           100,078            160,746            (46,708)
Interest paid or credited to
  contractholders                                 118,698           127,449            237,707            254,809
Provision for policyholders' share
  of earnings on participating
  business                                          1,407             1,962              1,746              6,551
Dividends to policyholders                         21,545            20,469             57,671             57,476
                                              ---------------   ---------------    ---------------    ---------------
   Total benefits                                 391,138           324,328            845,710            527,715
Commissions                                        47,573            47,641             92,743             98,950
Operating expenses                                187,815           191,032            372,215            386,802
Premium taxes                                      10,866             7,691             20,392             14,958
                                              ---------------   ---------------    ---------------    ---------------
   Total benefits and expenses                    637,392           570,692          1,331,060          1,028,425
                                              ---------------   ---------------    ---------------    ---------------
INCOME BEFORE INCOME
  TAXES                                           188,218            87,610            303,324            239,332
PROVISION FOR INCOME
  TAXES:
   Current                                         73,679            29,567             81,082             92,798
   Deferred                                       (13,893)           (2,216)            13,040            (13,782)
                                              ---------------   ---------------    ---------------    ---------------
                                                   59,786            27,351             94,122             79,016
                                              ---------------   ---------------    ---------------    ---------------
NET INCOME                                 $      128,432     $      60,259     $      209,202     $      160,316
                                              ===============   ===============    ===============    ===============

See notes to consolidated financial statements.

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

                                                                             June 30,               December 31,
ASSETS                                                                         2005                     2004
                                                                        --------------------    ---------------------
<S>                                                                 <C>                      <C>
INVESTMENTS:
  Fixed maturities available-for-sale, at fair value
   (amortized cost $13,830,028 and $12,909,455)                     $         14,177,421     $        13,215,042
  Mortgage loans on real estate (net of allowances
   of $13,705 and $23,889)                                                     1,524,538               1,543,507
  Equity investments, at fair value (cost $648,662 and
   $591,474)                                                                     659,597                 637,434
  Policy loans                                                                 3,654,410               3,548,225
  Short-term investments, available-for-sale
   (cost approximates fair value)                                                949,956                 708,801
                                                                        --------------------    ---------------------
    Total investments                                                         20,965,922              19,653,009

OTHER ASSETS:
  Cash                                                                            76,272                 110,518
  Reinsurance receivable
   Related party                                                                 592,279               1,072,940
   Other                                                                         250,605                 260,409
  Deferred policy acquisition costs                                              305,031                 301,603
  Deferred ceding commission                                                      75,233                  82,648
  Investment income due and accrued                                              142,281                 159,398
  Amounts receivable related to uninsured accident
   and health plan claims (net of allowances of
   $20,650 and $22,938)                                                          140,039                 144,312
  Premiums in course of collection (net of allowances
   of $5,924 and $7,751)                                                         113,995                  95,627
  Deferred income taxes                                                          123,024                 138,845
  Collateral for securities lending program                                      323,441                 349,913
  Due from GWL&A Financial Inc.                                                   16,074                  55,915
  Other assets                                                                   486,554                 485,357
SEPARATE ACCOUNT ASSETS                                                       13,934,136              14,155,397
                                                                        --------------------    ---------------------

TOTAL ASSETS                                                        $         37,544,886     $        37,065,891
                                                                        ====================    =====================







                                                                                                    (Continued)




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


                                                                             June 30,               December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY                                           2005                     2004
                                                                        --------------------    ---------------------
POLICY BENEFIT LIABILITIES:
  Policy reserves:
    Related party                                                   $          5,020,966     $         5,170,447
    Other                                                                     13,202,103              12,771,872
  Policy and contract claims                                                     382,504                 360,862
  Policyholders' funds                                                           342,344                 327,409
  Provision for policyholders' dividends                                         117,258                 118,096
  Undistributed earnings on participating business                               192,652                 192,878

GENERAL LIABILITIES:
  Due to The Great-West Life Assurance Company                                    32,483                  26,659
  Due to GWL&A Financial Inc.                                                    195,869                 194,164
  Repurchase agreements                                                          878,240                 563,247
  Commercial paper                                                                78,573                  95,044
  Payable under securities lending agreements                                    323,441                 349,913
  Other liabilities                                                              741,873                 695,542
SEPARATE ACCOUNT LIABILITIES                                                  13,934,136              14,155,397
                                                                        --------------------    ---------------------
    Total liabilities                                                         35,442,442              35,021,530
                                                                        --------------------    ---------------------

COMMITMENTS AND CONTINGENCIES                                                        -                       -

STOCKHOLDER'S EQUITY:
  Preferred stock, $1 par value, 50,000,000 shares
    authorized; 0 shares issued and outstanding                                      -                       -
  Common stock, $1 par value; 50,000,000 shares
    authorized; 7,032,000 shares issued and outstanding                            7,032                   7,032
  Additional paid-in capital                                                     727,246                 725,935
  Accumulated other comprehensive income                                         126,932                 118,795
  Retained earnings                                                            1,241,234               1,192,599
                                                                        --------------------    ---------------------
    Total stockholder's equity                                                 2,102,444               2,044,361
                                                                        --------------------    ---------------------

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY                          $         37,544,886     $        37,065,891
                                                                        ====================    =====================






See notes to consolidated financial statements.                                                     (Concluded)





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


                                                                        ---------------------------------------------
                                                                                 Six Months Ended June 30,
                                                                        ---------------------------------------------
OPERATING ACTIVITIES:                                                          2005                     2004
                                                                        --------------------    ---------------------
  Net income                                                        $         209,202        $        160,316
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
   Earnings allocated to participating policyholders                            1,746                   6,551
   Amortization of investments                                                (28,206)                 26,408
   Net realized gains on investments
    and write-downs of mortgage loans and real estate                         (59,822)                (29,310)
   Depreciation and amortization                                               39,202                  32,873
   Deferral of acquisition costs                                              (25,090)                (25,857)
   Deferred income taxes                                                       13,040                 (13,782)
  Changes in assets and liabilities:
   Policy benefit liabilities                                                 (60,738)               (167,822)
   Reinsurance receivable                                                      22,342                 108,482
   Accrued interest and other receivables                                       7,304                  35,875
   Other, net                                                                (163,573)                (68,646)
                                                                        --------------------    ---------------------

    Net cash (used in) provided by operating activities                       (44,593)                 65,088
                                                                        --------------------    ---------------------

INVESTING ACTIVITIES:
  Proceeds from sales, maturities and redemptions
   of investments:
   Fixed maturities available-for-sale:
    Sales                                                           $       3,468,630        $      6,037,673
    Maturities and redemptions                                              5,448,921               1,125,872
   Mortgage loans on real estate                                              185,325                 177,231
   Common stock                                                                84,786                  46,130
  Purchases of investments:
   Fixed maturities available-for-sale                                     (9,395,466)             (6,985,790)
   Mortgage loans on real estate                                              (14,317)                 (8,003)
   Common stock                                                               (89,809)                112,390
  Net change in short-term investments                                       (241,155)               (271,296)
  Other, net                                                                   76,632                (158,970)
                                                                        --------------------    ---------------------

    Net cash (used in) provided by investing activities             $        (476,453)       $         75,237
                                                                        --------------------    ---------------------







                                                                                                    (Continued)




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



                                                                                 Six Months Ended June 30,
                                                                        -------------------- -- ---------------------
FINANCING ACTIVITIES:                                                          2005                     2004
                                                                        --------------------    ---------------------
  Net contract deposits (withdrawals)                               $         280,226        $       (159,103)
  Change in due to The Great-West Life Assurance
     Company                                                                    5,824                  (2,191)
  Change in due to GWL&A Financial Inc.                                        41,546                 (47,505)
  Dividends paid                                                             (160,567)                (47,887)
  Net commercial paper (repayments) borrowings                                (16,471)                    837
  Change in bank overdrafts                                                    21,249                   3,070
  Net repurchase agreements borrowings                                        314,993                  77,156
                                                                        --------------------    ---------------------

    Net cash provided by (used in) financing activities                       486,800                (175,623)
                                                                        --------------------    ---------------------

NET DECREASE IN CASH                                                          (34,246)                (35,298)

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

CASH, END OF PERIOD                                                 $          76,272        $        153,031
                                                                        ====================    =====================


SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION

  Cash paid during the periods for:
   Income taxes                                                     $             11,466     $         74,705
   Interest                                                                        8,520                7,839







See notes to consolidated financial statements.                                                     (Concluded)

</TABLE>


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<CAPTION>



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


====================================================================================================================================

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

  Net income                                                                                                   209,202      209,202
  Other comprehensive income                                                           8,296        (159)                     8,137
                                                                                                                          ---------
   Total comprehensive income                                                                                               217,339
                                                                                                                          ---------
  Dividends                                                                                                   (160,567)    (160,567)
  Income tax benefit on stock
   compensation                                                            1,311                                              1,311

                               --------  -------- --------   --------   ---------  ----------   ----------   ----------   ---------
BALANCE, JUNE 30, 2005              -  $      -     7,032  $   7,032  $  727,246  $  141,842  $  (14,910)  $ 1,241,234  $ 2,102,444
                               ========  ======== ========   ========   =========  ==========   ==========   ==========   =========





See notes to consolidated financial statements.
</TABLE>



                   GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                 (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 notes required for complete
         financial statements. However, in the opinion of management, these
         statements include all normal recurring adjustments necessary for a
         fair presentation of the results. These financial statements should be
         read in conjunction with the audited consolidated financial statements
         and the accompanying notes included in the Company's latest annual
         report on Form 10-K for the year ended December 31, 2004.

         Operating results for the six months ended June 30, 2005 are not
         necessarily indicative of the results that may be expected for the full
         year ending December 31, 2005.

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

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

<TABLE>
<CAPTION>

                                                      Three Months Ended June 30,            Six Months Ended June 30,
                                                   -----------------------------------    --------------------------------
                                                        2005                2004              2005               2004
                                                   ---------------      --------------    --------------     -------------
<S>                                            <C>                 <C>                 <C>               <C>
        Net income, as reported                $     128,432       $       60,259      $   209,202       $      160,316
        Less compensation for fair
           value of stock options, net
           of related tax effects                         648                 900            1,488
                                                                                                                  1,920
                                                   ---------------      --------------    --------------     -------------
        Proforma net income                    $     127,784       $       59,359      $   207,714       $      158,396
                                                   ===============      ==============    ==============     =============
</TABLE>

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

2.       NEW ACCOUNTING PRONOUNCEMENTS

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

         In December 2002, Statement of Financial Accounting Standards No. 148
         "Accounting for Stock-Based Compensation - Transition and Disclosure"
         ("SFAS No. 148") was issued by the FASB. SFAS No. 148 amends the
         disclosures that a company is required to make in its annual financial
         statements and requires certain disclosures in interim financial
         reports. In addition to the disclosures required by SFAS No. 123, a
         company must disclose additional information as part of its Summary of
         Significant Accounting Policies. These disclosures are required
         regardless of whether a company is using the intrinsic value method
         under APB No. 25 or the fair value based method under SFAS No. 123 to
         account for its stock-based employee compensation. In December 2004,
         SFAS No. 123R was issued by the FASB. SFAS 123R replaces SFAS 123 and
         supersedes APB No. 25. SFAS 123R requires a company to use the fair
         value method to account for its stock-based employee compensation and
         to provide certain other additional disclosures. Previously, the
         Company elected to only disclose the impact of recording the fair value
         of stock options in the notes to its consolidated financial statements.
         The Company will adopt the provisions of SFAS 123R on January 1, 2006
         and does not expect this statement to have a material effect on its
         consolidated financial position or results of operations.

         In January 2004, the FASB issued Emerging Issues Task Force Issue No.
         03-1, "The Meaning of Other-Than-Temporary Impairment and Its
         Application to Certain Investments" ("EITF 03-1"). EITF 03-1 provides
         guidance on the disclosure requirements, which were effective as of
         December 31, 2003, for other-than-temporary impairments of debt and
         marketable equity investments that are accounted for under SFAS No.
         115, "Accounting for Certain Investments in Debt and Equity Securities"
         ("SFAS 115"). EITF 03-1 also included guidance on the measurement and
         recognition of other-than-temporary impairments of certain investments,
         which was originally going to be effective during the quarter ended
         September 30, 2004. However, in response to various concerns raised by
         financial statement preparers and others, the measurement and
         recognition provisions of EITF 03-1 were delayed. On June 29, 2005, the
         FASB staff announced its intention to issue FASB Staff Position 115-1
         ("FSP 115-1"). When issued, FSP 115-1 will replace the guidance set
         forth in paragraphs 10-18 of EITF 03-1 with new interpretations of
         existing measurement and recognition guidance. FSP 115-1 is expected to
         be effective for periods beginning after September 15, 2005. The
         Company is evaluating the impact the adoption of FSP 115-1 will have on
         its financial position and results of operations.

  3.     RELATED-PARTY TRANSACTIONS

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

         On February 29, 2004, CLAC recaptured the group life and health
         business from the Company associated with the original Indemnity
         Reinsurance Agreement dated August 31, 2003. The Company recorded an
         income statement impact of $256,000 of negative premium income and
         change in reserves associated with these policies. The Company also
         recorded, at fair value, the following at February 29, 2004 as a result
         of this transaction:

<TABLE>
<CAPTION>

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


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

<TABLE>
<CAPTION>

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

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

         On November 15, 2004, the Company issued a surplus note to its parent
         company, GWL&A Financial Inc. ("GWL&A Financial") with a face amount of
         $195,000 and carrying amounts of $194,169 and $194,164 at June 30, 2005
         and December 31, 2004, respectively. The surplus note bears interest at
         the rate of 6.675% per annum, payable in arrears on each May 14 and
         November 14, and matures on November 14, 2034. On December 16, 2004,
         the Company used the proceeds from the sale of the surplus note to
         redeem its $175,000 subordinated note payable to GWL&A Financial and
         for general corporate purposes.

         The Company's separate accounts offer mutual funds or other investment
         options that, beginning in 2005, purchase guaranteed interest annuity
         contracts issued by the Company. For the six months ended June 30, 2005
         these purchases totaled $334,414. As the general account investment
         contracts are also included in the separate account balances, the
         Company has reduced the separate account assets and liabilities by
         $311,522 at June 30, 2005 to avoid the overstatement of assets and
         liabilities in its consolidated balance sheet.

4.       IMPAIRMENT OF FIXED MATURITY AND EQUITY INVESTMENTS

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

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

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

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

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

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

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

         During the three months ended June 30, 2005 and 2004, the Company
         recorded other-than-temporary impairments in the fair value of its
         fixed maturity investments of $240 and $0, respectively. During the six
         months ended June 30, 2005 and 2004, the Company recorded
         other-than-temporary impairments in the fair value of its fixed
         maturity investments of $4,432 and $3,162, respectively. No impairments
         were recorded on equity securities for any of the three or six-month
         periods ended June 30, 2005 or 2004.

5.       REINSURANCE

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

6.       COMPONENTS OF NET PERIODIC BENEFIT COST

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

<TABLE>
<CAPTION>

                                                   Three Months Ended June 30,            Three Months Ended June 30,
                                               ------------------------------------    -----------------------------------
                                                     2005                2004              2005                2004
                                               -----------------    ---------------    -------------     -----------------
                                                                                                Post-Retirement
                                                        Pension Benefits                          Medical Plan
                                               ------------------------------------    -----------------------------------
<S>                                         <C>                  <C>                <C>               <C>
        Service cost                        $        2,124       $       2,144      $         596     $          722
        Interest cost                                3,634               3,329                605                684
        Expected return on plan
           assets                                   (3,902)             (3,733)                -                   -
        Amortization of transition
           obligation                                 (379)               (379)                -                   -
        Amortization of
           unrecognized prior
           service cost                                158                 158               (467)              (178)
        Amortization of gains from
           earlier periods                           1,009                 688                113                166
                                               ----------------     ---------------    -------------     -----------------
        Net periodic benefit cost           $        2,644       $       2,207      $          847    $        1,394
                                               ================     ===============    =============     =================



                                                    Six Months Ended June 30,              Six Months Ended June 30,
                                               ------------------------------------    -----------------------------------
                                                    2005                2004               2005                2004
                                               ----------------    ----------------    -------------      ----------------
                                                                                                Post-Retirement
                                                        Pension Benefits                          Medical Plan
                                               ------------------------------------    -----------------------------------
        Service cost                        $       4,274       $       4,288       $       1,404    $          1,444
        Interest cost                               7,329               6,658               1,347               1,368
        Expected return on plan
           assets                                  (7,804)             (7,466)                -                   -

        Amortization of transition
           obligation                                (758)               (758)                -                   -

        Amortization of
           unrecognized prior
           service cost                               316                 316                (645)               (356)
        Amortization of gains from
           earlier periods                          2,123               1,376                 277                 332
                                               ---------------     ----------------    -------------      ----------------
        Net periodic benefit cost           $       5,480       $       4,414       $       2,383    $          2,788
                                               ===============     ================    =============      ================

</TABLE>

         The Company does not expect to make contributions to its pension plan
         during the year ended December 31, 2005.

7.       SEGMENT INFORMATION

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

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

<TABLE>
<CAPTION>

                                                     Three Months Ended June 30,             Six Months Ended June 30,
                                                  -----------------------------------     ---------------------------------
                                                      2005                2004                 2005               2004
                                                  --------------     ----------------     ---------------     -------------
<S>                                            <C>                <C>                 <C>                 <C>
         Premium income                        $    144,059       $       92,260      $      330,546      $       31,889
         Fee income                                 163,275              163,581             328,881             307,682
         Net investment income                       16,965                9,365              30,420              25,754
         Net realized investment
          gains (losses)                              20,323              (1,436)             21,055               5,724
                                                  --------------     ----------------     ---------------     -------------
         Total revenues                             344,622              263,770             710,902             371,049
         Total benefits and expenses                266,818              222,045             573,912             260,930
         Income tax expenses                          26,441              13,520              44,739              36,650
                                                  --------------     ----------------     ---------------     -------------
         Net income                            $      51,363      $       28,205      $       92,251      $       73,469
                                                  ==============     ================     ===============     =============

</TABLE>


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

<TABLE>
<CAPTION>

                                                    Three Months Ended June 30,             Six Months Ended June 30,
                                                 -----------------------------------     ---------------------------------
                                                     2005                2004                 2005               2004
                                                 --------------     ----------------     ---------------     -------------
<S>                                           <C>                <C>                 <C>                 <C>
         Premium income                       $       84,136     $      108,662      $      219,620      $      245,918
         Fee income                                   73,558             67,043             146,411             133,497
         Net investment income                       275,141            228,857             518,684             493,707
         Net realized investment
          gains (losses)                              48,153            (10,030)             38,767              23,586
                                                 --------------     ----------------     ---------------     -------------
         Total revenues                              480,988            394,532             923,482             896,708
         Total benefits and expenses                 370,574            348,648             757,148             767,495
         Income tax expenses                          33,345             13,830              49,383              42,366
                                                 --------------     ----------------     ---------------     -------------
         Net income                           $       77,069     $       32,054      $      116,951      $       86,847
                                                 ==============     ================     ===============     =============
</TABLE>

8.       COMMITMENTS AND CONTINGENCIES

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

         During 2002, the Company entered into a corporate facility agreement in
         the amount of $50,000 for general corporate purposes. The agreement was
         extended by an amended agreement on May 26, 2005 and matures on May 26,
         2010. Interest accrues at a rate dependent on various conditions and
         terms of borrowings. The agreement requires the Company to maintain a
         minimum adjusted net worth of $900,000 plus 50% of the statutory net
         income (if positive) for each quarter ending after March 31, 2005. The
         Company has not drawn upon the credit facility at June 30, 2005 or
         December 31, 2004.

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

         GENERAL

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

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

<TABLE>
<CAPTION>

                Results of Operations                Three Months Ended June 30,            Six Months Ended June 30,
                                                 ------------------------------------    ---------------------------------
                    (In millions)                     2005                2004               2005               2004
         ------------------------------------    ---------------    -----------------    --------------    ---------------
<S>                                           <C>                <C>                  <C>               <C>
         Premium income                       $        228       $         201        $        550      $        278
         Fee income                                    237                 231                 475               441
         Net investment income                         292                 238                 549               520
         Realized investment
          gains (losses)                                69                 (11)                 60                29
                                                 ---------------    -----------------    --------------    ---------------
         Total revenues                                826                 659               1,634             1,268
         Total benefits and expenses                   638                 571               1,331             1,029
         Income tax expenses                            60                  28                  94                79
                                                 ---------------    -----------------    --------------    ---------------
         Net income                           $        128       $          60        $        209      $        160
                                                 ===============    =================    ==============    ===============

         Deposits for investment-
          type contracts (1)                  $         90       $         174        $        791      $        344
         Deposits to separate
          accounts                                     521                 456               1,082               992
         Self-funded premium
          equivalents                                1,156               1,158               2,307             2,325
</TABLE>

         (1) Includes $22 and $0 during the three months ended June 30, 2005 and
         2004, respectively, and $334 and $0 during the six months ended June
         30, 2005 and 2004, respectively, of the Company's guaranteed interest
         annuity contracts purchased by affiliated funds or other separate
         account investment options as discussed in Note 3 to the accompanying
         consolidated financial statements.

<TABLE>
<CAPTION>

                                Balance Sheet
                                (In millions)                               June 30, 2005           December 31, 2004
         -------------------------------------------------------------    -------------------    -------------------------
<S>                                                                    <C>                    <C>
         Investment assets                                             $         20,966       $            19,653
         Separate account assets                                                 13,934                    14,155
         Total assets                                                            37,545                    37,066
         Total policy benefit liabilities                                        19,258                    18,942
         Due to Great-West Life Assurance Company                                    32                        27
         Due to GWL&A Financial Inc.                                                196                       194
         Total stockholder's equity                                               2,102                     2,044
</TABLE>

         CONSOLIDATED RESULTS

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

         The Company's consolidated net income increased by $68 million to $128
         million or 113% during the second quarter of 2005 when compared to the
         same period in 2004. The increase in net income reflects a $45 million
         increase in the Financial Services segment and a $23 million increase
         in the Great-West Healthcare segment.

         Total revenues increased by $167 million or 25% to $826 million during
         the second quarter of 2005 when compared to the same period in 2004.
         The increase is largely the result of higher net investment income and
         net realized gains on the sale of investments, primarily in the
         Financial Services segment, which is discussed further below.

         Benefits and expenses increased by $67 million during the three months
         ended June 30, 2005 when compared to the same period of 2004. Benefits
         and expenses increased by $45 million in the Healthcare segment
         primarily associated with lower contractual cession percentages on the
         Allianz Risk Transfer (Bermuda) Limited ("Allianz") reinsurance
         contract during 2005 when compared to 2004. Operating expenses,
         including commission expenses and premium taxes, were $246 million
         during each of the two quarterly periods ended June 30, 2005 and 2004.
         Income tax expense increased by $32 million, primarily as a result of
         higher net income during the quarter ended June 30, 2005 when compared
         to the same period of 2004.

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

         Deposits for investment-type contracts decreased by $84 million due to
         a decrease in transfers by participants from unaffiliated retail
         investment options to GWLA investment options (general and separate
         accounts) for which the Company provides plan and participant
         recordkeeping services.

         Self-funded premium equivalents decreased minimally from $1,158 million
         to $1,156 million during the three month periods ended June 30, 2005
         and 2004, respectively.

         Six months ended June 30, 2005 compared with the six months ended June
         30, 2004

         The Company's consolidated net income increased by $49 million or 30%
         during the first six months of 2005 when compared to the same period in
         2004. The net income increase reflects a $30 million increase in the
         Financial Services segment and a $19 million increase in the Great-West
         Healthcare segment.

         Total revenues increased by $367 million or 29% during the first six
         months of 2005 when compared to the same period in 2004. The increase
         is primarily the result of the February 2004, CLAC recapture of certain
         group life and health business from the Company associated with the
         original Indemnity Reinsurance Agreement, as discussed in Note 3 to the
         accompanying consolidated financial statements. During the first
         quarter of 2004, the Company recorded an income statement impact of
         $256 million of negative premium income and change in reserves
         associated with these recaptured policies. Net realized gains on the
         sale of investments increased by $31 million primarily due to the
         realized gains on the sale of equity investments. Fee income increased
         by $34 million during the six month period ended June 30, 2005,
         primarily in the Healthcare segment, when compared to the same period
         of 2004.

         Benefits and expenses increased by $303 million or 29% during the first
         six months of 2005 when compared to the first six months in 2004. The
         increase in benefits and expenses is primarily due to the
         aforementioned decrease in the amount of $256 million during 2004. In
         addition, the decrease in the percentage from 75% in 2004 to 40% in
         2005 of the ceding of certain group health stop-loss and excess loss
         business to Allianz contributed to the increase in benefit expenses.
         Operating expenses, including commission expense and premium taxes
         decreased slightly by $15 million or 3% to $485 million during the six
         months ended June 30, 2005.

         Deposits for investment-type contracts increased by $447 million or
         130% during the six months ended June 30, 2005 when compared to the
         same period in 2004. This increase is primarily caused by a $334
         million general account purchase by affiliated funds or other separate
         account investment options, as discussed in the Financial Services
         segment results below.

         Deposits for separate accounts increased by $90 million or 9% during
         the six months ended June 30, 2005 when compared to the same period in
         2004. The increase is due primarily to an increase in sales in the
         Great-West Retirement Services block of business.

         Self-funded premium equivalents decreased slightly by $18 million or
         less than 1% to $2.307 million during the six months ended June 30,
         2005 when compared to the same period in 2004.

         SEGMENT RESULTS

         Great-West Healthcare Segment

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

<TABLE>
<CAPTION>

                  Operating Summary                  Three Months Ended June 30,            Six Months Ended June 30,
                                                 ------------------------------------    ---------------------------------
                    (In millions)                     2005                2004               2005               2004
         ------------------------------------    ---------------    -----------------    --------------    ---------------
<S>                                           <C>                <C>                  <C>               <C>
         Premium income                       $        144       $          92        $        331      $         32
         Fee income                                    163                 164                 329               308
         Net investment income                          17                   9                  30                26
         Net realized investment
            gains (losses)                              21                  (1)                 21                 5
                                                 ---------------    -----------------    --------------    ---------------
         Total revenues                                345                 264                 711               371
         Total benefits and expenses                   267                 222                 574               261
         Income tax expenses                            27                  14                  45                37
                                                 ---------------    -----------------    --------------    ---------------
         Net income                           $         51       $          28        $         92      $         73
                                                 ===============    =================    ==============    ===============
         Self-funded premium
          equivalents                         $      1,156       $       1,158        $      2,307      $      2,325
</TABLE>

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

         Net income for the Great-West Healthcare segment increased by $23
         million or 82% for the three months ended June 30, 2005 when compared
         to the same period of 2004. This increase is primarily due to increased
         realized gains on sales of equity investments and the result of
         favorable loss ratios created by the reduction in first year business
         and the related strain that business incurs.

         Premium revenue increased by $52 million during the three months ended
         June 30, 2005 when compared to the same period of 2004. The increase
         related primarily to a decrease in reinsurance cession with Allianz in
         the amount of $50 million compared to $84 million in the same period in
         2004. The decrease is based upon lower contractual percentages during
         2005. Premium revenue was also impacted by favorable renewal pricing.

         Fee income during the quarter ended June 30, 2005 was relatively flat
         when compared to the same period of 2004. Fee income was impacted by
         increased revenue earned under the Company's pharmacy benefits
         management contract, offset by the impact of lower membership. Revenue
         earned under the pharmacy benefits contract increased by $7 million to
         $29 million during the three months ended June 30, 2005 when compared
         to the same period of 2004.

         The Great-West Healthcare segment experienced a 1% decrease in total
         health care membership from 1.914 million members at March 31, 2005, to
         1.892 million members at June 30, 2005. The decrease in membership has
         been impacted by a combination of higher contract terminations and
         lower sales of new business.

         Total benefits and expenses increased by $45 million during the three
         months ended June 30, 2005 compared to the same period of 2004. The
         increase is primarily associated with the decreased reinsurance cession
         to Allianz mentioned above in the amount of $50 million in 2005
         compared to $84 million in the same period in 2004 based on lower
         contractual cession percentages in 2005. The remaining increase is the
         result of higher health claims related to specific stop loss coverage.

         Self-funded premium equivalents were relatively flat for the three
         months ended June 30, 2005 when compared to the same period of 2004.

         Six months ended June 30, 2005 compared with the six months ended June
         30, 2004

         Net income for the Great-West Healthcare segment increased by $19
         million or 26% for the six months ended June 30, 2005 when compared to
         the same period of 2004. This increase is primarily due to higher
         realized gains on sales of equity investments during the period.
         Earnings were also impacted by an increase in pharmacy benefits
         management revenue and lower aggregate loss ratios, which offset higher
         specific loss ratios and the impact of lower membership.

         Premium revenue increased by $299 million during the six months ended
         June 30, 2005 when compared to the same period of 2004. The increase is
         attributable to the inclusion of negative premium in the amount of $207
         million in 2004 as a result of the February 2004 recapture discussed in
         Note 3 in the accompanying consolidated financial statements, comprised
         of $256 million of negative premiums offset by $49 million of normal
         CLAC reinsurance activity recorded before the recapture. In addition,
         stop loss business ceded to Allianz during 2005 was $96 million
         compared to $158 million in 2004 based on lower contractual cession
         percentages in 2005. The remaining increase is the result of improved
         renewal pricing.

         Fee income during the six months ended June 30, 2005 increased by $21
         million when compared to the same period of 2004. The increase is
         primarily due to the increased pharmacy benefits management contract
         revenue and improved renewal pricing, partially offset by the impact of
         lower membership. Revenue earned under the pharmacy benefits contract
         increased by $16 million to $55 million during the six months ended
         June 30, 2005 when compared to the same period of 2004.

         The Great-West Healthcare segment experienced a 6% decrease in total
         health care membership from 2.021 million members at December 31, 2004,
         to 1.892 million members at June 30, 2005. There was a 1% decrease in
         total health care membership from 1.914 million at June 30, 2004 to
         1.892 million at June 30, 2005. These declines are due to higher
         contract terminations and lower sales of new business.

         Total benefits and expenses increased by $313 million for the six
         months ended June 30, 2005 when compared to the same period of 2004.
         The increase is primarily due to a reduction in net Canada Life
         benefits of $250 million associated with the February 2004 recapture
         discussed above, comprised of $256 million of negative change in
         reserves offset by $6 million of normal CLAC reinsurance activity
         recorded before the recapture. Additionally, stop loss business ceded
         to Allianz during 2005 was $96 million compared to $158 million in 2004
         based on lower contractual cession percentages in 2005. The remaining
         increase is the result of higher health claims related to specific stop
         loss coverage.

         Self-funded premium equivalents decreased by $18 million, or 1% for the
         six month period ended June 30, 2005 when compared to the same periods
         of 2004. This decrease is due to decreased membership.

         Financial Services Segment

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

<TABLE>
<CAPTION>

                  Operating Summary                   Three Months Ended June 30,            Six Months Ended June 30,
                                                  ------------------------------------    ---------------------------------
                    (In millions)                      2005                2004               2005               2004
         -------------------------------------    ---------------    -----------------    --------------    ---------------
<S>                                            <C>                <C>                  <C>               <C>
         Premium income                        $         84       $         109        $        219      $        246
         Fee income                                      74                  67                 146               133
         Net investment income                          275                 229                 519               494
         Net realized investment
            gains (losses)                               48                 (10)                 39                24
                                                  ---------------    -----------------    --------------    ---------------
         Total revenues                                 481                 395                 923               897
         Total benefits and expenses                    371                 349                 757               768
         Income tax expenses                             33                  14                  49                42
                                                  ---------------    -----------------    --------------    ---------------
         Net income                            $         77       $          32        $        117      $         87
                                                  ===============    =================    ==============    ===============

         Deposits for investment
            type contracts                     $         90       $         174        $        791      $        344
          Deposits to separate
            accounts                                    521                 456               1,082               992

</TABLE>

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

         Net income for the Financial Services segment increased by $45 million
         or 141% during the three months ended June 30, 2005 when compared to
         the same period of 2004. Net income increased by $18 million as a
         result of marking to market the embedded derivative associated with the
         CLAC funds withheld reinsurance agreement when compared to the same
         period of 2004. Net realized investment gains have increased
         significantly in 2005 due to a large realized gain on the sale of
         equity investments during 2005. In addition, net income derived from
         the 2003 acquisition of Canada Life has improved from 2004 due to
         expense synergies generated from the consolidation of operations and
         the reduction of new business strain from curtailing sales activity,
         which was achieved during 2003 and 2004.

         Total premiums and deposits to investment-type contracts and deposits
         to separate accounts decreased by $44 million or 6% for the quarter
         ended June 30, 2005 when compared to the same period of 2004 due to a
         decrease in transfers by participants from unaffiliated retail
         investment options to GWLA investment options (general and separate
         accounts) for which the Company provides plan and participant
         recordkeeping services. Higher premiums and deposits for Retirement
         Services during the three months ended June 30, 2004 also contributed
         to the decrease.

         Retirement participant accounts, including third-party administration
         and institutional accounts, increased by 2% in the second quarter 2005,
         from 2.622 million at March 31, 2005 to 2.672 million at June 30, 2005.

         Fee income increased by $7 million or 10%, for the quarter ended June
         30, 2005 when compared to the same period of 2004. Retirement products
         variable asset-based fees fluctuate with changes in participant account
         values. Account values change due to cash flow and unrealized market
         gains and losses associated with fluctuations in equity markets.
         Net investment income and net realized gains and losses on the sales of
         investments increased by $104 million or 47% during the quarter ended
         June 30, 2005 when compared to the same period of 2004. The increase is
         primarily due to a large gain on the sale of equities in 2005 as well
         as an increase in investment income related to marking to market the
         embedded derivative mentioned above.

         Total benefits and expenses increased by $22 million or 6% during the
         second quarter of 2005 when compared to the same period of 2004. During
         the second quarter of 2004, there was a significant decrease in the
         deferred ceding commission amortization, which created this
         fluctuation.

         Six months ended June 30, 2005 compared with the six months ended June
         30, 2004

         Net income for the Financial Services segment increased by $30 million
         or 34% during the six months ended June 30, 2005 when compared to the
         same period of 2004. The increase in net income was primarily
         attributed to a combination of positive results from the Individual
         Markets line of business, a large gain from the sale of equities and an
         increase of $8 million as a result of marking to market the embedded
         derivative associated with the CLAC funds withheld reinsurance
         agreement when compared to the same period of 2004.

         Total premiums and deposits to investment-type contracts and deposits
         to separate accounts, increased by $510 million or 32% during the
         six-month period ended June 30, 2005 when compared to the same period
         of 2004. The increase is primarily within the Retirement Services
         business area. As discussed in Note 3 in the accompanying consolidated
         financial statements, the Company's separate accounts offer mutual
         funds or other investment options that, beginning in 2005, purchased
         guaranteed interest annuity contracts issued by the Company in the
         amount of $334 million, which is included in deposits for
         investment-type contracts.

         Retirement participant accounts, including third-party administration
         and institutional accounts, increased by 7% in 2005, from 2.498 million
         at December 31, 2004 to 2.672 million at June 30, 2005.

         Fee income has increased by $13 million or 10% for the first six months
         of 2005 when compared to the same period of 2004. Retirement products
         variable asset-based fees fluctuate with changes in participant account
         values. Account values change due to cash flow and unrealized market
         gains and losses associated with fluctuations in equity markets.

         Net investment income and net realized gains and losses from the sale
         of investments increased by $40 million or 8% during the six-month
         period ended June 30, 2005 compared to the same period of 2004. The
         increase is primarily due to a large gain on the sale of equity
         investments in 2005.

         Total benefits and expenses decreased by $11 million or 1% in the first
         six months of 2005 when compared to the same period of 2004.

         GENERAL ACCOUNT INVESTMENTS

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

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

         Fixed Maturities

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

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

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

<TABLE>
<CAPTION>


         Rating                                               June 30, 2005             December 31, 2004
         ------                                            ---------------------     ------------------------
<S>                                                                 <C>                       <C>
         AAA                                                        58.5    %                 56.9      %
         AA                                                          7.5    %                  8.2      %
         A                                                          15.1    %                 15.6      %
         BBB                                                        16.5    %                 16.7      %
         BB and below (non-investment grade)                         2.4    %                  2.6      %
                                                           ---------------------     ------------------------
         TOTAL                                                     100.0    %               100.0       %
                                                           =====================     ========================
</TABLE>

         During the six months ended June 30, 2005, net unrealized gains on
         fixed maturities included in the other comprehensive section of
         stockholder's equity, which is net of policyholder-related amounts and
         deferred income taxes, increased stockholder's equity by $8 million.

         Impairment of Securities

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

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

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

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

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

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

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

         During the three months ended June 30, 2005 and 2004, the Company
         recorded other-than-temporary impairments in the fair value of its
         fixed maturity investments of $0.240 million and $0, respectively.
         During the six months ended June 30, 2005 and 2004, the Company
         recorded other-than-temporary impairments in the fair value of its
         fixed maturity investments of $4.432 million and $3.162 million,
         respectively. No impairments were recorded on equity securities for any
         of the three or six-month periods ended June 30, 2005 or 2004.

         CRITICAL ACCOUNTING POLICIES

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

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

         Policy Reserves

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

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

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

         Allowance For Credit Losses

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

         Deferred Policy Acquisition Costs

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

         Valuation Of Privately Placed Fixed Maturities

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

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

         NEW ACCOUNTING PRONOUNCEMENTS

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

         LIQUIDITY AND CAPITAL RESOURCES

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

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

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

         Generally, the Company has met its operating requirements by
         maintaining appropriate levels of liquidity in its investment portfolio
         and utilizing cash flows from operations. Liquidity for the Company has
         remained strong, as evidenced by significant amounts of short-term
         investments and cash that totaled $1,026.2 million and $819.3 million
         as of June 30, 2005 and December 31, 2004, respectively. In addition,
         as of both June 30, 2005 and December 31, 2004, 97% of the Company's
         bond portfolio carried an investment grade rating, thereby providing
         significant liquidity to its overall investment portfolio.

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

         The Company's financial strength provides the capacity and flexibility
         to enable it to raise funds in the capital markets through the issuance
         of commercial paper. The Company continues to be well capitalized, with
         sufficient borrowing capacity to meet the anticipated needs of its
         business. The Company had $78.6 million and $95.0 million of commercial
         paper outstanding at June 30, 2005 and December 31, 2004, respectively.
         The commercial paper has been given a rating of A-1+ by Standard &
         Poor's Ratings Services and a rating of P-1 by Moody's Investors
         Service, each being the highest rating available.

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

         OFF-BALANCE SHEET ARRANGEMENTS AND CONTRACTUAL OBLIGATIONS

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

ITEM 3.  QUANTITATIVE AND QUALITIVE DISCLOSURES ABOUT MARKET RISK

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

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

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

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

         As a result of the coinsurance with funds withheld element of the
         Company's reinsurance of business of CLAC's US branch, it has recorded
         a derivative financial instrument to account for the different credit
         risks and other characteristics of the reinsurance receivable and the
         investment assets of CLAC that underlie that receivable. This
         derivative is carried at fair value and changes in fair value are
         included in net investment income as a non-cash charge or credit.
         Therefore, the Company's operating results are exposed to volatility,
         reflecting changes in the fair value of the underlying investment
         portfolio, which is exposed to interest rate, market and credit risk.
         As a result of this derivative, gains in the amount of $8.5 million and
         $1.3 million net of tax were included in net income for the three and
         six-month periods ended June 30, 2005, respectively.

ITEM 4.  CONTROLS AND PROCEDURES

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

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

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

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

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

         On June 1, 2005, the Company held an annual meeting of its shareholders
         at which all of the directors as reported in the Company's annual
         report on Form 10-K for the period ended December 31, 2004, were
         unanimously re-elected.

ITEM 6. EXHIBITS

         Index to Exhibits

<TABLE>
<CAPTION>

                 Exhibit Number           Title                                                                Page
                 ---------------------    ----------------------------------------------------------------     ---------
<S>                    <C>                <C>                                                                   <C>
                       31.1               Rule 13a-14(a)/15d-14(a) Certification                                 26
                       31.2               Rule 13a-14(a)/15d-14(a) Certification                                 27
                       32                 18 U.S.C. 1350 Certification                                           28

SIGNATURE

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

         GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

     By:     /s/Glen R. Derback                                                     Date:     August 15, 2005
             ----------------------------------------------------------------------           ---------------------------
             Glen R. Derback, Senior Vice President and Controller
             (Duly authorized officer and chief accounting officer)


</TABLE>